2009-10 Key Trends & Best Practices: Enterprise-Strength ... · 2009-10 Key Trends & Best Practices Enterprise-Strength ... Data Governance . Strategic Planning Assumption ... Role

2009-10 Key Trends & Best Practices Enterprise-Strength

Data Governance & MDM

Aaron ZornesChief Research Officer

The MDM [email protected] +1 650.743.2278

Presenter�

Presentation Notes�

All mega vendors will have an MDM story Therefore what is role of BOB vendors Role of mega vendors How does SAP shop address CUSTOMER data How does Oracle-Siebel shop handle PRODUCT data? Different entity type hubs, different brands will be the norm, not the exception … in G5000 enterprise �

mailto:[email protected]

© 2009 The MDM Institute The-MDM-Institute.com

“Best Practices” Session Topics

What are the business drivers for enterprise-strength DG?

What are the technology challenges in implementing DG for enterprise magnitude business problems?

Why is “active” DG superior to “passive” or “passive-aggressive” DG?

How are large enterprises justifying and catalyzing their DG processes?

Which are the “desirable” vs. “essential” DG solution criteria – e.g. GUI sizzle for hierarchy management vs. end-to-end team-based governance for the data steward function

How does an organization organize and execute through the four stages of DG maturity: anarchy (basic), IT feudalism (foundational), business monarchy (advanced), and federalism (acme)


Prologue

Enterprise-level DG that includes entire master data lifecycle (creation, promotion, archiving, …) is extremely difficult to execute for a number of reasons –organizationally & technically. Yet increasingly this is being mandated as a core deliverable of large-scale MDM projects.Through 2009-10, both major systems integrators & MDM boutique consultancies will focus on productizing their DG frameworks/methodologies while MDM software providers struggle to link upstream DG processes with downstream MDM hubs. By 2011-12, all mega vendor MDM solutions will evolve from “passive aggressive DG” mode to “active DG” wherein they provide the capabilities to capture business rules which in turn are propagated into an MDM.


Key MDM Issues for 2009-2010

• Provisioning substantive amount of “MDM-specific data governance”

• Partnering with a faithful service provider

• Betting on odds-on favorite MDM solution (brand/architecture/platform)

MDM 2.0 scenario: convergence of MDM & data governance


MDM Milestones www.tcdii.com/mdmresearch/assumptions.html

Architecture & models

Identity resolution

Party data quality

Analytics

Policy hubs

Enterprise search

Strategic planning assumptions to assist IT organizations & vendors in coping with flux & churn

of evolving MDM vendor landscape

Market maturation

Market momentum

Market consolidation

Budgets/skills

Data governance

MDM convergence

http://www.tcdii.com/mdmresearch/assumptions.html



Provisioning substantive “MDM-specific data governance”Partnering with a faithful service provider

Betting on odds-on favorite MDM solution (brand/architecture/platform)


Enterprise Data Governance Challenges

Break down functional & organizational stovepipes Integrate processes across the enterprise – including corporate technology, all LOBs, functional areas & geographic regionsEngage all levels of management & adjudicate between centralized vs. decentralized data stewardshipEvolve key stakeholders from “data ownership” to “data stewardship”Overcome lack of process integration in current “DG for MDM” offerings

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

oppty to take more strategic view of enterprise data governance


Data Governance Strategic Planning Assumption

During 2009, most enterprises will struggle with cross-enterprise DG scope as they initially focus on customer, vendor, or product; enterprise-level DG that includes entire master data lifecycle will be mandated as core phase 0/1 deliverable of large-scale MDM projects Through 2010, major SIs & MDM boutiques will focus on productizing DG frameworks while MDM software providers struggle to link governance process with process hub technologies; concurrently G5000 enterprises struggle to evolve enterprise DG in cost-effective & practical way from “passive” to “active” DG modesBy 2011-12, vendor MDM solutions will finally move from “passive-aggressive DG” mode to “active DG”

MDM MILESTONE

Data governance will remain problematic during 2009-10


“Data Governance for MDM” Market – Chaos or Confusion?

