MDM offers benefits, but make sure you measure them.

 

Gartner confirms the continued adoption of MDM.  Adopters need to track and measure the benefits to prove ROI.

Writers in fields from banking to marketing have covered Gartner’s latest research on master data management (MDM).  The findings are consistent with the consensus of opinion about MDM over the past several years: that MDM initiatives remain critically important as enterprises work through the recession and into the beginnings of recovery.

Two key findings from the new report about MDM adoption include:

  • Worldwide MDM software revenue will reach $1.5 billion in 2010, a 14 percent increase from 2009, and reaching nearly $3 billion by 2014
  • From 2009 through 2014, MDM software markets will grow at a Compound Annual Growth Rate (CAGR) of 18 percent, from $1.3 billion to $2.9 billion

What’s driving this growth?

In banking, it’s the ability to meet enterprise data management requirements called for by regulations such as those under the recently passed Dodd-Frank bill.  Bill Bradway with Bank Systems & Technology says the industry leaders will be those firms that “have anticipated and produced a comprehensive data management framework that will facilitate a stronger foundation for more effectively running their business (and all that it entails) and complying with future regulatory reporting requirements.”

For marketing, it’s projected growth in investments in marketing databases, according to UK direct marketing firm Thomson Local. This owes to Gartner’s observation that “MDM is being adopted to support numerous business and IT efforts that deliver revenue, service, agility and risk management improvement, cost reduction and integration simplification” — a spectrum that certainly encompasses MDM-enabled marketing activities.

Those observations join others from distribution, manufacturing, consumer products, healthcare, food serviceretail, and other industries, that master data management and product information management lead to reduced costs, faster time to market for new products, better customer service, improved regulatory compliance, and other measurable business benefits.

Which makes one of the Gartner findings somewhat puzzling:

  • Through 2015, 66 percent of organizations that initiate an MDM program will struggle to demonstrate the business value of MDM

The mystery is partially solved by Gartner adding that this is especially true “if there are no business-process-oriented metrics and financial quantifications to define and measure success.”  Which would seem to go without saying.

It is true that ROI for MDM initiatives can be hard to quantify. Lyndsay Wise, writing about the intrinsic value of MDM, observed that “quantifying better customer service or identifying a decrease in product cycle times and tying that to an MDM initiative may not be intuitive for organizations.”

However, with so many strategic and tactical gains to be realized through an MDM initiative, companies and their technology vendors should be able to determine in advance what constitutes measurable and realistically achievable goals for improvement through better data management and quality.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: