milestones on the cdi-mdm road map for 2008-09€¦ · one-day public & onsite workshop ......

Aaron ZornesFounder & Chief Research Officer

The CDI-MDM Institutewww.The-CDI-MDM-Institute.com a.k.a. www.tcdii.com

"Milestones on the CDI-MDM Road Map

for 2008-09"

© 2007 The CDI-MDM Institute The-CDI-MDM-Institute.com

About the CDI-MDM Institute

Founded in 2004

Focused on CDI-MDM business drivers & technology challenges

MDM Advisory Council™of fifty G5000 IT organizations with unlimited advice to key individuals, e.g. CTOs, CIOs, data architects

MDM Business Council™ website access & email support to 4,500+ members

MDM Road Map & Milestones™semi-annual strategic planning assumptions

MDM Alert™ bi-weekly newsletter

MDM Market Pulse™ monthly surveys

Budgets, success/failure rates, mindshare of 250+ major in-flight CDI-MDM projectsExamples: evaluation process for CDI SIs, CDI ROI in Telco M&A, …

MDM Fast Track™One-day public & onsite workshop

Fee-based & rotating quarterly through major North American, European, & Asia-Pacific metro areas

MDM SUMMIT™ conferences

“Independent, Authoritative, & Relevant”

About Aaron ZornesMost quoted industry analyst authority on topics of CDI & MDM

Founder & Chief Research Officer of the CDI-MDM InstituteConference chairman for DM Review’s CDI-MDM SUMMIT conference series

Founded & ran META Group’s largest research practice for 14 years M.S. in Management Information Systems from University of Arizona


CDI-MDM Institute Advisory Council

Advisor agrees to provide Institute’s consultants with advice & insight regarding the use of MDM software & related business processes at Advisor’s convenience Advisor agrees to participate in at least one fifteen (15) minute survey teleconference call every sixty (60) days Optionally, Advisor may respond to the bi-monthly survey request via email or Internet-based survey fulfillment Results of such MDM market research surveys shall be aggregated by the Institute & made available to all Advisory Council members In no case, shall any Advisor-specific survey information be made available to other parties unless Advisor has specifically agreed to the release of such information in writingFifty organisations who receive unlimited MDM advice to key

individuals, e.g. CTOs, CIOs, & MDM project leads

Representative Members

• 3M• Bell Canada• Caterpillar• Cisco Systems• Citizens Communications• COUNTRY Financials• Educational Testing Services• GE Healthcare• Honeywell• Information Handling Services• Intuit• MCI• McKesson• Medtronic• Microsoft• Motorola• National Australia Bank• Nationwide Insurance• Novartis• Qwest• Roche Labs • Rogers Communications• Scholastic• SunTrust• Westpac• Weyerhaeuser• Woolworths


“The World Is Flat”

Data structures & business processes must be supremely flexible

Underlying IT infrastructure must enable new business models

Policies/process flows must integrate in ways previously problematic

EAI = enterprise application integrationETL = extract-transform-loadMDM = master data managementSOA = service-oriented architecture

Value of Integration Exceeds Value of Build/Buy

Valu

e

Time

Value ofIntegrating Applications

Value ofBuilding

Applications

ETL EAI MDM

MonolithicApps

Client/ServerApps

SOA/Web Services

Global competition mandates a wide variety of new business styles


Business Drivers 2008-09

Just-in-time 21st century business models mandate both agility & integration across enterprise to

Provide higher profitabilityReduce operations costs Increase accuracy of regulatory compliance

Emergence of “demand chains”mandates synergetic approach across both “party” & “product”master systems via common business servicesM&A as a business strategy

Agile Enterprise

Contemporary business strategies mandate flexible infrastructure –propelling MDM into “Top 10” initiative

Self-DirectedService

M&A“Ready”

RapidNPI

Integrated Risk

Mgmt

Co-opetition

“Demand”Chains


Technical Challenges 2008-09

High RAS (reliability, availability, scalability) infrastructure Flexibility in mash-up of extreme data velocity & varietyInline analytical MDM processes supporting operational MDM Party:product conundrumLack of standards – BPM, rules engines, metadataAdherence to evolving security & privacy requirementsLifecycle approach to data assets

