New data management solutions and best practices will spur enterprises to switch from simple data warehouses to reactive CDI data marts.
Posted Jun 8, 2006
Companies are realizing, through the continued introduction of CRM and other operational solutions, that customer information is no longer a single flare, but rather multiple fires shooting across departments and desktops. Enterprises will need to adopt master data management (MDM) and customer data integration (CDI) solutions and their related best practices to fully leverage the endless line of customer-facing applications, said Jill Dyche, partner with Baseline Consulting and the keynote speaker at today's CDI Executive Summit in New York.
"Recent CRM projects have embraced the 'hurry up and deploy' rule of thumb and the results have been less than stellar," Dyche said. The result is a long-awaited customer dashboard that displays inaccurate information, and is the big reason for many of the failed multimillion dollar implementations from the late 1990s. "An accurate, integrated customer data mart that interacts with all applications is the key," she said.
MDM represents the umbrella under which all types of corporate data, such as product, customer, and accounting information huddle. CDI is a segment of MDM that focuses on integrating customer data into a single data mart that interacts with, pushes, and pulls data from any application, front-end or back, that requires customer information.
Dyche stressed that while many companies have learned the importance of keeping their data clean and housing it in a single repository, the best practices and technologies that will let customer-facing applications like CRM leverage it have only started to develop in the last year or two. Many companies have installed data warehouses, which Dyche admits is a step in the right direction, but they're limited in their ability to keep data clean and transfer it to and from multiple applications. "Data warehouses are the flower gardens and CDI solutions are the bees. Just like bees spreading all the pollen from flower to flower, CDI takes all the customer information and moves it around from application to application."
Tony Fisher, president and general manager of DataFlux, also spoke at the summit, positing that more enterprises will eventually adopt the MDM and CDI models. Although these models weren't practical five years ago, Fisher said three developments within recent years have made the concept of MDM and CDI more appealing to corporations. First and foremost, improvements to data quality tools and best practices have made companies aware that data cleansing isn't a "one-time deal." As customer data moves through various applications, such as CRM, ERP, and supply chain management, the data decays. "The big advantage to CDI tools is data quality is already baked into the solution. It becomes an automated process," Fisher said.
The development of new service architectures, such as SOA and XML, allow applications to transfer data and "talk to one another like never before. It allows companies to define a standard format for data and will play a big role in the ongoing push towards CDI."
Last, enterprises are following new best practices called data models that force them to start the data integration process by defining the most important attributes of their customer base, then using CDI to map and export that data to the right applications. In the past, Fisher said, enterprises would start with the technology, then define their customer data. "With CDI, we're starting from the inside and working our way out."
Citing a recent IDC report, Fisher said that most enterprises have over 70 different applications and that for every $1 spent on purchasing them, $5 is spent on integrating them. The big ROI from CDI is that it lowers the cost of integration, while "dramatically improving the accuracy of dashboards and reports your operational applications are creating based off that info."
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