Master Data Management 2007: The Year In Review

by Rob Karel.

As 2007 comes to a close, I've decided to take a step back to reflect on what's happening within master data management (MDM). In early 2007, I published a market forecast for master data management that highlighted a $344M total MDM software market size (not including services) in 2006 with anticipated growth to over $2.2B by 2010. In this research, I also predicted the following:

• A single technology solutions for cross-data-domain MDM would be 18-24 months away (translates to mid-2008 at the earliest).
• Data management vendors of all shapes and sizes would try to convince their customers that they offer MDM solutions, further confusing an already complex market.
• There would be new large MDM players entering the market to challenge IBM, Oracle, and SAP.

From a technology perspective I have seen positive momentum towards multi-data-domain operational MDM solutions, especially from vendors such as IBM, Initiate Systems, Oracle and Siperian. That being said, in 2008, IBM and Siperian will appear to be "first to market" with these multi-domain offerings (Siperian's MDM Hub was available in early 2007 and IBM's MDM Server available early 2008). Of course, both of these vendors will need to continue to demonstrate significant 'in production' customer success stories to validate their approaches and architectures. Also none of these vendors have effectively figured out how to converge the process and workflow-heavy functionality required to support traditional product information management (PIM) solutions and I believe that will be the Achilles heel of most of these vendors (I believe IBM would agree with me regarding this challenge, which is why its MDM Server is complementing — and not replacing — IBM's WebSphere Product Center for its first release).   

Unfortunately, I was more right than I even imagined when it came to vendors jumping on the MDM bandwagon. I have seen or heard MDM marketing from vendors specializing in data integration, business intelligence, data quality, data profiling, data warehousing, and enterprise search, as just a few examples. Certainly many (but not all) of these vendors can provide minor or even major functionality of value to an MDM ecosystem, but none provide the implied comprehensive MDM solution. It's almost as if these vendors believe that if they don't have MDM listed somewhere on their marketing collateral they will go out of business. Who knows, maybe they're right — but it certainly doesn't help information managers and enterprise architects trying to build their MDM strategy to decipher the market.

Regarding my prediction that a new major MDM player would enter the market, I'd have to say I've so far been proven wrong. Yes, Microsoft did acquire Stratature — but that was more of a BI-centric analytical MDM investment and doesn't qualify Microsoft as an operational MDM solution provider.   More recently D&B acquired Purisma, which is certainly an interesting turn of events where one of the world’s largest providers of B2B data firmly enters the MDM software application market. But don't expect D&B to steal significant MDM market share from IBM, Oracle, or SAP — especially since Purisma primarily specialized in customer data. If anything, one can argue that SAP is losing relevance as a major enterprise MDM solution since its focus still seems to be on mastering only data within SAP environments with less focus on the more challenging heterogeneous environments facing most MDM challenges. But stay tuned in 2008, I still expect the major players to be challenged with HP high on my list of potential entrants. Also, don't count SAP out too soon — with its acquisition of Business Objects we may see some renewed energy and investment into its MDM products.

While all of the product development, marketing, and M&A activity coming from the MDM vendors is interesting and entertaining, the most valuable and insightful information about the evolution of the MDM market comes from the Forrester customers I speak to every day. Unlike my coverage of more mature data integration technologies like ETL where vendor selection is the most common question asked, I rarely field questions about MDM vendor selection. Regarding MDM, these customers are more concerned about data governance, organizational readiness, architectural strategy, business case development, prioritization, and the biggie — do we really need to worry about MDM? If so, why?

What does it all mean?  I'm happy to report that it means you are asking the right questions at the right time.  Many MDM technology alternatives will be there for you once you're ready — the MDM vendors are making sure of that — but first be sure your organization is prepared to deal with the cross-functional and technical complexities of adopting a master data management strategy. Let's see what happens in 2008!

Notes From Oracle OpenWorld

by Connie Moore, Colin Teubner, Rob Karel, Ken Poore, Rob Koplowitz, Stephen Powers, Barry Murphy and Claire Schooley.

A few weeks ago, several Forrester analysts attended Oracle World. Now that we've gotten back and had a chance to think about what we've heard, we wanted to post this blog to share our thoughts with clients. Here are some observations on what we heard from Oracle about BPM and middleware, data integration and data quality, search and collaboration, enterprise content management and social computing, message archiving and retention management, and human capital management.