Market is in flux with no dominant vendor or architecture; requirements vary by industry, scale & business complexity

Historical MDM Solutions

Synchronization

Enterprise Application Integration(EAI)

ExtractTransform

Load (ETL)

Replication

Aggregation

MasterCustomer

Files/DBs

MDM


Working Definitions

Data Governance (DG) Data Governance (DG)

Customer Data Integration (CDI)

Customer Data Integration (CDI)

Processes & technologies for recognizing a customer & its relationships at any touch-

point while aggregating, managing & harmonizing

accurate, up-to-date knowledge about that

customer to deliver it ‘just in time’ in an actionable form to

touch-points.

Formal orchestration of people, process, & technology to enable an organization to leverage data as an enterprise asset.

Master Data Management (MDM)

Master Data Management (MDM)

The authoritative, reliable foundation for data used

across many applications & constituencies with the goal

to provide a single view of the truth no matter where it lies.

CDI is mandatory first step for most organisationson journey to MDM


Working Sub-Definitions

For most G5000 enterprises, multiple (often all) variants will be needed to make MDM initiatives successful

Analytical MDM Analytical MDM Definition, creation, & analysis of

master data; examples: counterparty risk mgmt apps &

financial reporting consolidation

Collaborative MDM Collaborative MDM Definition, creation, &

synchronization of master reference data via workflow & check-in / check-out services;

examples: PIM data hubs & AML

Operational MDM Operational MDM

Definition, creation, & synchronization of master data

required for transactional systems & delivered via SOA; examples: near R/T customer

hubs & securities masters


‘Top 5’ Justifications for MDM Initiatives

1. Catalyzes market leadership & dominance

2. Provides increased ROI by “leveraging / rationalizing existing infrastructure”

3. Significantly increases shareholder value

4. Provides a disruptive technology for new business models

5. Enables compliance & regulatory reporting


MDM Milestones

Market maturation

Market momentum

Market consolidation

Budgets/skills

Data governance

MDM convergence

Architecture & data models

Identity resolution

Master data delivery

Analytics

Policy hubs

Enterprise search

Strategic planning assumptions to assist IT organisations & vendors in coping with flux & churn of emerging MDM vendor landscape


Market MaturationStrategic Planning Assumption

During 2008, the MDM market will continue to shift gears from “early adopter” to “mainstream” as 95%+ of financial services, communications services, high tech, & pharma/life sciences enterprises actively plan to replace homegrown MDM solutionsThrough 2009-2010, verticalization/horizontalizationof MDM solutions will expand beyond corporate financial reporting, EMPI healthcare, etc. into financial services & government especiallyBy 2012, the market for enterprise MDM solutions (software & services) as both strategic initiatives & to refresh aging legacy MDM capabilities will exceed US$3B

MDM MILESTONE


Market MomentumStrategic Planning Assumption

During 2008, MDM solutions such as IBM, ORCL, SAP, & TDC will monopolize majority market share in the G5000 enterprise; while mid-market solutions will arrive from MSFT, Nimaya, & ORCL plus Data Quality vendors (Pitney Bowes/G1, SAS/DataFlux, Trillium)

Through 2009-2010, both mega & best-of-breed MDM vendors will aggrandize the traditional master customer DB business of Data Service Providers (e.g., ACXM, DNB, & Experian) as these vendors sprint to deliver on-premise CDI hub solutionsBy 2012, every major application & database vendor will provide either native or OEMed MDM capability –including DOX, MSFT, & CRM

MDM MILESTONE


MDM Momentum

October 2005 – IDC’s W/W Market Forecast stated MDM market to grow to US$10.4 billion by 2009

March 2006 –CDI-MDM SUMMIT 2006 launched largest expo dedicated to CDI, MDM, & DG **sold out**

June 2007 – Gartner recognized importance of CDI with its third Magic Quadrant™ for CDI Hubs

October 2006 – Forrester releases second Wave™ report on CDI

March 2007 – Seventh CDI-MDM SUMMIT **sold out**

MDM is critical to proactively & consistently manage customer data to untangle quagmire of complex systems – e.g.,

streamline processes, enhance QoS, & govern compliance

It’s All About “Relationships”

