DataDelta Master Data Management (MDM) Workshop

Session 3:
MDM Technology & Implementation Options

Aaron Zornes Ed Allburn

Chief Research Officer President & CEO
The MDM Institute DataDelta, Inc.
aaron.zornes@tcdii.com allburn@datadelta.com

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Most Common CDI-MDM Topologies

IMPLEMENTATION STYLE DESCRIPTION

External (Service Provider) • Database marketing providers
• Data service providers
• Service bureaus
Persistent (Database) • Master customer information file/database
• O
Operational
ti ld
data
t store/active
t / ti data d t warehouse
h
• Relational DBMS + Extract-Transform-Load (ETL) +
Data Quality (DQ)
Registry
g y ((Virtual)) • Metadata layer
y + distributed q query
y ((enterprise
p
information integration or EII)
• Enterprise application integration (EAI)
• Portal
Composite (Hybrid) • Ability to fine-tune
fine tune performance & availability by
altering amount of master data persisted
• XML, web services, service-oriented architecture
(SOA)
“Chernobyl” • Encapsulate legacy applications

Composite/Hybrid
C it /H b id iis majority
j it architectural
hit t l preference;
f
Registry/Virtual 2nd choice
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Architecture & Data Models

• During 2008, vendors will expose MDM capabilities as “always on”

y p
services in loosely-coupled architectures; enterprises
p will begin
g
establishing a central, business-side led data mgmt team with
embedded data quality & external data update services in flow of
core business processes
• During 2009-10, mega vendors (IBM, ORCL, SAP, TDC) will focus
significant resources on “industry content” of data models which will
p
force specialist vendors to stay
y “data model lite” via specialization
p in
B2B/B2B2C hierarchy management & distributed MDM
• Not until 2011-12, will mega MDM vendors rewire foundational
AZ4
software to fully
y support
pp strategic
g application
pp infrastructure ((Fusion,,
NetWeaver, …) & have completed transitioning from client/server to
SOA; concurrently, G5000 business requirements will drive vendors
into 4th gen full spectrum hubs that support structured & unstructured
info

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3 ‫שקופית‬

AZ4 IBM & Oracle will deilver REGISTRY style product or packaging in 2007
Aaron Zornes, 02/03/2007
Identity Resolution

• During 2008, independent DQ vendors (AddressDoctor, G1, HI, Trillium) will

focus on name & address cleansing as they struggle against better
funded match/merge & data profiling capabilities increasingly integrated
with mega vendor MDM; ongoing challenge will be aggregation of
customer data
d b
balanced
l d against
i privacy
i di
dictates
• During 2008-09, MDM capabilities for classifying, discovering &
archiving party relationships while maintaining privacy will become
major requirement; concurrently, users will be challenged to discern
price/performance/scalability & accuracy of matching algorithms;
• By 2009-10, use of cross platform/cross brand customer keys will
become core to enabling seamless loyalty programs & online services;
sophisticated MDM hierarchy management capabilities will include
“global IDs” as mainstay feature to link both legacy & newly-built hubs
with DSP’s enrichment data

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Why Organizational Hierarchy Management?

• Based on recognition of need to

– Grow beyond mature North American & Western European market
– Support global customer service
• G5000 businesses are now recognizing opportunity to take more strategic
view of “global account management”
• Market demand for “customer hierarchy management” – esp. B2B – capability
to augment
g mega
g vendor’s data hub strategies
g (IBM, ORCL, SAP) will explode
p
during 2008-09
• MDM solutions which incorporate such capabilities will be key factor in
successful deployment
p y of g
globally-enabled
y MDM solutions
• 3rd party hierarchy data inadequate or non-existent for certain georaphies –
e.g., Equifax/Austin-Tetra, D&B, …

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Organizational Hierarchy Management

