MDM 101

In the information management space, few technologies are growing as fast as Master Data Management. While IBM’s acquisition of Initiate Systems has shed additional light on MDM, it’s hardly ubiquitous. There are plenty of people that either:

  • Don’t understand it
  • Don’t understand the need for it
  • Don’t understand its limitations

In this post, I’d like to illustrate why MDM matters, a few of its limitations, and why I believe that it’s here to stay.

First, a definition from Wikipedia is in order:

In computing, master data management (MDM) comprises a set of processes and tools that consistently defines and manages the non-transactional data entities of an organization (also called reference data). MDM has the objective of providing processes for collecting, aggregating, matching, consolidating, quality-assuring, persisting, and distributing such data throughout an organization to ensure consistency and control in the ongoing maintenance and application use of this information.

Many large organizations have long been hamstrung by redundant or mismatched data sitting in silos, making analyses of customers and employees much more difficult than necessary. Simple questions such as, “How many customers bought from us last quarter?” can easily become long, complicated exercises in data extraction, manipulation, and analysis.

A few more thoughts about MDM:

  • Because it’s so new, relatively few organizations have purchased formal MDM applications.
  • Many organizations have been using de facto or homegrown MDM solutions for years to combat these very problems. Translation or “XLAT” tables, ETL scripts, and other creative “back end” solutions come to mind.

Limitations of MDM

At its highest level, MDM addresses a fundamental challenge confronting many businesses: data in multiple systems often becomes splintered or redundant. While not comprehensive, a brief overview of MDM’s limitations is in order.

First, contrary to what many believe, the purchase and implementation of an MDM tool is not a silver bullet. Overly complicated architectures, cultures that ignore data quality, and poor corporate governance don’t magically disappear because of the introduction of an MDM tool.

Second, there no such a thing as a “golden record”, as MDM expert and author David Loshin has pointed out.

Finally, while this may be an overly simplistic view, MDM may be a bit of a “Band-Aid.” In other words, organizations may benefit more in the long term from the following:

  • Utilizing simpler architecture.
  • Moving towards a model of data governance as described in Tony Fisher’s excellent book The Data Asset.
  • Conducing routine data quality and data profiling exercises.
  • Retiring legacy systems.

Realistically speaking, however, many large organizations have for years built a hodgepodge of standalone systems designed to accomplish one objective or serve the needs of one department—not the entire organization. These aren’t going to be instantly dismantled, especially in a down economy. Even organizations with enterprise-wide apps and systems often have exceptions.

The Future of MDM

For a variety of reasons, I expect us to hear more about MDM in the coming months and years. I believe that it’s firmly moving to the right on the technology adoption lifecycle.

Consider two types of organizations:

  • Type A – Those that only use products and technologies provided by their approved vendors.
  • Type B – Those that use whatever products and technologies make sense.

For more conservative organizations (Type A), Initiate’s MDM offering now has IBM’s imprimatur. In a way, MDM is now more palatable to them. For more cash-strapped or more adventurous organizations (Type B), there are alternatives to dealing with large software vendors.

Most recently, in late January of 2010, Talend announced the release of an open source MDM offering. Then, in April, the company received an additional $8M USD in venture capital funding.

Outcomes from these moves are likely to include:

  • Users are more likely to dabble in the basics of MDM by playing with this solution
  • Some subset of those users will engage with Talend proper, and license the legitimate application (and this would compare/compete with other MDM offerings)
  • Some third party vendors or startups will probably build on top of current OS MDM apps to create more feature-rich MDM solutions. Forks can be huge. Consider that WordPress started as a fork back in 2003.

Conclusion

For a technology to gain acceptance, it has to be both useful and affordable. In its brief history, the question with MDM has never been about the former, especially in large organizations. OS alternatives have certainly addressed the latter, although open source and “free” should never be confused. The future of MDM is bright.

What do you think?

Category: Information Development
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