PanoramicCustomer

ViewCustomer-CentricView

Universal Customer

View

CDI

360 ºCustomer

View

Master CustomerInfo File

CustomerSystem

of Record


Market Consolidation & DiversificationStrategic Planning Assumption

During 2008, mega IT vendors (IBM, ORCL, SAP) will continue M&A-driven R&D gyrations in moving to an enterprise MDM-centric portfolio with ORCL & SAP challenged additionally in moving from silo’ed application architectures into SOA-based architectures By 2009-10, IBM (ASCL/CRSW/DMC/DWL/LAS/Princeton Softech/SRD/Trigo/Unicorn) & ORCL (HYSL/iFlex/JDE/PSFT/RETK/SEBL/ Sunposis) will begin to overcome most architectural/ BPM/metadata/platform issues that confounded SAP earlier (SAP MDM/A2i/BOBJ/Callixa)

Through 2009-10, mega IT vendors (IBM, ORCL, SAP, & TDC)will dominate MDM market with niche/best-of-breed vendors (DNB/Purisma, i2, Initiate Systems, Kalido, Siperian) thriving in specific industries & horizontal/corporate applications

MDM MILESTONE


CDI-MDM Genealogy

Pre-2001 2002 2003 2004 20062005

1st gen CDI solutions

arrive (IBM CIIS, Hogan CIF) Nascent EII

vendors arrive & flop

Data service providers (Acxiom, Experian) fail at software makeovers

into CDI2nd gen CDI vendors merge to form 3rd gen CDI solutions

(Initiate/Journee, Siperian/Delos)

Oracle, SAP, Siebel introduce

3rd gen/hybrid CDI

Mega vendors digest acquisitions;

MDM supersedes CDI as mktg term

App vendors launch EAI

infrastructure (SAP NetWeaver,

Siebel UAN)

ETL vendors add modest

CDI extension & avow CDI capabilities

Mega app vendors

roll out CDI (Oracle OCO,

SAP MDM, Siebel UCM)

CDI early adopters drive requirements

(Fin Svcs, High Tech Mfg,

Pharma, Telco)

‘EIM’ as yet

another TLA

3rd generation MDM solutions are based on service-oriented architecture (SOA) to hybridize aggregation, replication &

synchronisation to provide enterprise-wide MDM infrastructure

‘Process Hubs’trounce

‘Data Hubs’; 4th gen

‘Full Spectrum’hubs support structured & unstructured

2007+


Budgets & SkillsStrategic Planning Assumption

During 2008, typical G5000 size enterprise will budget/spend US$1M for MDM software, with an additional US$3-4M for SI services; Global Service Providers will operate under this price floor by applying highly-customized, labor intensive frameworks & related acceleratorsThroughout 2009-2010, skill shortages will greatly inflame project costs as demand for data stewards, enterprise data architects, & other individuals with strong affinity for data governance will outstrip the market for experienced individuals; concurrently, SIs will fill the void in their classic style by baiting & switching senior veterans for junior rookiesBy 2012, the market will have stabilized as enterprises react by training & protecting their own MDM staff with specific software product & project expertise

MDM MILESTONE


Career TracksStrategic Planning Assumption

Scarcity of “hands on” MDM experience existsDuring 2007, 1,500+ product-specific consultants albeit with little “real world” experience with mainstay MDM solutions were trained upCurrent shortage lends itself to same scenario 5-10 years ago with SAP’s ABAP 4GL – i.e., inflated prices & resumes with many junior SI staff spinning up to speed at client’s expense (a.k.a. “Androids”)

Market for expertise will create major demand for corporate MDM positions during next 3-5 years

Data Steward,Enterprise

Data Architect,Enterprise Data

Modeler,Ctrs of Excellence,

MDMProgrammers

Product-Neutral

Product-Specific Off-Shore

On-Site


Data GovernanceStrategic Planning Assumption

During 2008, enterprise-level data governance that includes entire master data lifecycle (creation, promotion, archiving, …) will be mandated as a core deliverable of large-scale MDM projects Through 2009-10, major systems integrators & MDM boutiques will focus on productizing their data governance frameworks while MDM software providers struggle to link governance process with process hub technologiesBy 2011-12, both corporate & LOB data stewards will be a common position as G5000 enterprises formalize this function amidst increasing de facto & de jeurerecognition of information as a corporate asset

MDM MILESTONE


Why Data Governance? Why Now?