Data governance (DG) is vital to success of MDM projects – both initially & ongoingDuring 2009-10, Global 5000 enterprises will increasingly mandate that 'no MDM program be funded without pre-requisite DG framework’Moreover, market-leading vendors will come to market in late with own active DG frameworks to take back the lucrative DG business currently defaulting to SIsCorollary is few MDM vendors will be able to market their solutions without integrated active DG capability – one that embeds a workflow engine with metadata support for both structured & unstructured infoWhere will that leave the SIs – as partners, competitors or both?

Given lack of DG solutions from MDM platform vendors, SIs have had market largely to themselves; 2010 operative word = “coop-etition”



Predictions of IBM Data Governance Council

1. In some countries, DG will become regulatory requirement & companies will have to demonstrate DG practices to regulators as part of regular audits. This will likely affect Financial Services industries first, & will emerge as a growing trend worldwide.

2. Value of data will be treated as an asset on balance sheet & reported by the CFO while quality of data will become technical reporting metric & key IT performance indicator. New accounting & reporting practices will emerge for measuring & assessing value of data to help organizations demonstrate how DQ fuels business performance.

3. Calculating risk will become an IT function. Today in most organizations, risk calculation is done by a select group of individuals using complicated processes. In future, risk calculation will be automated allowing companies to more easily examine past exposure, forecast risk they face in future, & set aside capital to self-insure to cover risk.


Predictions of IBM Data Governance Council - continued

4. Role of CIO will change making this corporate officer responsible for reporting on DQ & risk to Board of Directors. CIO will have mandate to govern use of info & report on quality of info provided to shareholders.

5. Individuals will be required to take more responsibility for recognizing problems & participating in governance process to facilitate greater operational transparency & identification of risk. They will be aided by new categories of operational software that will demonstrate common DG problems & allow employees to self- govern; sponsor & vote on new policies; provide feedback on existing ones & participate in dynamic DG.

IBM DG Council established right approach – assessing DG from a maturity perspective across 11 categories with

"Entry Points" to enable organization to embrace more pressing needs while being able to tackle other aspects when ready


MDM Institute’s Data Governance Maturity Model

“Anarchy” (basic) –Application-centric approach; meets business needs only on project-specific basis

“Feudalism” (foundational) –IT policy-driven standardization on technology & methods; common usage of tools & procedures across projects

“Monarchy” (advanced) – business-driven, rationalized data with data & metadata actively shared in production across sources

“Federalism” (distinctive) – SOA (modular components), integrated view of compliance requirements, formalized organization with defined roles & responsibilities, clearly defined metrics, iterative learning cycle

0%

10%

20%

30%

40%

50%

Basic Foundational Advanced Distinctive

FSP

Non-FSP

Source: MDM Institute survey of 100+ Global 5000 IT organizations

Fin Svc providers are leading the way – in spend & discipline; technology can only achieve so much as organization must be

prepared to continually adapt & treat data as enterprise asset above project level; data needs to be an asset not a liability.


Rosetta Stone of DG Maturity Models

Stage Name

I Anarchy

II Feudalism

III Monarchy

IV Federalism

The MDM Institute

Common inquiry is “How do I get from Level 2 to Level 4 or 5?”

IBM Data Governance Council

DataFlux/SAS Gartner Research

Stage Name

I InitialII ManagedIII DefinedIV Quantitatively ManagedV Optimizing

Stage Name

1 Undisciplined

2 Reactive

3 Proactive

4 Governed

Stage Name

0 Unaware

1 Aware

2 Reactive

3 Proactive

4 Managed

5 Effective


Why Enterprise Data Governance

Overly complex IT infrastructure Silo-driven, application area-centric solutionsSlow-to-market delivery of new or enhanced application solutionsInconsistent definitions of key corporate data assets such as customer, supplier, & pricing mastersPoor data accuracy within & across business areasLOB-focused data with inefficient or nonexistent ability to leverage information assets across LOBsRedundant IT initiatives to re-solve data accuracy problems for each individual LOB

