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Analysis

Master Data Management Projects in Practice
Dave Waddington By: Dr Dave Waddington, Senior VP and Head of Research, The Information Difference
Published: 22nd December 2009
Copyright The Information Difference © 2009
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Master Data Management (MDM) has received growing attention recently as an essential component of information management alongside data governance and data quality. Alongside this growth in interest in master data management, the provision of services for the implementation of master data management is featuring with increasing prominence in the portfolio of services offered by many Systems Integrators (SIs).

While many SIs currently claim or suggest they have extensive implementation expertise in master data management, there is little concrete information available regarding the use of systems integrators by end-user organizations for implementing master data management programs in business. We have therefore conducted a survey of both end-user organizations and systems integrators aimed at gaining deeper insight into the levels of expertise, experience and usage of systems integrators specifically related to undertaking MDM implementations.

Some 131 respondents completed the survey from all around the world, the majority from North America (47%) and Europe (30%). A high proportion (42%) of the respondents came from companies having annual revenues greater than US $ 1 billion. The respondents represented a wide spectrum of industries.

The key findings from the survey are summarized below:

  • Those organizations that have undertaken implementations indicated that they manage a median of 3 million master data records (the maximum reported was 990 million), have taken 6 months to implement and involved an 8-person project team. The membership of the team was 25% business, 40% own IT and 35% SI staff.
  • “Customer” and “Product” still remain the main data domains for MDM implementations, although the wide spread of domains reported indicate that end-user organizations are extending the range and focus of their master data management.
  • Despite the claims of the SIs in terms of their ability to implement MDM, most have not undertaken very many projects—the median they reported for all projects was nine with the median value for 2009 being five.
  • Around one-third of end-user organizations have undertaken more than two MDM implementations, which suggests that MDM is now coming of age and moving beyond the pilot stage.
  • Those who had already implemented reported a median maintenance cost as 20% of the initial project costs.
  • Data quality is a key component of any MDM implementation and the time and effort (cost) required to achieve data of acceptable quality is frequently severely underestimated. The median reported was 30% of the overall initial project costs.
  • The median costs of software expressed as a percentage of the initial project costs was 25%; in other words, a company spending $X on an MDM software license can expect to spend 4X in total.
  • There was a broad preference for traditional proprietary MDM, data quality and data integration solutions. However, there appeared to be a clear willingness to explore further open source options alongside a significant group (18%) already deploying open source solutions in business critical areas.
  • 60% of those who have already implemented had prepared a business case for their MDM project; of those planning to implement MDM, two-thirds planned to produce a business case for this. This means that at least a third of MDM projects have no business case.
  • Both those already implementing (80%) and those planning to implement recognise the pivotal importance of establishing data governance.
  • 40% of those already implementing MDM did a post implementation review (PIR) and a further 40% intend to do so upon completion.
  • SIs and end-user organizations alike identify poor data quality as a key roadblock implementing MDM initiatives.
  • Among the main recommendations from the respondents for successful delivery of MDM implementations were: (a) A successful MDM project is a business-driven project, (b) Up-front planning, and (c) Do not use a waterfall methodology.
  • About one-fifth of end-user organisations have opted for “custom build”.
  • Most organisations chose competitive tender as the route to selecting an SI partner.
  • Most organisations (57%) that had implemented MDM as well as those planning implementations chose to use their own methodologies.
  • 67% were at least satisfied with the performance of their chosen SI against 33% who were unhappy. 59% considered that their SI had “adequate” expertise and experience with MDM while 41% felt them to be “not very experienced”. Given that SIs are supposed to be providing expertise in the subject, this is somewhat disappointing.
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