Businesses have been governing data for 20+ years, however, only a rare few are doing it well todayMany companies historically assigned DG to a data management group whose job is to integrate & manage dataContemporary DG challenges are far greater

Break down functional stovepipes Integrate processes across the enterprise –including corporate technology, all LOBs, functional areas & geographic regionsEngage all levels of management

Based on recognition of issues at hand, an improving economy, & increasing regulatory requirements, businesses are now recognizing

the opportunity to take a more strategic view of data governance


Why Data Governance? Why Now? – cont’d

Once you know what data is worth, you need to calculate probability for risk in a business processesWhen you understand value of data & probability of risk, you can evaluate how much to spend to protect it, manage it, and invest in adequate controlsThis is basis of modern underwriting – assets, risk, controlsDoing this systemically requires a combination of organisational structures, business processes, & technology – a “data governance blueprint” for:

Data qualityInformation integrationBusiness intelligence

IT management must work with business leadership to design & refine “future state” business processes associated with data

governance commitments


Data Governance Juggernaut

Data Customer MasterWarehouse Data Integration Data Management

(Batch) (On-Line) (Just-in-Time)

Data Data GovernanceGovernance

Must BecomeMust Become““De FactoDe Facto””

Data Data GovernanceGovernanceWill BecomeWill Become

““De JureDe Jure””

Data Data GovernanceGovernanceBecomingBecoming

““De RigueurDe Rigueur””

Enterprise risk management is emerging as a major issue within most financial institutions & is VERY data-centric


Data Governance Maturity Level

Overall, FSPs are leading the way for non-FSPs

BASIC (“anarchy”) – App-centric approach; meets business needs only on project-specific basisFOUNDATIONAL (“IT monarchy”) – Policy-driven standardisation on technology & methods; common usage of tools & procedures across projectsADVANCED (“business monarchy”) – Rationalized data with data & metadata actively shared in production across sourcesDISTINCTIVE (“Federalist”) – SOA (modular components), integrated view of compliance requirements, formalized organisation with defined roles & responsibilities, clearly defined metrics, iterative learning cycle

Source: February 2006 CDI Institute survey of 50 Global 5000 IT organizations

0%

10%

20%

30%

40%

50%

Basic Foundational Advanced Distinctive

FSP

Non-FSP


MDM ConvergenceStrategic Planning Assumption

During 2008, party & product data interdependencies will quickly broaden MDM requirements – i.e., from “customer” to “product” to “vendor”; concurrently, vendor dogma will promote nouveau approaches such as collaborative MDM to assuage multi-entity conundrumThrough 2009-10, select best-of-breed vendors (DNB/Purisma, Kalido, Initiate Systems, Siperian) will provide multi-hub (entity, architecture & brand) connectivity via hierarchy management extensionsBy 2012, enterprises without an overall, long-term MDM strategy run the ironic risk of building “MDM silos”

MDM MILESTONE


PARTY:PRODUCT Conundrum

Different master entity types may require different MDM brands or architectures

Product data shared across supply chainEmployee data captive within HR appsCustomer data never leaves home (outside the firewalls)

Customer policy/ process hubs ultimately require pricing masters, product masters, supplier masters, & so on …

PricingAuthorized Products

BundlesCross-Reference

HierarchiesGeographical Variants

Regional Variants

PARTY

PRODUCT

SOA mandates “Party” + “Product” MDM – however, “customer” cannot simply be added as object to PIM products


Why “Multi-Entity MDM”? Why Now?