BPM and Middleware feedback from Colin Teubner:

What really struck me is how much Oracle was talking about middleware. Charles Phillips opened his keynote talking about it and Oracle's application integration architecture (AIA — if you don't know what that is, it's a whole separate discussion), and Larry spent a lot of time in his keynote talking about it too. In fact, middleware has been the fastest growing part of Oracle's business for at least two or three years, and they have several significant advantages over IBM's stack from my perspective.

Specifically, they are talking about having the only business process management suite that covers content-centric processes using the same engine as for integration-centric or people-centric processes. (This discussion wasn't at the executive level, but farther down in the BPM product management area.) They poked fun at "some vendors" who make you use different, acquired technology for different types of processes. I haven't seen specifics of how Oracle's BPEL product (Collaxa) works with Stellent though, but they definitely do NOT go for IBM's idea of a "portfolio" of software. It's a comprehensive stack, and if you don't want to use one piece of it, that's fine — just use the other pieces and they'll integrate with what you have. They don't sell anything that overlaps in functionality with anything else.

Data Integration and Quality feedback from Rob Karel:

My main takeaway from OracleWorld, specifically around Oracle's data integration strategies, is that its data quality software strategy is a mess.

Oracle already has some internal competition from an ETL perspective between its Oracle Warehouse Builder (OWB) product that the Database Group embeds within the 11g database and the Fusion Middleware groups' Oracle Data Integrator (ODI), which was acquired last year from Sunopsis. While Oracle is doing some cross-development between the two solutions, for the most part these two teams operate independently with their own roadmaps and objectives — sometimes competing for mindshare.

The most recent demonstration of this was when I met separately with executives from the database group, the ODI team, and the master data management team and discussed what Oracle is doing about data quality. The ODI team just informed me of a DQ partnership with Trillium Software with the release of Oracle Data Quality for Oracle Data Integrator (ODQODI).  ODQODI is a joint development partnership that packages both Oracle's ODI data integration and Trillium's DQ products into a single license, single install. ODIODQ includes Trillium's batch data profiling, parsing, and matching functionality, although customers who are looking for real time data quality or postal address verification would need to engage Trillium directly to enable those capabilities and services. This is a strange partnership because I expect ODI to be Oracle's "real-time" integration solution, while the partnership only supports batch (not real-time) data quality.

The database team, on the other hand, continues to focus on data as an embedded part of OWB functionality and doesn't seem to care what ODI is doing.  In the meantime, the MDM team is focusing its integration efforts with ODI, but I don't see this Trillium/ODQODI partnership as all that valuable for their MDM product since they should prefer to have real-time/transactional data quality capabilities to complement their MDM offerings.

Oracle has other data quality solutions spread throughout its portfolio including Siebel Data Quality Matching Server used within its Siebel apps environment, recently acquired Hyperion System 9 Financial Data Quality management that came along with its purchase of BI vendor Hyperion, and matching and parsing functionality embedded within its Universal Customer Master, Oracle Customer Hub and Oracle Product Hub MDM offerings. To enhance data quality within its MDM offerings, Oracle also partners with Silver Creek Systems for product data quality and Trillium for customer data quality. 

I believe Oracle will need to reconcile its internal product development and partnering strategies to eliminate the confusion created by so many data quality offerings spread across its portfolio. 

Search and Collaboration feedback from Ken Poore:

I focused on search while at Oracle World. I had several one-on-ones, a few which included my colleague, Matt Brown. We had a session with a partner that had positive things to say about the Oracle Secure Enterprise Search (SES) product and team, most notably that the team was very helpful and took many of their suggestions and rolled it back into the product — a good sign for a still relatively young product. In my experience, that sort of 'listening' only lasts for the first two or three releases of a product. We also had a session with a customer, but it was more portal-centric and turned out to be marginally useful.

I had an extended couple of sessions with Vishu Krishnamurthy (Director of Development for most of their collaboration tools) and several of the product managers. It was a very positive two-way exchange. They shared many of their latest developments, and I shared some my thoughts on their direction as well as some ideas that I have been developing to help push the market along. I felt — and they concurred — that SES is just emerging as a true contender against similar products from IBM and Microsoft. They are still fleshing out a lot of me-too capability, but they are really bolstering their connectivity capabilities and entity extraction, two key areas in the enterprise search market these days that could leap-frog or least enable them to catch up quickly. Oracle has some really solid ideas, especially around distributing components of search indexing to the owners of the applications being searched (CRM, ERP, etc.) instead of leaving it in the hands of the 'search team'. Doing so enhances the buy-in from every department involved and leverages the application owner's expertise and context.