Uniform communications with customers, suppliers, & channels due to veracity & accuracy of key master dataCommon understanding of business policies & processes across LOBs & with business partners/channelsRapid cross-LOB implementation of new apps requiring shared access to master dataSingular definition & location of master data & related policies to enable transparency & auditability essential to regulatory compliance Continuous DQ improvement as DQ processes are embedded upstream rather than downstreamIncreased synergy for cross-sell & upsell

Pre-Governance Post-Governance


MDM Institute MarketPulse™ Survey Overview

ObjectivesDetermine top business justifications for DG programsUnderstand key technology challenges (failings) of current DG offeringsProvide evaluation framework for both current & soon-to-market DG offerings

Methodology = online surveys & interviewsPre-qualified, pre-existing relationshipC-level or next level below

Survey pool of 100+ Global 5000 size enterprises Oracle Data Governance Advisory BoardIBM Data Governance CouncilMDM Institute Advisory Council


Current Data Governance Survey


Data Governance “Framework” “Top 10” Evaluation Criteria

1. Methodology2. Data exploration/profiling3. Model management4. Rules management5. Decision rights management6. MDM hub integration7. Enterprise application

integration8. E2E data lifecycle support 9. Integrated metrics10.Vendor integrity/viability

“Data Governance for MDM” fracas will escalate as MDM vendors rush to usurp SIs; during 2009-10, MDM vendors

increasingly unable to sell MDM w/out integrated DG

http://www.mattwardman.com/blog/wp-content/uploads/20070411-old-scrummage-2.jpg


Open roundtables + support network between Oracle MDM customers, Oracle MDM & First San Francisco Partners

ObjectivesDiscuss & present most pressing DG challenges & issues, specifically in context of MDM

Identify solutions & best practices when implementing DG

Maintain sustained communication between webinar sessions through mailing lists & other communications

Oracle Data Governance Forum

© 2009 The MDM Institute The-MDM-Institute.com© 2009 The MDM Institute The-MDM-Institute.com

Oracle Data Governance Forum Participants

22


DGF June 2009 Session Selected Conclusions & Findings

DG must become more role-based & not attached to specific people

Align jobs & objectives to DG processes (involve HR, make it part of yearly evaluations,...)Ensure continuity of DG program & steady progress

DG must integrate day-to-day data mgmt & operational practices

Coordinate both operation’s senior leadership & SMEs as part of DG org

Senior leadership ensures buy-in & commitmentSMEs enforce DG & DQ policies, standards, & procedures in their respective functional areas

Coordinate data mgmt processes & policies at enterprise levelNo more “back hand shakes” between Business & IT in terms of data accessAll data requests should go through DG office



DGF June 2009 Session Selected Conclusions & Findings - continued


When managing data across truly global companies (decentralized, multi-national, multi-lingual), you’re only interested in core data that is shared (i.e. master data) = need:

Int’l senior leadership & champions to enforce DG vision, polices & proceduresInt’l representation in DG leadership group & working teamsAccommodate different security & privacy rules in each geo

When co-designing & implementing DG & MDMDG will provide guidance (standards, roles & responsibilities, oversight, etc.), creates & enforces policies for MDM hub design around data cleansing, duplicate detection, match/merge rules, error handling, data maintenance & mgmt, measurement & monitoring, & data sharing, etc.MDM Hub design & development project will track progress & escalate issues to Office of DG based on DG processes & to data stewards based on workflow as defined by business rules


Oracle End-to-End Data Governance


Overall Critique of Existing DG Capabilities

Mismatch of applying project-oriented methodology rather than asset-focused methodologies Methodologies missing the asset aspect of data … cost, decaying value, ROI for cleansing data, etc.Frameworks not addressing “community” aspect of shared asset development – e.g. wikis for global corporate business vocabulary, etc.Current DG solutions do not provide systemic rigor nor E2E lifecycle support

“(Integrated) Data Governance for MDM” market is a vacuum … nature hates a vacuum


