Is MDM In the Cloud Right For You?

Is MDM in the Cloud Right for You?Understanding the risks and rewards

Cloud-based technology has had a massive impact on the way companies do business in practically every industry. Its ability to reduce overhead, streamline IT, and increase efficiency has made it one of the most impactful technologies of the 21st century. However, because of privacy, security, and performance concerns, many organizations have been reluctant to use the cloud for master data management (MDM) applications. Varying opinions and misinformation about the advantages and disadvantages of using cloud-based MDM cause many companies to avoid the topic altogether.

Introduction

Cloud-based technology has had a massive impact on the way companies do business – in practically every industry.

2 IS MDM IN THE CLOUD RIGHT FOR YOU?

There are many misconceptions about what is meant by public cloud vs. private cloud. The simplest difference between these terms comes down to shared resources. Public cloud services utilize shared resources for all clients, which may or may not include the network, servers, and many other key elements of the service infrastructure. This means that they generally provide less security, privacy, and performance than private cloud services, which utilize dedicated resources for each client.

Public or private cloud?Given the specific privacy concerns relating to MDM, these differences can have serious implications. One of the most important distinctions for MDM is whether or not the service makes use of public Internet space. This is important because traffic routed through other countries can be subject to purview by government agencies or may be less secure. It is important for companies to understand how the cloud vendor stores and routes data before making any major decisions regarding the technology.

It is important for companies to understand how the cloud vendor stores and routes data before making any major decisions regarding the technology.

A company’s needs, risk tolerance, and culture will ultimately decide whether cloud MDM is right for them. However, every organization should make an effort to understand what cloud MDM actually is and how it can affect them, because the potential rewards of the technology can be significant.

This guide was created to provide an overview of some of the most important rewards and risks of cloud technology so your company can make a more informed decision.

Is cloud-based MDM right for my company?


Rewards

One of the most important advantages of cloud MDM solutions is that they are simply more economical when comparing total costs for implementation and maintenance of the system. This can significantly reduce IT expenditure in your organization and allow for reinvestment in innovation and new technology development. Although software costs for cloud solutions may at first seem more expensive, it is important to consider all factors. When comparing the costs of in-house solutions vs. cloud-based solutions, organizations should consider several components, including development time, maintenance, real estate, personnel, electricity, and security costs. In many cases, cloud-based services lump all these expenses into a single line item, greatly simplifying the cost-comparison calculation.

More cost-effective


Infrastructure and operations averages approximately 60% of total IT spending.1 Building out the IT infrastructure and the operational support necessary to implement an on-premises MDM solution can be time-consuming and costly. Cloud vendors take care of all of the details, so organizations don’t have to invest in expensive servers, power, facilities, and other items. This can significantly reduce the overall costs of delivering effective MDM solutions.

Less infrastructure

Infrastructure and operations averages approximately 60% of total IT spending.

Cloud-based MDM solutions are often more cost-effective for several reasons, including:

Hiring skilled IT staff can be incredibly costly and represent a significant portion of the departmental budget. There is reason to believe that these costs will continue to increase in the coming years. 60% of IT professionals reported getting an increase in salary in 2014, with the average increase being 2.1%.2 Cloud services can significantly reduce these costs by eliminating the need for extensive maintenance, security, and development personnel.

Reduced personnel requirements


Server failures, improperly planned projects, and other technical difficulties can greatly increase the costs of implementing an MDM solution. Cloud vendors take on most of these risks and reduce them to a simple monthly fee, significantly lowering a company’s chances of incurring unplanned expenses. This allows for better strategic planning and likely reduces overall costs of implementation.

Fewer unforeseen expenses

Cloud-based solutions are simply a more efficient use of resources than on-premises systems. Tools, infrastructure, and personnel belonging to a cloud vendor can be used by a wide array of different companies, allowing them to charge more competitive rates. By comparison, an organization that implements its own MDM solutions in-house will be forced to foot the bill for the entire project. In many cases, it may well not make sense for a single company to create the infrastructure and support systems necessary to implement an MDM solution.

Economies of scale

Cloud-based solutions are simply a more efficient use of resources

than on-premises systems.


Deploying a traditional MDM solution can take many months, or even years. Implementing a cloud-based solution can be finished in a fraction of that time. This means that the solution will be available faster, and time-to-market can be dramatically reduced. In today’s highly competitive and fast-moving technology world, this can be a significant advantage.