• Key features
– Abilit
Ability tto model
d l complex
l relationships
l ti hi – legal,
l l organizational
i ti l&
cultural
– Abilityy to handle overlapping
pp g hierarchies – multi-party
p y model
– Visual hierarchy management tool
– Integration with data governance processes
• Short list
– Initiate Systems; Hyperion; IBM; Oracle-Siebel; Purisma; Siperian;
Stratature
• Use cases
– Global account management
– Risk management
– Basel II, USA Patriot, AML compliance
– M&A
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Analytics

• During 2008, the convergence of MDM & business intelligence (BI)

will
ill accelerate
l t as enterprises
t i lleverage MDM conceptst iin a BI context
t t
• Through 2009-10, ongoing agglomeration of Analytical MDM &
Operational MDM will increasingly benefit enterprises by blending
such transactional hubs with master reference data repository as well
as provide greater visibility into the impact of master data quality on
business performance metrics
• By 2012, inline & real-time
real time analytics derived from MDM-enabled
MDM enabled
aggregation of both transactional & historical data will have become
a major source of sustainable competitive differentiation for Global
5000 enterprises

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Policy Hubs

• During 2008, MDM vendors will lag their BPM counterparts in

providing
idi workflow
kfl orchestration
h t ti to t synchronize
h i the th trusted
t t d sources
that comprise a federated master data store
• Throughg 2009-10,, the megag CDI-MDM vendors ((IBM,, ORCL,, SAP)) will
struggle to provide BPEL-compatible workflows while specialist MDM
solutions rush distributed Collaborative MDM capabilities to market
• By 2012,
2012 without such flexible workflows
workflows, organizations will merely
rebuild the same master data files they evolved the past 15-20 years
with their ERP & CRM infrastructures

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Data Governance

• During 2007, enterprise-level data governance will be mandated as a

core deliverable
d li bl off llarge-scale
l CDI
CDI-MDM
MDM projects
j t delivered
d li d via
i RFP
RFPs
• Through 2007-08, major systems integrators & CDI-MDM boutiques will
focus on pproductizingg their data g
governance frameworks while most
CDI-MDM solution providers will struggle to link business process
design with process hub architecture
• By 2008-09,
2008 09 both corporate & LOB data stewards will be a common
position as Global 5000 enterprises formalize this function amidst
increasing de facto & de jeure recognition of information as a corporate
asset.
t

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Party Data Quality

• During 2008-09, enterprises will focus more on degree to which “party

data quality”
quality (consumer,
(consumer subscriber
subscriber, owner
owner, member
member, vendor,
vendor establishment,
establishment contact
contact,
…) is sufficient to meet requirements of diffuse business entities
• By 2009, ”quality” metrics will increasingly be defined specific to
purpose of particular business function (product development
development, mktg,
mktg sales
sales,
order admin, service, compliance, analytics, …) & in turn be driven by enterprise-
wide data governance initiatives
• Through 2010
2010-11,11, wide deployment of loosely-coupled
loosely coupled SOA
architectures will catalyze consumption of highly-optimized data quality
functions as made available via both mega DSP & enterprise
application vendors

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 Why Data Governance? Why Now?

• Businesses have been governing data for 20+ years, however,

only
l a rare ffew are d
doing
i it wellll ttoday
d
• Many companies historically assigned DG to a data
management group whose job is to integrate & manage data
• Contemporary DG challenges are far greater
pp
– Break down functional stovepipes
– Integrate processes across the enterprise – including
corporate technology, all LOBs, functional areas &
geographic regions
– Engage all levels of management

Based on recognition
g of issues at hand, an improving
p g economy,
y & increasingg regulatory
g y
requirements, businesses are now recognizing the opportunity to take a more strategic
view of data governance
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Why Data Governance? Why Now? – cont’d

• Once you know what data is worth, you need to calculate probability for
risk in a business processes
• When you understand value of data & probability of risk, you can
evaluate how much to spend to protect it, manage it, and invest in
adequate controls
• This is basis of modern underwriting – assets, risk, controls
• Doing g this systemically
y y requires
q a combination of organizational
g
structures, business processes, & technology – a “data governance
blueprint” for:
– Data quality
– Information integration
– Business intelligence