So while I would say there were no earthshaking announcements, I felt like they have a very strong product management, technical, and marketing strategy that will only gain momentum from this point forward. It is a very competitive market, and like IBM, they will struggle trying to be successful against the pure-plays for customers that do not have a significant incumbent investment in Oracle products (or in IBM products, in IBM's case).

Enterprise Content Management and Social Computing feedback from Rob Koplowitz:

I heard a bit about the ECM direction from Rich Buchheim. He states that at least one Stellent product will be retooled to run directly on Content DB. That's an interesting development from a scalability perspective. I suspect that will be a major engineering effort and won't be fully implemented in the next release.

The other thing that was interesting is that WebCenter Suite is being positioned as the standard front-end for Fusion apps. As a matter of fact, one of the defining elements of a "Fusion" app is that it will have a WebCenter front-end. The convergence of WebCenter and Content DB is pretty cool. Essentially, any app using WebCenter will have native access to content stored in Content DB. Essentially, it means that Oracle apps will be able to seamlessly surface content in context in any application. The cool part will be that content generated on one app can be surfaced anywhere. For example, if a document is stored as part of sales process in a SFA app it can be called natively from inside of a support CRM app if they want to see what the customer was promised. Since it's a Web service call from a database with rich metadata the content becomes extremely portable.

The other thing Oracle talked about a lot was Social Computing. There was a big emphasis on blogs, wikis, social networking, tagging and RSS in WebCenter, which again means it can be natively leveraged in Fusion apps.

Enterprise Content Management feedback from Stephen Powers:

I spoke with some members of the ECM team, and they were talking up integrations between Oracle’s Universal Content Management, and Siebel. But Siebel will act as the base application, not UCM. So, if Siebel customers are looking for ECM, Oracle wants to offer them an SOA-based ECM option that sits on top of Siebel, rather than trying to sell them a separate UCM package. They're also making noise around product catalog management, and real-time predictive analytics. They hedged a bit on functionality roadmap, though.

For Digital Asset Management (DAM), Oracle plans to go upmarket, with integrations with Adobe InDesign. And it will be able to have greater video management capabilities, such as management of multi-part files, indexing of closed captioning, management and indexing of call center audio files.

I also spoke with someone from Sealed Media, the DRM vendor that was acquired by Stellent a few months before Oracle bought them. Oracle has rebranded Sealed Media as Information Rights Manager. But I got the sense that they are not very well integrated with the rest of the company; while we spoke about Sealed Media functionality, I didn't get the sense that they're working very closely with other members of the UCM team.

Human Capital Management feedback from Claire Schooley:

HCM people in recruiting and learning talked about the social computing aspects of learning that are coming soon (whatever that means) and that will be a part of Fusion in the future. Here's an overview of the scenario:

An organization that wants to hire an intern who might turn into an employee after graduation would contact colleges and get student recommendations from professors. An email would then be sent to the students suggesting that they go to a link on company's Website and read about the job. If student is still interested, he/she registers and then can interact about the job with those in charge. If still interested, the student completes a proposal on how he/she would approach and carry-out the task along with information about themselves and a picture if they want. These proposals are read and reviewed by staff and online discussion occurs (Web and video) with the final two or three candidates. Once chosen, the successful candidate is put into a partitioned group of temporary employees and completes all the HR forms and information well before they start work. They also are part of a community of practice (CoP) that they can access to get more familiar with organization, project documents, etc. and meet and interact with people on the team they will work on. When they start work, students know and have interacted with the people they will be working with, will have taken care of all HR transactional material — and are ready to work. (The key is that all these technologies are linked seamlessly).

Convergence Of The 3 Bs

by Boris Evelson and Colin Teubner.

Business intelligence (BI) practitioners have always thought of the world as data-centric. Data integration, data warehouses, data marts, reports, and query builders were always about data. BI has traditionally excelled at answering questions like "what happened" or even "why did it happen" but always fell short on "what do I do about it" and fell short of the next logical steps which traditionally have been the realm of business process management (BPM) and business rules engines (BRE). This data-centric view of the world turns out to be plain wrong. The world is much more process and rules-centric. We run many processes every time we come to the office, these processes generate data, which in turn trigger rules, and in turn generate more data output that is being consumed by processes in an endless loop.