Cloud-based solutions can be finished in a fraction of the time it would take to deploy a traditional MDM solution.

Faster deployment and more flexibility


Many companies have large IT departments, but often can’t meet all of their technology needs. Demand almost always seems to outstrip the resources that IT has deliver. Cloud can help cover this gap by allowing companies to source new solutions without significant time or resource investment. This means that the IT department can do more without getting bogged down in complicated projects.

Avoid overloading the IT department

MDM provides many benefits, including increased accuracy, better decision-making, and easier collaboration among users. Unfortunately, the fact that IT resources are often stretched thin can be a major roadblock to adoption of the systems. The cloud eliminates many of the problems that slow deployment by providing the infrastructure, applications, and support necessary to get started almost immediately. This means that companies can begin taking advantage of the benefits of MDM faster.

Deploy faster

Although implementing an MDM solution will still require IT to ensure that the data pathways are connected, business leaders can significantly reduce their dependence on the department by choosing cloud solutions. This allows companies to more easily focus on using the technology to improve business processes without worrying about technical details.

Less dependence on IT groups


One of the biggest challenges when implementing any IT solution is preparing for future use. It is often impossible to know how many users will need to be supported, how much data will need to be stored, or how powerful the systems will need to be in one, two, or 10 years. Cloud solutions practically eliminate this problem by providing on-demand infrastructure that can grow with the company. Respondents to a 2014 survey indicated that scalability was the top cloud benefit.3 The ability of cloud MDM to rapidly meet increasing demand will ultimately make it easier for companies to grow and capitalize on new markets.

Scalability

When building an on-premises solution, it is often difficult to scale that solution to meet the needs of new locations. Cloud computing greatly simplifies this challenge, and many cloud providers offer localized service depending on the geographic needs of their clients. This makes expanding to new parts of the world significantly more straightforward, safer, and less expensive.

Deploy to different locations

Because cloud resources can often be allocated almost instantly, organizations can scale quickly as demand grows. This allows companies to always have the resources they need without fear of overinvestment in infrastructure or development. When demand drops, it is usually equally easy to scale back and reduce costs. This provides vastly superior flexibility and reduced risk compared to traditional MDM solutions.

On-demand resources

Cloud solutions practically eliminate potential scalability problems, by providing on-demand infrastructure that can grow with the company.


Although there are clearly many efficiency, scalability, and cost benefits to utilizing a cloud-based MDM solution, it is important to be aware of the potential risks these services can pose. MDM solutions must be reliable, highly secure, and able to meet the needs of the company. Choosing the right cloud vendor and working with them to ensure all requirements are met is critical to building a cloud MDM strategy that is effective and safe.

Risks


Privacy and security

Ensuring data privacy is one of the most critical concerns when considering MDM in the cloud, especially for customer, patient, or other sensitive data. Rules regarding the handling of this type of data vary considerably by industry and geography. Many European countries, for example, do not want data residing on or passing through U.S. servers because of potential government access and use. Cloud solutions often transmit data over the Internet and this data can reside on servers all over the world. Companies need to ensure that their vendor offers various types of cloud solutions that will ensure that the company’s privacy needs are met, including having servers in the geographic locations that the company requires. This can prevent potential privacy issues and reduce the risk of non-compliance with internal or external regulations.

Ensuring data privacy

Protection from breaches and malicious threats can be a double-edged sword with cloud services. For many small to medium sized companies, cloud vendors often are able to offer better security than they would be able to accomplish in-house. However, larger companies may have specific security requirements that a generic vendor may not be able to deliver. In a limited number of cases, this can present a problem for organizations looking to implement an MDM in the cloud solution.

Ensuring data security


If an organization relies on cloud services for daily operations such as marketing, sales, service, and risk management, then constant access to those services is a necessity. Unfortunately, network outages, problems with cloud vendors, and many other risk scenarios could lead to data being completely inaccessible. This could severely decrease efficiency, pose potential security risks, and reduce the ability of staff to assist clients, patients, or customers. Companies must plan for and address any potential business continuity risks before making the decision to deploy a cloud MDM solution.

Risk management and business continuity

Network outages, problems with cloud vendors, and many other risk scenarios could lead to data being completely inaccessible.