SUMMARY – Data Governance for MDM

Don’t settle for “passive” / downstream data governance Demand “active” / upstream enterprise data governance Don’t expect “data governance maturity assessments” to provide road map out of anarchyRealize that “data steward consoles” are more than demo-ware for headless apps … but substantially less than enterprise data governanceAcknowledge that vendor viability matters Prepare to spend $250-$500K for initial DG solution

Enterprise data governance & MDM are codependent/interdependent … invest upfront in data governance for sustainability & ROI of MDM programs



Provisioning substantive “MDM-specific data governance”

Partnering with a faithful service providerBetting on odds-on favorite MDM solution (brand/architecture/platform)


Budgets & Skills Strategic Planning Assumption

During 2009, G5000 size enterprises will spend US$1M for MDM software, with addt’l US$3-4M for SI services; Global Service Providers will operate under this price floor by applying highly-customized, labor intensive frameworks & related acceleratorsThroughout 2010, skill shortages will greatly inflame project costs as demand for data stewards, enterprise data architects, & individuals with data governance experience outstrip market supply; concurrently, SIs will fill void in classic style by baiting & switching veterans for rookiesBy 2012, market will stabilize as enterprises react by training & protecting their own MDM staff with specific product & project expertise; until then, enterprises will struggle with re-skilling same resources multiple times as emerging/evolving data management technologies mature (e.g., Fusion, Netweaver, …)

MDM MILESTONE


Career Tracks Strategic Planning Assumption

Scarcity of “hands on” MDM experience existsDuring 2007-08, 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,

MDM Programmers

Product-Neutral

Product-Specific Off- Shore

On-Site


Understanding SI Phases of MDM Lifecycle

Phase 0 tasksScoping of Phase 1Limited proof-of-concept (POC)Requirements captureROI projectionVendor & product evaluation

Phase 1Limited deployment within single business division or department for single entity, e.g. customer or product

Phase 2Going enterprise-wide with single master entity, e.g. customer, product, supplier, etc.

Phase 2+Going enterprise-wide with more than one master entity, e.g. customer, product, &/or supplier, etc.

Phase 3Extending master data extra-enterprise-wide with more than one master entity, e.g. customer, product, &/or business partners, e.g. strategic sourcing supply chain, outsourced call centers, etc.


“Top 5” Technical Evaluation Criteria for MDM Services Provider

#1 – Extensible data governance methodology & accelerators

#2 – Industry-specific data model experience & ETL mappings

#3 – SOA architecture experience & accelerators

#4 – MDM product experience

#5 – MDM project experience (industry, geo, ego)

Partner's capabilities *must* include their data governance depth & available expertise


MDM “Value Add” of SIs

SIs are often necessary to sell C-level execs

Without C-level support, BUs will find it difficult to contribute funding & resources necessary to launch an MDM initiative – resulting in status quo with each business unit continuing to address issue at division-level (if at all)

SIs are needed to coordinate IT & Business

Readiness & maturityPlan for IT organizational change mgmt to support MDM effortsWork with business leadership to design & refine the “future state” business processes associated with new MDM commitments

SIs are needed to help transform IT organizations

To a greater degree than traditional app dev initiatives, organizational readiness & acceptance has huge impact on both success & sustainability of MDM initiative

After initial development of MDM program, SIs can help IT & Business by facilitating

Ongoing participation in development of business rules & resolution of master data match/merge issuesOngoing commitment to update both apps & business processes to leverage core data stored in MDM hub

Multiple potential DG areas to leverage SI assistance


BOTTOM LINE: Service Providers

Acknowledge that SIs are essential to success of majority of DG-driven MDM programs

Recognize that incumbent SIs are no longer so

Identify which SIs are market leaders in your industry & your chosen software technologies

Proactively manage key IT positions

Leverage SIs for their “value add”

Given substantial investment businesses undertake with SI partners, this area must be given scrutiny –

not only to contain costs, but to insure success of this vital infrastructure investment



Partnering with a faithful service provider

Provisioning substantive “MDM-specific data governance”

Betting on odds-on favorite MDM solution (brand/architecture/platform)

Deciding between “tactical/registry short term ROI” vs. “strategic/operational MDM long term ROI”

Opting for PIM-flavored MDM or MDM-flavored PIM

Rationalizing between 3rd gen MDM hub investments vs. more advanced, in-the-works semantic/MDM hybrid infrastructure


MDM Convergence Strategic Planning Assumption

During 2009, 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 2010-11, G5000 enterprises will broaden their MDM business initiatives from single use case, single entity to multi-style, multi-entityBy 2012, enterprises without long-term multi-entity MDM strategy run ironic risk of building “MDM silos”

SOA-based multi-entity MDM manages master data domains (customers, accounts, products, etc.)

with significant impact on most important business processes


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

Enterprise MDM = multi-entity MDM – such epiphany enables the enterprise to avoid “random acts of MDM”

Pricing Policy HubPricing Reference Master

CDI HubLocation Master

Customer RegistryPIM Data Hub

Evolutionary Multi-Entity MDM

Entity-SpecificMDM Data Marts

Myopic

Strategic


Enterprise Master Data Management: Market Review & Forecast for 2008-12

1. Rapid growth of MDM market into mid-market as well as across industries & geographies

2. Steady evolution away from data-centric hubs into application hubs

3. Elemental movement towards “enterprise MDM” in multiple phases

4. Futile dogmatic resistance is fading against the power of multiples

5. Inexorable shift to formal data governance structures

The market for MDM solutions is significantly & quickly expanding – across geographies, industries, & price points

“Top Five” Report Findings


Solidified Requirements for 3rd Generation MDM Solutions

SOA/shared services architecture with evolution to “process hubs”Sophisticated hierarchy management High-performance identity managementData governance-ready frameworkPersisted, registry & hybrid architecture flexibility

MASTER DATA

SEARCH

MASTER DATA

MODELING

MASTERDATA

APPLICATIONS

MDMMASTER

DATA PREPAR-

ATION

MASTERDATA

GOVERNANCE

MASTERDATA

MOVEMENT

MDM has morphed from “early adopter IT project” to “Global 5000 business strategy”; phase 2 MDM

deployments are already fusing party & product domains


Evolving Requirements for 4th Generation MDM Solutions

Multi-entity MDMMultiple master versions of customer – legal/geo boundaries effect

Process/policy hub architectureUnstructured information supportIntegrated data governanceEnterprise search

MASTER DATA

SEARCH

MASTER DATA

MODELING

MASTERDATA

APPLICATIONS

MDMMASTER

DATA PREPAR-

ATION

MASTERDATA

GOVERNANCE

MASTERDATA

MOVEMENT

G5000 enterprises’ business strategies mandate long term, strategic “multi-entity MDM” – in turn enabled by policy-

driven data governance

Presenter�


All mega vendors will have an MDM story TDAT is simply the most recent example Therefore what is role of BOB vendors Role of mega vendors How does SAP shop address CUSTOMER data How does Oracle-Siebel shop handle PRODUCT data? Different entity type hubs, different brands will be the norm, not the exception … in G5000 enterprise �


Business Value of Multi-Entity MDM

With 4th generation MDM platform, an enterprise will be better able to

Identify & provide differentiated service to its most valuable customers via their relationships (households, hierarchies); also cross-sell & up-sell additional products to these customers

Introduce new products & product bundles more quickly across more channels to reduce the cost of New Product Introduction (NPI)

Provide improved enterprise-wide transparency across customers, distributors, suppliers, and products to better support regulatory compliance processes

Enterprises must plan now to realize economic value & competitive differentiation via multi-entity MDM during next 2-5 years