Future direction is to grow all reference masters into operational masters

Future MDM landscapeMultiple data domainsMultiple relationshipsMultiple usage styles –analytical, operational & collaborativeLinkage between operational data domains using collaborative or analytical MDM

Most vendors approach MDM from either specific usage/domain pairing, or broad MDM tool – e.g.,

rudimentary MDM data model & set of tools for data quality, workflow, etc. to build own MDM product

Pricing Policy HubPricing Reference Master

CDI HubLocation Master

Customer RegistryPIM Data Hub

EvolutionaryMulti-Entity MDM

Entity-SpecificMDM Data Marts

Myopic

Strategic


Architecture & Data ModelsStrategic Planning Assumption

During 2008, market will further evolve as vendors expose MDM capabilities as “always on” services in loosely-coupled architectures – transcending notions of analytical, collaborative, & operational MDMDuring 2009-10, mega vendors (IBM, ORCL, SAP, TDC) will continue to focus significant R&D & marketing resources on “industry content” of data models which will force specialist vendors to stay “data model lite” via specialization in B2B/B2B2C hierarchy mgmt & distributed MDMNot until 2011-12, will mega MDM vendors have rewired foundational software to fully support strategic application infrastructure (Oracle Fusion, SAP NetWeaver, …) & have completed transitioning from C/S to SOA; concurrently, G5000 business requirements will drive vendors into 4G full spectrum hubs that support both structured & unstructured information

MDM MILESTONE


Most Common MDM Topologies

Composite/Hybrid is majority architectural preference; Registry/Virtual 2nd choice

IMPLEMENTATION STYLE DESCRIPTION External (Service Provider) • Database marketing providers

• Data service providers • Service bureaus

Persistent (Database) • Master customer information file/database• Operational data store/active data warehouse• Relational DBMS + Extract-Transform-Load

(ETL) + Data Quality (DQ)Registry (Virtual) • Metadata layer + distributed query (enterprise

information integration or EII)• Enterprise application integration (EAI)• Portal

Composite (Hybrid) • Ability to fine-tune performance & availability by altering amount of master data persisted

• XML, web services, service-oriented architecture (SOA)

“Chernobyl” • Encapsulate legacy applications


Identity Resolution Strategic Planning Assumption

During 2008, independent DQ vendors (Address Doctor, G1, Human Inference, Trillium) will focus on name & address cleansing as they struggle to compete against better funded match/merge & data profiling capabilities increasingly integrated with mega vendor MDM solutionsDuring 2008-09 MDM capabilities for classifying, discovering & archiving party data/relationships while maintaining privacy will become major requirement; concurrently, users will be challenged to discern price/ performance/scalability & accuracy of matching algorithms By 2009-10, sophisticated hierarchy mgmt capabilities will include “global IDs” as mainstay feature for all MDM vendors to link both legacy & new hubs with Data Service Providers’ enrichment data; concurrently, support for metadata repositories to link mega vendors’ multitude of acquisitions will continue to significantly lag

MDM MILESTONE


Why Organizational Hierarchy Management ?

Based on recognition of need to Grow beyond mature North American & Western European market

Support global customer service

G5000 businesses are now recognizing opportunity to take more strategic view of “global account management”

Market demand for “customer hierarchy management” –esp. B2B – capability to augment mega vendor’s data hub strategies (IBM, ORCL, SAP) will explode during 2007-08

MDM solutions which incorporate such capabilities will be key factor in successful deployment of globally-enabled MDM solutions

3rd party hierarchy data inadequate or non-existent for certain geographies – e.g., Equifax/Austin-Tetra, D&B, …


Organizational Hierarchy Management

Key features Ability to model complex relationships – legal, organizational & cultural Ability to handle overlapping hierarchies – multi-party modelVisual hierarchy management toolIntegration with data governance processes

Short listInitiate Systems; Hyperion; IBM; Oracle-Siebel; Purisma; Siperian; Stratature

Use casesGlobal account managementRisk managementBasel II, USA PATRIOT, AML complianceM&A


Party Data QualityStrategic Planning Assumption

During 2008-09, enterprises will focus more on degree to which party data quality (consumer, subscriber, owner, member, vendor, establishment, contact, …) is sufficient to meet requirements of diffuse business entitiesBy 2009, ’quality’ metrics will increasingly be defined specific to purpose of particular business function (product development, marketing, sales, order admin, service, compliance, analytics, …) & in turn be driven by enterprise-wide data governance initiativesThrough 2010-11, wide deployment of loosely-coupled SOA architectures will catalyze consumption of highly-optimized data quality functions as made available via both mega Data Service Provider & enterprise application vendors