There are two primary uses of MDM. One is for operational needs such as sales, customer service, or compliance. These uses require real-time access and would be significantly impacted by discontinuity scenarios. However, there are also analytical uses, such as decision support, that may not be as important to the day-to-day operations of the organization. In these cases, losing access to the cloud server for a period of time may not be a major problem. It is important for organizations to identify how they will use the MDM solution and develop their risk management strategy accordingly.

Determine usage scenarios

One way to overcome any potential continuity issues when using a cloud solution is to deploy on-premises backups that are synchronized with the cloud service at least once a day. This provides a means to access data when the network is down or the cloud service is otherwise inaccessible. By having a failsafe measure, companies can significantly reduce the risks associated with using a cloud-based service.

Consider on-premises backups

On-premises, synchronized backups help companies significantly reduce the risks associated

with using a cloud-based service.


Cloud solutions are designed for reusability and scalability. This drives the economies of scale that allow providers to offer extremely competitive rates when compared to on-premises solutions. However it also means that they are not usually designed to be customized. Solutions purpose-built to meet specific needs may not be available or may be too costly, limiting the potential uses of cloud services in the real world.

Limited customization

The vast majority of companies will need their MDM solutions to perform a well-defined and largely similar set of tasks. However, for the few companies that have highly-specialized requirements, cloud solutions may pose a problem. The cloud is designed to meet the needs of the highest number of users, and those outside the mainstream may be left behind. In these cases, it may be necessary to develop in-house solutions that work on their own or in tandem with the cloud vendor to bridge any gaps in functionality.

Problems meeting unique needs

Although they will never reach the flexibility of in-house solutions, many cloud vendors do offer the ability to create customized solutions built around their core offering. In most cases, this customization can meet a company’s needs by allowing them to work with APIs and other tools to create a more robust, personalized system.

Some degree of customization


In many ways, MDM is an excellent fit for the cloud. The primary goal of MDM is to provide a more centralized platform for consolidating and managing data. Cloud tools are accessible everywhere and to everyone, and extremely flexible. This allows companies to gain the benefits of MDM without making significant investments in infrastructure. In many cases, the benefits outweigh the risks. However, it is important for companies to consider their unique needs and make their own determination of whether cloud vendors can meet them. It is also important that leaders ensure that their own practices are compatible with the cloud, allowing them to take full advantage of the power of MDM.

In summary

Key points• Cloud MDM services are usually more economical than traditional

solutions because they can capitalize on economies of scale.

• Cloud solutions can be deployed faster and with little initial investment.

• Cloud services often can be sourced on-demand, allowing them to scale more easily.

• Privacy in the cloud remains a concern. Organizations must ensure that the vendors offer options that meet the organization’s privacy needs.

• Cloud-service accessibility can be a concern for some organizations. In these cases, it is important to have a failsafe such as an on-premises backup.

• Cloud services are often less customizable than solutions developed in house.

• Rewards of MDM in the cloud outweigh risks for many, but not all, companies.


Innovative Systems has been providing software and consulting services to major companies in more than 40 countries for more than 45 years. We deliver both on-premises and cloud-based (SaaS) multi-domain enterprise MDM solutions that can be deployed for operational or decision support requirements. Our headquarters is in Pittsburgh, PA; our EMEA and APAC head office is in London; and we have regional offices in various countries.

World Headquarters790 Holiday DrivePittsburgh, PA 15220-8127 US

Phone: 800.622.6390International Call: +1.412.937.9300E-mail: [email protected]

About Innovative Systems, Inc.

www.innovativesystems.com

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Phone: +44 (0) 20 7422 6310E-mail: [email protected]

Rapid, accurate, risk-free MDM

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www.innovativesystems.com

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1. http://www.computerworld.com/article/2909569/salarysurvey2015/it-careers-security-talent-is-red-hot.html

2. http://www.computerworld.com/article/2471465/it-careers-145708-computerworlds-2014-it-salary-survey-highlights.html

3. http://www.rightscale.com/blog/cloud-industry-insights/cloud-computing-trends-2014-state-cloud-survey

References

© Copyright 2016 Innovative Systems, Inc.

http://www.computerworld.com/article/2909569/salarysurvey2015/it-careers-security-talent-is-red-hot.html

http://www.rightscale.com/blog/cloud-industry-insights/cloud-computing-trends-2014-state-cloud-survey

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Is MDM In the Cloud Right For You?