MDM Solution (brand/architecture/platform) Bottom Line

Promote MDM as essential business strategy with IT deliverables to leverage high-value info used repeatedly across many business processesPosition MDM as enabler of key business activitiessuch as improving customer communication & reporting –rather than an important infrastructure upgradeBegin MDM projects focused on either customer-centricity or product/service optimization Plan for multi-entity MDM juggernaut evolving from “early adopter” into “competitive business strategy”Insist on Enterprise MDM software capable of evolving to multiple usage styles & data domainsPlan now to realize economic value & competitive

differentiation via multi-entity MDM during next 2-5 years


BOTTOM LINE

Invest in DG for long-term sustainability & ROI of MDM

Acknowledge currently “DG for MDM” does not exist as integrated solution

Primarily processes with custom workflowOne-way export to MDM hub (if any)Minimal support for “enterprise” decision rights

Plan for most MDM vendors to deliver DG workflow engine during next 6-12 months with metadata engine for both structured & unstructured

Recognize mega vendors (IBM, Oracle) focused to deliver capability in 2H2009 – with resultant SI partner chaos

Manage DG providerTo integration roadmap with MDM platform of choice

To avoid “brain drain”


MDM SUMMIT™ Conference Series

MDM SUMMIT Europe 2009 Park Plaza Victoria Hotel | April 20 – 22, 2009

MDM SUMMIT Asia-Pacific 2009 Four Points by Sheraton Sydney | April 28 – 29, 2009

MDM SUMMIT Canada 2009 Hotel Admiral Toronto-Harbourfront | June 25 – 26, 2009

MDM SUMMIT Americas 2009 San Francisco Hyatt Regency

August 24 – 26, 2009

MDM SUMMIT New York 2009 New York Hilton | December 1 – 2, 2009


About the MDM Institute

Founded 2004 to focus on MDMbusiness drivers & technology challenges

MDM Advisory Council™of 100 Global 5000 IT organizations with unlimited advice to key individuals, e.g. CTOs, CIOs, data architects

MDM Business Council™ website access & email support to 15,000+ members

MDM Road Map & Milestones™annual strategic planning assumptions

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MDM Market Pulse™ monthly surveys

MDM Fast Track™ one-day public & onsite workshop rotating quarterly through major North American, European, & Asia-Pacific metro areas

MDM SUMMIT™ annual conferences in NYC, San Francisco, London, Frankfurt, Madrid, Sydney, Toronto, & Tokyo

“Independent, Authoritative, & Relevant”

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

Founder & Chief Research Officer of the MDM InstituteConference chairman for DM Review’s 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

Presenter�


A Global Perspective Trusted by 3,300+ Enterprises Worldwide Our client base includes emerging and global IT end-user, vendor, and public-sector enterprises More than 250 Analysts/Consultants Average 13 of years IT experience Former CxOs who understand boardroom challenges Former Big X consultants who understand first-hand the ins and outs of large strategic IT projects Former IT executives who understand back- and front-office issues Former IT vendors who understand the markets Fun Facts 25% of META Group’s research staff have over 20 years of experience 40% were directors and above 10% were at the CxO level 20% come from the Fortune 500�


MDM Institute Advisory Council

100 organizations who receive unlimited MDM advice to key individuals, e.g. CTOs, CIOs, & MDM project leads

Representative Members

3MBell CanadaCaterpillarCisco SystemsCitizens CommunicationsCOUNTRY FinancialsEducational Testing SvcsEMCGE HealthcareHoneywellIHSIntuitLoblawMcKessonMedtronic

MicrosoftMotorolaNational Australia BankNationwide InsuranceNorwegian Cruise LinesNovartisPolycomRoche Labs Rogers CommunicationsScholasticStrykerSunTrustSutter HealthWestpacWeyerhaeuserWoolworths


Authoritative

Relevant

Independent

Aaron ZornesFounder & Chief Research Officer

The MDM InstituteThe-MDM-Institute.com

a.k.a. www.tcdii.com

http://www.tcdii.com/

Documents

2009-10 Key Trends & Best Practices: Enterprise-Strength ... · 2009-10 Key Trends & Best Practices Enterprise-Strength ... Data Governance . Strategic Planning Assumption ... Role