We've been researching the topic of "3Bs": BI, BPM, and BRE convergence for several months here at Forrester. We started out on the tack that while the requirements and applications for convergence between these technologies are very strong, almost intuitive, actual vendor solutions in the area are weak and require significant customization. While many vendors actually possess several of these technologies, innovation in combining them together has so far been limited to the BPM vendors — and because these companies tend to sell their wares as a platform, rather than as a specific solution to a problem, buyers are left to combine BPM, rules and BI themselves. Yes, many BI vendors can trigger basic report workflows based on certain conditions and can expose data or consume data as a service. And yes, many application vendors embed BI dashboards into applications. What we need today, however, are generic BI, BPM and BRE tools with clear integration points. Tomorrow, we'll be looking for end users and VARs putting these converged solutions together themselves.

Why is this convergence so important? BPM vendors sell efficiency gains, BI vendors sell visibility into business results, and rules vendors sell optimized decision-making — but for this type of software to have a profound impact on a business, all three technologies need to be used in a drive towards business optimization. BI tools are needed to help understand results of BPM processes; rules describe what constitutes a significant event and what actions should be taken; BPM is needed to provide process context and take action on those results.

And once an as-is process is optimized in this way, the process itself must be improved to see additional business gains. BI must step up and provide results in process context, combining both process metrics and business metrics. All this leads to real insight into the business, its processes and how they work, giving answers to more advanced questions. "How can we make this process faster?" becomes "Should we be doing this process?" or "What else do our customers need?"

An added benefit — icing on the cake — is "context-aware BI". BI has been traditionally hard to use, especially in a self service environment because most of the time users start with a blank slate. They open up a blank dashboard or an ad-hoc query tool and are immediately presented with a variety of KPIs, KPMs, facts, dimensions, etc. and are forced make a decision on where to start, what measures to pick first, what is really relevant to the problem at hand. In the converged world of process centric or context aware BI, one would almost never start with a blank dashboard. Since it is the process that pulls the dashboard automatically at the right place and the right time, the process is aware of where it is and what decision needs to be made. It can therefore pre-populate that dashboard with the right KPIs/KPMs or the right intersection of facts and dimensions for the user to hit the ground running with the analysis and decisions.

There seem to be a chicken and the egg syndrome going on here: Vendors are not putting a lot of attention to this matter because there's not much customer demand, and customers are not really thinking in terms of process-centric BI because no one's educated them on the benefits of going to converged 3B model. Who's right and who's wrong here? Please submit your thoughts and ideas and we'll do our best to include them in our upcoming report on the subject.

Microsoft RoundTable: An IMAX Movie Experience After Listening To FM Radio In Your Car

by Erica Driver.

This week I had a 2 ½ hour conference call with one of our clients. Normally I wouldn't blab to the world who we work with. But I think it's necessary here in the spirit of full disclosure — I'm about to rave about a first-time experience I had during a meeting with Microsoft using a Microsoft product called RoundTable.

A couple of my Forrester colleagues and 6 or 7 people from Microsoft were in a conference room in Redmond, Washington and I was in my home office in Rhode Island. Microsoft set up a Live Meeting Web conferencing session and had a RoundTable audio/video conferencing device on table in the meeting room. During the meeting, I had a screen like this one on my desktop (see screenshot below). It showed the PowerPoint slide we were discussing as well as a panoramic video of everyone in the conference room and a close-up of whoever was making the most noise in the room at the time. If we had been using the voice capabilities of the RoundTable device, rather than a separate conference bridge, the video close-up would have switched to whoever was speaking at the moment (including me, if I had had a Web camera on my laptop).

Now, is it just me or is it really, really hard to consistently pay attention during a long, multi-party phone conversations? I blogged about this in a post a few days ago. Here's where the beauty of RoundTable comes in:

• I could concentrate — I was fully engaged. Normally my eyes try to distract me from the work my ears are doing. It's often difficult to discern who's speaking and I have trouble making sense of silences. But this meeting was to a typical conference call as going to an IMAX movie is to listening to the radio while in your car — it's much more likely your mind will wander while you're listening to music and navigating the roads than when multiple senses are engaged in an immersive experience, as is the case at the Omnitheater.
• I felt connected to the others even though we weren’t together in the same room. The Forrester team had a communication back channel open via instant messaging (as, I'm sure, did the Microsoft team). This, in combination with the audio, video, and Web conferencing, enabled me to be a stronger contributor and helped prevent me from being relegated to a gray box on the table, as often happens during meetings when most people are together in one room with just one or two dialed in on the phone.
• Non-verbal communication was resurrected. During conference calls, so much communication gets lost in the silences between words. But as I interacted with my colleagues and the Microsoft team yesterday I could see heads nodding, people smiling or laughing silently, taking notes —  all things I would have no idea of without the video. I could see who left the room and when they returned. I guess even Microsoft is new at this — at one point in the conversation someone on the Microsoft side said during a quiet moment, "I’m feverishly taking notes." I said, "I know, I can see you" and we all got a chuckle. And sometimes when people in the room were speaking to me, I could see them looking at the phone on the table. (That probably would have been different if I was on video too.)