MDM MILESTONE


Analytics Strategic Planning Assumption

During 2008, the convergence of MDM & business intelligence (BI) will accelerate as enterprises leverage MDM concepts in a BI contextThrough 2009-10, ongoing agglomeration of Analytical MDM & Operational MDM will increasingly benefit enterprises by blending such transactional hubs with master reference data repository as well as provide greater visibility into the impact of master data quality on business performance metricsBy 2012, inline & real-time analytics derived from MDM-enabled aggregation of both transactional & historical data will have become a major source of sustainable competitive differentiation for Global 5000 enterprises

MDM MILESTONE


Policy Hubs Strategic Planning Assumption

During 2008, MDM vendors will lag their BPM counterparts in providing workflow orchestration to synchronize the trusted sources that comprise a federated master data storeThrough 2009-2010, the mega CDI-MDM vendors (IBM, ORCL, SAP) will struggle to provide BPEL-compatible workflows while specialist MDM solutions rush distributed Collaborative MDM capabilities to marketBy 2012, without such flexible workflows, organizations will merely rebuild the same master data files they evolved the past 15-20 years with their ERP & CRM infrastructures

MDM MILESTONE


Data Governance EnablesBusiness Process Mgmt -> Policy Hubs

PrivacyPrivacyPreferencesPreferences

PricingPricingBundlesBundles

CompatibilityCompatibility

LegacyLegacy

Shipping Shipping ApprovalsApprovals

EligibilityEligibility

Upgrade/Upgrade/DowngradeDowngrade

Next Best Next Best OfferOffer

DiscountDiscountPoliciesPolicies

Process /Process /Policy HubPolicy Hub

Methodology is needed to bind process steps, skills & software to produce Data Governance deliverables


Enterprise SearchStrategic Planning Assumption

Through 2008, the unique properties & behavior of master reference data will spawn a series of vertical applications & specialized features within MDM solutionsDuring 2009-10, semantically-enabled metadata will enable “search” for both structured & unstructured info across a variety of applications such as catalog management & deep web search, & enterprise searchBy 2012, enterprise semantics & SOA-enabled data services will provide the technology foundation for policy hubs; concurrently, the 4th generation of hubs will innately support Analytical, Operational, & Collaborative & MDM business services

MDM MILESTONE


Solidifying Requirements for 3rd Generation MDM Solutions

Multi-entity hub capabilities SOA/shared services architecture with evolution to “process hubs”Sophisticated hierarchy management High-performance identity managementData governance-ready framework

MASTER DATA

SEARCH

MASTER DATA

MODELING

MASTERDATA

APPLICATIONS

MDMMASTER

DATA PREPAR-

ATION

MASTERDATA

GOVERNANCE

MASTERDATA

MOVEMENT

Global 5000 enterprises’ “multi-hub” scenarios mandate architectural/infrastructure approach to MDM


Bottom Line Planning Assumptions

Acknowledge no single vendor does it all “well”Party vs. productB2B vs. B2C vs. B2B2CBatch vs. real-time

Recognize that industry expertise matters Test drive matching & consulting expertiseInvest in data governance & MDM architecture for long-term sustainability & ROI

MDM is critical to proactively & consistently manage customer data to untangle quagmire of complex systems – e.g.,

streamline processes, enhance QoS, & govern compliance


2007-08 MDM SUMMITS

November 27 – 28, 2007Madrid

February 6 – 7, 2008Toronto

February 18 – 19, 2008Frankfurt

March 29 – April 1, 2008San Francisco

April 21 – 23, 2008London

April 28 – 30, 2008 Sydney

October 19 – 21, 2008NYC


Authoritative

Relevant

Independent

Aaron ZornesFounder & Chief Research Officer

The CDI-MDM InstituteThe-CDI-MDM-Institute.com a.k.a.

www.tcdii.com

milestones on the cdi-mdm road map for 2008-09€¦ · one-day public & onsite workshop ......

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