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Analysis

Styles and architectures for Master Data Management
Dave Waddington By: Dr Dave Waddington, Senior VP and Head of Research, The Information Difference
Published: 9th April 2009
Copyright The Information Difference © 2009
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Master data management (MDM) has emerged as a key area of information management in the last few years. Initially much of the architectural debate was about whether to be data domain-specific or not, with vendors focused on providing customer or product-specific hubs. In the past couple of years the industry has realised that organisations want a uniform approach to all their master data and vendors have started to address this requirement. There is, however, still a significant divide about the style of implementation, with some vendors specialising in certain areas, and some confusion has arisen around terms such as "operational MDM", "registry" and "analytic MDM" used for various approaches to implementing MDM. Implementation approaches focus either on managing master data associated with business intelligence and reporting (termed analytic MDM) or managing master data associated with transactional systems (termed operational MDM). There has also been discussion of the use of federated approaches for MDM.

At The Information Difference we believe it is important for both organizations and vendors to understand how MDM is generally being implemented, so as to gain insight into the underlying reasons for the approaches selected and the available experience to date. We have therefore conducted a survey (sponsored by Microsoft™) aimed at gaining deeper insight into the views and plans of businesses regarding their current or planned MDM initiatives, focused on the styles and architectures adopted or planned to be implemented.

Some 188 respondents completed the survey from all around the world, the majority from North America (59%) and Europe (20%). Most of the respondents were from companies having annual revenues greater than US $ 1 billion and represented a wide spectrum of industries. The responses were split between two groups—those that had already adopted MDM and those planning to do so.

The key findings from the survey are summarized below:

  • Fully one third of organizations have already adopted MDM and a further 32% plan to do so within three years.
  • There is a high diversity of data domain types in the two groups with an average of five data types being/planned to be managed by MDM. These mostly include, but are not limited to, Product and Customer. Less than 15% in both groups were focused on a single data type.
  • Around two-thirds of organizations had implemented (or planned to implement) using a single hub/database for MDM. Surprisingly a significant portion (20% for those already having MDM and 25% of those planning to implement) had opted for a federated MDM architecture—mostly following their organizational structure (line of business/business unit) rather than geography.
  • Encouragingly, two thirds reported that their current or planned scope was enterprise-wide.
  • Of those who had already adopted MDM, 23% had adopted analytic MDM, 37% operational MDM and a further 33% both. A similar trend was found for those planning to implement MDM. Over half had implemented analytic MDM, based on the need to improve their management reporting.
  • Reported success rates were high and respondents generally considered their implementations "somewhat successful" (60% for analytic MDM and 63% for operational MDM). Significantly around a quarter of respondents told us their implementations had been "very successful" (26% for analytic MDM and 31% for operational MDM). Less than 6% reported that their implementations had had little or no effect.
  • For around a third of organizations the size of the MDM hub was between 1 and 2 million records. Overall sizes reported ranged from 20,000 to 25 million records.
  • The majority of those already having MDM implementations had elected to use the co-existence model (28%) closely followed by the Consolidation (see page 6 for definition) model (22%). Surprisingly, as many as 17% had chosen the potentially more challenging Transaction model. Among those planning to implement there was no clear preferred option.
  • The average cost of implementation was about US $ 7 million with a median of US $ 3.5 million. The corresponding figures for annual maintenance of the MDM systems were a mean of 8 FTEs (Full Time Equivalents) with median value of 4.5 FTEs.
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