Mastering Data Requires Attention to Detail

MDM solutions have also been expensive, costing hundreds of thousands if not millions of dollars. The cost involves not only the software but also a lot of custom integration work. Typically organizations spend $1 or $2 on services for every software licensing dollar.

With costs that high, expenses are often spread out over several budget cycles, leaving projects scheduled to run for years. The reality is that many of them never end. And unlike other applications that hum along once the software has been installed, MDM projects continue to require significant tuning because businesses develop new marketing and customer service plans, new data constantly enters the pipeline, and mergers and acquisitions create data overlap.

A number of vendors, including ActionIQ, IBM, Informatica, Openprise, Orchestra, Profisee, Reltio, SAP, SAS Institute, Syncsort, Teradata, and Tibco, sell MDM solutions. Even though these products have been available for decades, the market is relatively small and the growth has been tepid. Enterprises spent $1.4 billion on these systems in 2017, up from $1.3 billion the previous year, according to Gartner. Openprise avoids the term "MDM" and uses "data orchestration" instead because it views the former negatively.

All hope is not lost, though. A few changes, including new cloud-based MDM tools that ease the integration work and lower project costs, could boost MDM adoption.

Also, businesses are starting to learn from their past mistakes. "If a company wants to clean up all of its data and make it perfect, then they are setting themselves up for failure," says Tasso Argyros, CEO and founder of ActionIQ. "They need to be pragmatic, focus on a small area, and try to make their data cleaner but not necessarily perfect."

In such cases, the potential benefits are significant. Lead scoring becomes more efficient as firms are better able to correctly identify potential customers. They identify high-value clients more easily and better manage cross-selling and upselling. The customer service team has more information on hand when interacting with clients.

One success story is Medallia, which has been in business for 15 years. The company helps large organizations, like Paypal and Tory Burch, improve their customer experiences.

Raimondo Murari joined the company a year ago as marketing operations director, and his department focuses on using data analytics to extend its own sales reach. The Medallia marketing team collects and consolidates information from half a dozen marketing applications. Generating needed reports was challenging; the problem was data quality. "It was like having a nice sports car but poor roads to drive on," Murari explains.

Throughout the year, the Medallia sales and marketing teams hold small informational dinners for prospects, but creating lists of potential attendees for certain cities was daunting.

So when Murari heard about Openprise, he decided to give its product a test run. "We wanted a tool that would be easy to use," he says.

Medallia worked with Openprise to improve marketing data quality. As a result, the Medallia marketing team was able to identify the metropolitan areas of its prospects so that it could identify more prospects for its field events and eliminate much of the dirty data. The project took only a few months to complete and did not have much overhead. Because of the success, the marketing firm plans to extend its use of Openprise to other applications.

Most companies want their prospect data to be cleaner, but because of the way that systems are designed, most firms create dirty data. Like Medallia, they can take steps to improve their data quality, but such work is not simple. "MDM benefits are possible, but the process requires a long period of soul searching and cultural changes for customers as well as vendors," Gartner's O'Kane concludes.

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Paul Korzeniowski is a freelance writer who specializes in technology issues. He has been covering CRM issues for more than two decades, is based in Sudbury, Mass., and can be reached at paulkorzen@aol.com or on Twitter at #PaulKorzeniowski.

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