At the Gartner MDM Summit, one analyst explains how CDI differs by industry and type of customer, and how the CDI market continues to evolve.
Posted Sep 21, 2007
HOLLYWOOD, FLA. -- There is no "one size fits all" when it comes to customer data integration (CDI), and requirements differ depending upon the type of industry, customer, or organizational structure your business operates in or caters to, according to a presentation at the Gartner MDM Summit here today.
"Simply linking your ERP and CRM systems via CDI might work for certain companies, but for others it could involve an entire realm of enterprise applications," said John Radcliffe, research vice president at Gartner, during his presentation, "CDI Is Not One Size Fits All and It Will Keep Evolving." "It's a case-by-case procedure," he added.
When defining their company's CDI strategy and goals, and when determining which systems to integrate with a CDI hub, businesses should consider both the verticals they belong to and the business environments they operate in, Radcliffe said. He cited a U.S.-based retail client with over 80 million customers that needed to consolidate customer records from its Web site, order management system, and credit card/transaction database to effectively gain a single view of each of its customers. "If you're in manufacturing, you could be considering an entirely different solution, such as supply chain management," he said. "In hospitality, you're talking the reservation system."
Companies also need to consider the type of strategy, or architecture, that their business should take when deploying CDI, Radcliffe said, before identifying three such strategies:
To determine which style to pursue, Radcliffe told the audience, you "must review your organization's capabilities in leveraging a single view of the customer, and create a shared business vision that is driven by the business case, and only underpinned by IT."
- Registry Style: This CDI hub is simply acting as a "data traffic cop," directing data from application-to-application or from application-to-data-source. This is generally the least complicated CDI implementation, and is a good starting point.
- Transaction Style: In this case, the CDI hub is pulling data from a predefined "golden record" and pushing that data out to enterprise applications at the time that end users request it.
- Hybrid Style: A combination of both the Registry style and Transaction style. This is generally the most complicated, and also the most rewarding, but requires the most work and resource investment on the part of the organization.
In fact, Radcliffe stressed, ensuring that technology plays the proper -- and limited -- role is essential: "CDI, just like MDM and data quality, is not a technology issue," he warned. "It is a business problem, and everybody from C-level executives down must be made aware of it." To that end, Radcliffe also emphasized the importance of data quality as another critical factor in CDI success. "If you don't have the data quality practices in place, all you're doing with CDI is efficiently moving garbage from one enterprise application to the next," he said.
With sales of CDI software and systems becoming more commonplace, and with a number of success stories and best practices emerging, Radcliffe also discussd the vendor market for CDI hubs. The market itself is divided among a series of camps:
While all have their advantages and disadvantages, the key takeaway is that none of these CDI providers tackles the entire master data management (MDM) arena, though they're all moving in this direction.
"None of them offer what I like to call 'the Swiss Army knife' MDM solution. They're either focused entirely on CDI or offer CDI and parts of MDM," Radcliffe said, referring to CDI's overarching big brother."But they're all moving toward MDM because the market is pushing that way. While most businesses start their MDM initiatives by tackling CDI, they're realizing they're eventually going to have to go after MDM, so vendors are responding accordingly."
Radcliffe also said that, overall, the CDI market is still a maturing one, and "not yet at the plateau of opportunity." Addressing attendees' vendor-selection needs, Radcliffe suggested that customers should "choose a best-of-breed provider if the situation fits, but weigh [that] against the future consolidation that always takes place in a maturing market." One consequence of a still-maturing market, he added, is that it grows at an explosive rate, leaving service providers and vendors alike with a shortage of skilled labor.
"This happens to every market that suddenly becomes hot, so be careful you're not working with somebody that's receiving their on-the-job training, if you know what I mean," Radcliffe warned. "Be sure to carefully evaluate all the players and service providers you're working with, because CDI can be expensive," he added, citing the $1 million average price tag of CDI software -- and the fact that implementation and service-provider costs often run double or triple that amount.
"Most importantly, do a sound job of identifying your business needs, the industry you operate in, and your customer data," he told the crowd. "Those are going to be the factors that drive a successful CDI implementation."
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