This session was my a-ha moment about the power of video to transform virtual meetings. It's time for me to get a Web cam.

What Does It Matter That Second Life Is Vacant?

by Erica Driver.

I'm doing a lot of research on using virtual worlds for work these days and have been spending some time in Second Life. One of the characteristics I notice is that there seems to be a dearth of people (avatars) around. Does it matter? Well, it depends what your expectations are. If you think of Second Life as "sort of like the Web," where you can teleport alone (surf the Web) from island to island (Web site to Web site) then it shouldn't matter that most islands you'll visit are devoid of human presence. Think about audio and Web conferencing tools: an audio or Web conference is "vacant" until one or more of the expected parties join in, and we consider that perfectly acceptable. But if this is your expectation, it may freak you out more than a little bit if you see an avatar fly by you unexpectedly or an unknown avatar suddenly materializes next to you and addresses you via the chat window.

• It matters if you are using it to socialize, explore, and interact with people. In fact it matters a lot. You will likely find that Second Life feels like an abandoned fantasy wasteland. Even when you visit islands put up by companies to communicate with customers, you'll usually find that no one is around. To get information you typically wander around a virtual hall reading posters and watching videos. One way to find and interact with other people in Second Life is to join business-related groups or attend events.
• It doesn't matter if you are using it for meetings and collaboration. Just meet your party in the designated spot in Second Life and do what you always do: introduce yourselves, talk, gesture, chat via IM. If the space you are meeting in supports upload and sharing of presentations and word processing documents, even better. Keep in mind, though, that support for office documents is a custom-created capability in Second Life today, unlike alternative virtual world technology like Qwaq Forum.

Elusiveness Of BI TEI

by Boris Evelson.

Why is BI TEI (Total Economic Impact) so elusive? Recently I reached out to all major BI software vendors and asked them to provide a customer reference who's willing to stand up and confirm a hard $ return on investment from BI implementation. Guess how many takers I got? None. Yes many are willing to point to expected savings and benefits, but no one's gone back and calculated the actual results. Why? It is definitely very complex. For example:

Costs

• Make sure you account for both direct and indirect costs.
• Direct costs are the obvious expenses and capital expenditures associated with BI software, hardware and consulting services. A good rule of thumb is to expect to pay $5-$7 dollars for system integration and management consulting for every $1 you pay for software. And don't forget to include the costs of training and on-going support.
• Indirect costs are for software/hardware/services for non-BI specific components which are nevertheless necessary to achieve a successful BI implementation: data quality, master data management, metadata implementation, portals, collaboration, knowledge management and many others. The indirect costs are not as easy to quantify. For example, do you attribute the cost of implementing a data quality solution to the BI initiative? Most likely your data quality problems exist in your sources, so one might think it should be a separate effort. However, very often you identify data quality problems when you build your first BI solution, so there may be a tendency to bundle in these costs into the BI project. As a result, these indirect costs are notoriously difficult to identify and negotiate (with other stakeholders), but nevertheless they are a major component of the total cost.

Benefits

• Cost savings are typically very difficult to realize. Since it's pretty impossible to become 100% more efficient even with the best BI tool, one can typically realize only 20%-30% efficiency gain with a better BI tool, better BI architecture. Since you can't lay off 20% of an employee, the savings are not that clear.
• Increased and/or new revenues. Additional revenues can come from increased effectiveness (higher response rates on a marketing campaign, for example) or new revenues from newly discovered opportunities (a more effective customer segmentation, for example, may uncover a new, previously unaddressed customer segment). I know of no scientific method, however, to predict the outcome ahead of time and therefore get a sense of new/additional revenue streams before the project. One can only do that by comparing new, BI enabled, initiatives to the old ones.
• Risk avoidance. Better information, insight and improved decision making always translate to potentially lower risks. Again, it's very hard to predict — one would need to compare typical loss due to operational (or credit or market) events before and after implementing a BI environment.
• Non financial benefits are hard to figure into the ROI calculation, but they are typically major drivers behind BI projects. These may include increased employee and customer satisfaction, better competitive awareness of the market, and many others.

So, I am throwing a challenge out there. Show me a bottom line, proven, documented $ BI TEI and we'll publish it!