If MDM's So Great, Why Aren't Companies Mastering It?

Companies trying to solve their data problems may be missing the benefits of master data management (MDM), according to a new report by Aberdeen Research (a division of Harte-Hanks). Of the 4,600 respondents in "Winning Master Data Management Strategies for 2008-2009," only 17 percent reported having an active MDM effort in place, with another 28 percent having some kind of future MDM plans. A whopping 54 percent of respondents claim to have no plans to employ MDM whatsoever. But even the apparent MDM nonbelievers still report specific business challenges and needs that, according to Aberdeen, MDM policies, processes, strategies, and tools can help to enable or support.

Despite the seemingly slow uptake, a May 2008 MDM report by Forrester Research insists that MDM is on its way out of the early-adoption phase --  and that organizations are now talking about how MDM can improve business activities by linking together disparate data. As Michael Dortch, an Aberdeen senior analyst, writes in his firm's report, "This ‘think globally, act locally’ approach is translating MDM-related initiatives into significant business benefits; including better customer care, cross-selling and upselling, and more effective business decisions and processes." Dortch goes on, "The promise of such benefits is sufficient to drive investments in MDM-related solutions even by companies that claim to have no MDM plans." Aberdeen finds that nearly all companies -- 98 percent -- continue to struggle with data communication, integration, and quality issues, despite the investments made by some in MDM tools. 

"At organizations that are highly distributed or operating dispersed, with loosely coupled IT and business infrastructures, getting and keeping hold of ‘one version of the truth’ is particularly bedeviling," Dortch writes. The report provides case studies showing how MDM use in the customer data sector can tackle that challenge.

In fact, according to Aberdeen, the link between CRM and MDM is stronger than ever: Sixty-five percent of respondents are using MDM solutions for customer data needs -- about four times better than the overall rate of MDM penetration -- evidence that successful efforts can translate into opportunities for additional revenue through cross-sells, upsells, and referral business. Among the surveyed companies that Aberdeen considers "best-in-class" -- those using MDM and focusing on customer data quality -- the results were striking:

  • 94 percent reported improved data integrity;
  • 95 percent reported improved data usability; and
  • 89 percent reduced the time required to make customer data ready for business use.

Dortch says that customer data is a logical starting point with MDM efforts. Once benefits are gained with CRM data, MDM efforts can be spread throughout the enterprise. He adds that deployment of an MDM solution can aid and alleviate time spent on the following business-related tasks:

  • business intelligence and analytics;
  • regulatory compliance;
  • risk management;
  • data classification, governance, migration, and transformation; and
  • IT agility in response to evolving business needs.

He warns, however, that an effective roadmap must be created before an MDM deployment begins, and not left to ad-hoc management. Dortch suggests that organizations:

  • focus each initial MDM-related initiative and project on a specific business goal, need, process, or task;
  • evaluate MDM solutions based on the ability to interoperate with already in-place or planned infrastructures and solutions; and
  • ensure that MDM initiatives and deployments are supported by well-documented policies and processes.

Dortch writes that the significance of having tools in place that collect, clean, and analyze data cannot be overstated. "Whether looking specifically at customer data quality and integration or MDM as a whole, ensuring the integrity of the data the organization is relying on is vital if that data is to be used to maximum efficiency."

CRM Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

Mastering Customer Records

How services-oriented architecture will shape the future of CRM: Part One in a four-part series.

The Master Piece

As unified data hubs go mainstream, here are six broad strokes to help you master the art of master data management.

Serving Many Masters

Customer data and business data must be controlled through master data management.

MDM Gets Trendy in 2008

As master data management moves out of the early-adoption phase, Forrester Research forecasts trends for the year, reasons for failure, and recommendations for future success.

MDM for Companies on the Go

Purisma's new Data Hub product focuses on improving data accuracy while reducing implementation times, which one analyst says increases these types of solutions' value.

