Intersection of MDM, CRM and ERP

My earlier article on Why Product Information Management in Information Management magazine prompted Andrew White of Gartner to write a short blog article.

Andrew picked up on my comment “If CRM and ERP platforms were better able to manage master data, perhaps we wouldn’t need MDM solutions.” He goes on to say that “these applications were designed in an era when there was no need to take account of information requirements ACROSS the enterprise.”

The operating assumption for most CRM and ERP platforms, unfortunately, was that you were going to run your ENTIRE business on them.  This rarely, if ever, turns out to be the case, particularly if the business does a lot of acquisitions. One business unit or geography certainly. And the count may grow over time. But there are always going to be areas of the business “outside the pale” – not included in that particular CRM or ERP solution’s purview. This leads to silos of data, which create many problems in the management and analysis of information in the enterprise.

That’s why an MDM hub makes so much sense. It provides a neutral place for customer, product and other master data from all over the enterprise to be created, read, updated and managed. Increasingly, today’s CRM and ERP applications are being used in concert with a robust MDM hub. Even now, CRM and ERP products just aren’t designed to manage master data effectively. They don’t have the built-in data quality and data governance processes that are needed to ensure a single view of accurate, complete, timely and consistent master data across the enterprise.

You can read the article by Andrew White of Gartner Research at http://blogs.gartner.com/andrew_white/2010/06/07/good-summary-of-mdm-of-product-data-and-its-value-to-the-business/.

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9 Comments on “Intersection of MDM, CRM and ERP”

  1. tboehm30 06/10/2010 at 9:34 am #

    About your statement:
    ” They don’t have the built-in data quality and data governance processes that are needed to ensure a single view of accurate, complete, timely and consistent master data across the enterprise.”

    I think that the important item is consistent. In my experience, companies need another silo just to manage the MDM data. Otherwise you get records for John, Jon, Johnathon, Jonathon, and Janothan, but they were all the same guy.

  2. Dan Power 06/10/2010 at 11:08 am #

    Good point. Usually, that type of capability is either built into the MDM hub itself, or into the data quality product that is tightly integrated into the MDM hub. So all incoming data, whether entered into the hub directly by an end user or interfaced into the hub from an outside system by a batch process or web service, should go through a cleansing process to standardize the name (as much as possible).

    If Johnathon, Jonathon, and Janothan can all be standardized to Jonathon, that’s great. If not, it would trigger a workflow to a data steward’s queue, and that person would have to decide if it’s really the same person or not.

    Thanks for commenting here – we’re always looking for more engagement from our readers.

  3. garnieb 06/10/2010 at 3:19 pm #

    Dan, so well put, great stuff.

    MDM from a business point of view, gives you agility, and flexibility. How many times that the Mergers and Acquisitions caused havoc in a business. Or that the business model changes or you have to bend your systems to match your ever fast paced business…

    Allowing Master Data Management to take on the brunt of your changes, allows a company to quickly go with the flow. Now there are things we have to do, but for the most part, we know in most Commercial Off The Shelf solutions can change a data model in MDM and have it available to the enterprise faster than a CRM or ERP.

    How many changes in the data model have we seen in the PIM world when it comes to commodities ? Foods or even Materials ? Not to mention the change of standards in the Supply Chain or Exchanges.

    Oh, what about those domains that are not conventional ? outside the traditional PIM / CDI flavor ? lets see ERP or CRM tackle those 😉

    You bring the light the importance of MDM in the enterprise. I am glad to see it finally become mainstream. MDM is now a serious player in an enterprise, and rightfully so.

    Keep it up Dan, glad I am reading many of your posts, and that you are being recognized for your insight.

  4. Dan Power 06/10/2010 at 4:01 pm #

    Garnie, I don’t know what to say – thank you for the kind words. I think MDM does bring increased agility and flexibility to the business. M&A and business model changes can be handled much more easily in an MDM hub than by most CRM and ERP systems. I think we’re seeing the cross-over from the “early adopter” phase to “mainstream” phase of the MDM market, and it’s pretty exciting for those of us who’ve been doing MDM for a while to see …

    Thanks for reading and commenting – always appreciated!

  5. Carl 06/14/2010 at 1:06 am #

    Does Initiate Systems’ master data management offering meet your qualifications for a MDM hub to tie all data together?

  6. Dan Power 06/14/2010 at 9:13 am #

    Thanks for your comment, Carl. I think it would, yes. Initiate themselves would be the first to tell you that their offering is more of a virtual hub, what Gartner has referred to as a “registry hub” where a lot of the data is (at least initially) left in the source system. But more than 95% of implementations end up being so-called hybrids, where a great deal of the source system data ends up migrating into the hub over time.

    So yes, I’d be comfortable including Initiate in the list of MDM hubs that can tie all master data together.

Trackbacks/Pingbacks

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