Bank Systems & Technology

Gartner Projects MDM Software Revenue to Grow 14%

Bank Systems & Technology magazine had a good article by Penny Crosman today.

Gartner Research is predicting 14% growth over 2009 levels for master data management (MDM) software license revenues, to $1.5 billion.

Business drivers for adoption range from delivering revenue, service, agility and risk management improvement, cost reduction and integration simplification. John Radcliffe, a research vice president at Gartner, said “Today, most organizations juggle multiple sets of business and data applications across corporate, regional and local systems. At the same time, customers are demanding faster and more complex responses from organizations, leading to an inconsistency that hinders the organization’s ability to measure and move within the market. With MDM, CIOs can create a unified view of existing data, leading to greater enterprise agility, simplified integration and, ultimately, improved profitability.”

Some interesting predictions were included in the Bank Systems & Technology article:

  • From 2009 through 2014, MDM software markets will grow at a compound annual growth rate of 18%, from $1.3 billion to $2.9 billion.
  • Gartner foresees a larger, more unified MDM software market reaching nearly $3 billion by 2014.
  • By 2015, 10 percent of packaged MDM implementations will be delivered as software as a service in the public cloud (MDM today is typically implemented on-premises)
  • Through 2015, 66 percent of organizations that initiate an MDM program will struggle to demonstrate the business value of MDM.

This is not because MDM can’t show sufficient business value. The Bank Systems & Technology article goes on to say “If IT departments initiate an MDM initiative, they often struggle to get the business on board and to demonstrate the business value of MDM, particularly if there are no business-process-oriented metrics and financial quantifications to define and measure success, Gartner analysts say.” (emphasis added)

At Hub Designs, like many other MDM practitioners, we’ve been saying for quite a while that the business needs to own the MDM initiative.  This isn’t always a popular stance, particularly when the people bringing you into a particular client company are the IT people.  But it’s the truth – if the business doesn’t own it, the business won’t feel ownership.

The article goes on to say “MDM needs to align with the business vision and strategy, and will require executive business sponsorship, strong involvement of business stakeholders and change management.”

“It’s not just an IT project. The business needs to take responsibility and be accountable for master data governance and stewardship,” says Radcliffe.

“Unless organizations take a holistic, business-driven approach to MDM, addressing governance and metrics requirements in particular, they risk having their MDM programs fail,” he says. “Internal politics won’t be brought under control without a governance framework, and without a metrics structure, there will be no way of objectively defining what success looks like and measuring whether or not it has been achieved.”

We couldn’t agree more. In our “Ten Best Practices” series this October, we specifically discussed that topic in Master Data Management Best Practice #10 – Use a Balanced, Holistic Approach, saying “This may be the most important best practice of all: use a balanced, holistic approach – addressing people, process, technology and information. Start with the people, politics and culture, and then move on to the data governance and stewardship processes, then the technology.”

The MDM initiatives that companies are taking on right now aren’t “too big to fail”, but they are too important to fail.

As a long-time MDM evangelist, who is used to describing MDM and data governance in such a way that people get excited about the change it can make for their companies, I think we need the types of economic and technological changes described in Penny Crosman’s article. Too many companies are lurching into the 21st century with the baggage of a late 90’s technology infrastructure holding them back. Faster, better decision-making, increased revenue and reduced costs, easier compliance and risk management, improved business and IT agility – these are things that aren’t going to come easily but they are worth it, and MDM and data governance are a big part of the answer for a lot of companies.

So hats off to Penny Crosman and her article in Bank Systems & Technology, and to John Radcliffe and Andrew White at Gartner Research for all the good work that they do.

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