Business Objects Moves to Master Its Data-Product Portfolio

The BI vendor releases a new product- and region-focused data cleansing solution as it continues to expand its Enterprise Information Management line beyond customer data.

The 2007 Market Awards: Data Quality

Data quality applications are making a major transition: from departmentalized point solutions to enterprisewide tools.

Master Data Management: Debunking Mega-Vendor Hype

A flexible MDM platform delivers rapid return-on-investment.

The Next Generation of CDI

CDI must evolve to deliver customer information wherever and whenever it is needed.

Master Data Management

Studies and service offerings point to the need for better information herding.

IBM Tops Gartner's CDI Hub Quadrant

Big Blue becomes the first vendor to land in the leaders circle of a CDI hub quadrant, but must improve its ability to execute.

Companies Still Grapple with Effective CDM

Crafting a well-defined customer data management initiative is essential to supplying a holistic view of the customer.

MDM's Monumental Momentum

A series of keynote speakers at the Gartner MDM Summit outline why the time is right for master data management; Gartner reveals its 7 Building Blocks of MDM.

CDI Comes in All Shapes and Sizes

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.

Purisma Points to MDM

The vendor unveils the first of a series of point solutions designed to provide organizations with a point of entry into MDM initiatives, according to an industry analyst; version 3 of its flagship product arrives.

Dun & Bradstreet Buys Purisma

The union of two data providers represents "a monumental acquisition," says one analyst -- though more deals are likely.

Customer Hubs Get Hot

Forrester Wave on Customer Hubs, 2006: As more attention turns to customer hubs, the continuing development makes it difficult to see clearly into this space; a new Forrester Wave takes a focused look at vendor offerings.

Dirty Little Data Secrets

CRM's real truth requires enterprises to clean up -- reorganize -- customer information with data integration solutions, Web-services technology that integrates data applications.

A Little Help From Your Friends

A new crop of services firms helps solve data-related frustrations.

Tech Solution: Master Data Management

Business Problem: Companies need to integrate disparate information.

The MDM Effect: Who Stands to Gain?

A study finds businesses are turning to master data management solutions to improve their business intelligence results; data governance best practices are still key.

Master Data Management: Considering the Customer First

Get an enterprisewide system of record.

DataFlux Has the Edge in Gartner's Magic Quadrant on Data Quality Tools

Magic Quadrant for Data Quality Tools '08: Business Objects, IBM, Informatica, and Harte-Hanks' Trillium Software join the SAS Institute unit in the top box.

SAS and SPSS Hold the Lead in Gartner Magic Quadrant on Data Mining

Magic Quadrant for Data Mining '08: Packaged applications are all the rage -- but as the pair atop the list remains the same, a Visionary emerges overseas.

IBM and Oracle Lead Gartner's 'MDM for Customer Data' Magic Quadrant

The scope of master data management widens -- and Gartner alters its report name to reflect the change.

Still No Masters in Gartner's 'MDM for Product Data' Magic Quadrant

The latest assessment of master data management for product data covers 11 vendors -- and reveals no leaders. Is product data that much harder than customer data?

MDM in the Real World

Putting master data management into practice.

Are You Ready for MDM?

MDM Summit '08: Master data management isn't easy, but experts believe there's never been a better time to get started.

The Maturing of MDM

MDM Summit '08: Vendors and customers bemoan the growing pains of master data management -- and revel in its growth spurt.

The Secret to Continuous Customer Management

CRM Evolution '09 — Day 2: Altimeter Group Partner Ray "R" Wang clues conference attendees in on how customer data can lead to a connected enterprise — and why B2B is dead.

Informatica Snags Siperian for $130 Million

"This acquisition rounds out our MDM strategy beautifully," says Informatica's CMO.

IBM Acquires MDM Player Initiate Systems

After weeks of rampant speculation -- and just six days after Informatica and Siperian dashed to the altar -- IBM and Initiate finally tie the knot, adding yet another variety of master data management to Big Blue's arsenal, and extending its reach into the healthcare and public sectors.