IT management must work with business leadership to design & refine “future state”
business processes associated with data governance commitments
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Data Governance Juggernaut

Data Data Data

Governance Governance Governance
Becoming Must Become Will Become
“De Rigueur” “De Facto” “De Jure”

Data Customer Master

Warehouse Æ Data Integration Æ Data Management
(Batch) (On Line)
(On-Line) (Just
(Just-in-Time)
in Time)

Enterprise
p risk management
g is emerging
g g as a major
j issue
within most financial institutions & is VERY data-centric
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 Data Governance Maturity Level

50%

40%

30%
FSP
20% Non-FSP

10%

0%
Basic Foundational Advanced Distinctive

Source: February 2006 CDI Institute survey of 50 Global 5000 IT organizations

• BASIC ((“anarchy”)
anarchy ) – App-centric approach; meets business needs only on project-specific basis
• FOUNDATIONAL (“IT monarchy”) – Policy-driven standardization on technology & methods; common
usage of tools & procedures across projects
• ADVANCED (“business monarchy”) – Rationalized data with data & metadata actively shared in
production
d ti across sources
• DISTINCTIVE (“Federalist”) – SOA (modular components), integrated view of compliance requirements,
formalized organization with defined roles & responsibilities, clearly defined metrics, iterative learning
cycle

Overall, FSPs are leading the way for non-FSPs

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Data Governance Enables
Business Process Mgmt -> Policy Hubs
Privacy
Preferences

Pricing
Bundles
Discount
Policies

Compatibility

Process /
Next Best
Offer Policy
o cy Hub
ub

Legacy

Upgrade/
pg
Downgrade
Shipping
Approvals
Eligibility

Methodology is needed to bind process steps, skills & software to produce

D t Governance
Data G deliverables
d li bl

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Enterprise Search

• Through 2008, the unique properties & behavior of master

reference data will spawn a series of vertical applications &
specialized features within MDM solutions
• D i 2009-10,
During 2009 10 semantically-enabled
ti ll bl d metadata
t d t willill enable
bl
“search” for both structured & unstructured info across a variety
of applications such as catalog management & deep web
search, & enterprise search
• By 2012, enterprise semantics & SOA-enabled data services will
provide the technology foundation for policy hubs; concurrently,
the 4th generation of hubs will innately support Analytical,
Operational, & Collaborative & MDM business services

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Data Quality - More Vital Than Ever

Data Quality Process Components

• Profiling
• Extraction & Staging
• Cleansing & Standardization
• Matching / linking / de
de-duping
duping / householding
• Augmentation
• Survivorship
• Maintenance

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Match Accuracy is Imperative

"5% of a firm's clients can generate 95% of revenue“

- Tony LoFrumento,
Executive Director of CRM
Morgan Stanley

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Most Valuable Customers at Greatest Risk

"5%
5% of a firm's
firm s clients can generate 95% of revenue“
revenue

By their very nature,

nature your Most Valuable Customers
have the greatest amount & complexity of data.

Therefore, your MVCs are disproportionately more

likely to be impacted by match accuracy problems
problems.

Bottom Line: The more valuable your customer

the greater the risk your ROI being hindered by
match
t h accuracy problems
bl iin your d
data
t warehouse.
h
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Most Sophisticated Tech at Greatest Risk

Example:
Marketing tools & techniques increasingly sophisticated:

• Direct Marketing
• Database Marketing g
• 1-to1 Relationship Marketing
• Customer Relationship Management (CRM)
• Modeling
• Loyalty & Churn
• Privacy & Compliance
• “Customer Centricity”

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Risk Continues to Grow

Data increasingly massive & more diverse:

• Customer & prospect data

• Transaction histories
• International
• Business Lines
• M&A Subsidiaries
• Enterprise-wide “Single Customer View”
• More customer touch-points
touch points & data sources

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Session End

Questions & Answers

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