John Radcliffe, research vice president at Gartner (LinkedIn), described MDM as a technology-enabled business discipline in which business and IT organizations work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the organization's official, shared master data assets.
"Today, most organizations juggle multiple sets of business and data applications across corporate, regional and local systems," Radcliffe said. "At the same time, customers are demanding faster and more complex responses from organizations, leading to an inconsistency that hinders the organization's ability to measure and move within the market."
With MDM, Radcliffe added, CIOs can create a unified view of existing data, leading to greater enterprise agility, simplified integration and, ultimately, improved profitability.
As part of its "Predicts 2011" body of research, Gartner has compiled a number of key MDM predictions to help organizations plan for 2011 and beyond. These include:
- From 2009 through 2014, MDM software markets will grow at a compound annual growth rate (CAGR) of 18 percent, from $1.3 billion to $2.9 billion.
- MDM is a fast-growing software market that is attracting a lot of attention, and it continued to exhibit double-digit growth, even through the worst of the global recession.
- The emerging master data domains (such as supplier, human resource, asset and location) continue to exhibit even more rapid growth from a smaller base.
- MDM growth is being driven by niche providers, as well as established players.
- Gartner foresees a larger, more unified MDM software market, reaching nearly $3 billion by 2014.
- The continued growth in the established and emerging segments of the MDM market provides a major business opportunity for software and service providers that specialize in these areas, and it will continue to attract new entrants, Gartner believes.
- In addition, the rapid growth of the MDM market means that skilled MDM resources are in great demand among software and service providers. As a result, end-user organizations will struggle to adequately resource their MDM programs.
- Gartner advises end-user organizations to weigh the advantages of best-of-breed MDM software vendors (in terms of functionality, data domain and vertical-industry expertise) versus the greater long-term viability risk. "Organizations should invest in MDM technologies at a time that is consistent with their technology adoption profile," the analyst firm said.
- By 2015, 10 percent of packaged MDM implementations will be delivered as software-as-a-service (SaaS) in the public cloud.
MDM today is typically implemented on-premises, according to Garnter. This is partly because MDM software providers have, so far, not created specific MDM-as-a-service products that are scalable and elastic or multi-tenanted, and also because there is reluctance in many organizations to place such important, heavily shared data as master data outside the firewall. However, on-premises MDM solutions are increasingly being integrated with SaaS applications, and there are examples of MDM solutions already being implemented in the "public Cloud."
Gartner says that MDM software vendors will seek to leverage the Cloud-computing value proposition and ramp up their marketing of MDM-as-a-service in defined scenarios, and they will also put development focus on MDM solutions that conform better with the stricter definition of Cloud computing (that is, scalable, elastic and with a shared infrastructure). Once organizations gain more experience with the public Cloud and private Cloud, the early adopters will seek to gain the same benefits with a wider range of software, including packaged MDM solutions, the research firm said.
Gartner advises organizations to consider implementing MDM solutions in the Cloud if they don't have the skills in-house, if a subscription model is more acceptable than a capital expense, and if the planned MDM capability is restricted in scope to mainly one functional group within the organization, or is initiative-specific and a consolidation-style implementation mainly used for analysis and reporting purposes.
Demonstrating the Value
Through 2015, Gartner added, 66 percent of organizations that initiate an MDM program will struggle to demonstrate the business value of MDM.
If IT departments initiate an MDM initiative, they often struggle to get the business on board and to demonstrate the business value of MDM, particularly if there are no business-process-oriented metrics and financial quantifications to define and measure success. MDM needs to align with the business vision and strategy, and will require executive business sponsorship, strong involvement of business stakeholders and change management.
"It's not just an IT project. The business needs to take responsibility and be accountable for master data governance and stewardship," said Radcliffe. "Unless organizations take a holistic, business-driven approach to MDM, addressing governance and metrics requirements in particular, they risk having their MDM programs fail. Internal politics won't be brought under control without a governance framework — and without a metrics structure, there will be no way of objectively defining what success looks like and measuring whether or not it has been achieved."
Gartner points companies to its "Seven Building Blocks of MDM" framework as one way to ensure that the MDM program is business-driven and holistic. Businesses should create an MDM governance framework, an organizational structure and a set of roles and responsibilities that fits the needs of the MDM strategy and the politics of the organization, the advisory firm said.
"In our annual predictions for MDM, we've looked at various challenges that organizations face including the need to demonstrate MDM's business value, the lack of effective multi-domain MDM functionality in a single product, and the continued strong growth in the MDM software market," said Andrew White, research vice president at Gartner (LinkedIn). "Organizations should leverage Gartner's predictions to build their MDM business cases. They need to ensure that their MDM programs are on a sound, business-oriented footing and to be realistic when dealing with MDM vendors that claim to do everything with a single solution."
Additional information is available in the Gartner report "Predicts 2011: Master Data Management Is Important in a Tough Economy, and More Important in Growth." The report is available on Gartner's Web site here.
Gartner is hosting a Master Data Management Summit 2011 February 2-3 at the Park Plaza Westminster Bridge hotel in London. Further information about the Summit is available at europe.gartner.com/mdm.