Russia: MDM Perspectives 2012, by Dmitry Kovalchuk

About Russia

Russia is the ninth largest country by population, with 143 million people.

The Russian economy is the world’s sixth largest by nominal GDP, with the 3rd largest nominal military budget. Russia is one of the world’s fastest growing major economies, and has a heavy dependence on raw materials (oil/gas) for its economy.

Russian MDM Market History

The MDM market started growing in Russia on the heels of major ERP implementations in the early 2000’s.

The first MDM implementations were in the oil and gas industry, followed by the mining and engineering industries. Initially, MDM implementations were Product MDM, used for purchased materials in procurement planning and economic logistics.

MDM was not used for tangible products since the oil and gas industry doesn’t deal in them per se. Customer MDM implementations were not common because customer master data was typically stored in the Enterprise Data Warehouse (EDW).

Early MDM implementations were handled by small Russian software vendors. Their software didn’t have a lot of capabilities and data integration functions were poor. But the software did create a golden record through a centralized schema.

Everything changed when SAP NetWeaver was introduced in Russia.

Russian MDM Market Today

MDM Penetration by Vertical Industry, by Dmitry Kovalchuk

Chart by Dmitry Kovalchuk

MDM Penetration by Master Data Types, by Dmitry Kovalchuk

by Dmitry Kovalchuk

 The top Russian consulting companies offering MDM implementation services:

  1. IBS,
  2. LANIT,
  3. KROK,
  4. I-Teco,
  5. Energy Consulting,
  6. Intertech,
  7. EPAM Systems,

Intertech has the most MDM implementations. IBS has the largest MDM implementations (in Gazprom and Rosatom).

The largest MDM implementations:

  • Gazprom: Industry Database of Reference Information
  • Rosatom: Single Industry Control System of Reference Data

Gazprom and Rosatom are monopolistic in their economic sectors, so they call their MDM systems “Industry”. Rosatom and Gazprom’s MDM systems are based on SAP MDM.

The overall Russian MDM market does not have many MDM software products available to it right now.

Percentage of MDM product implementation, by Dmitry Kovalchuk

by Dmitry Kovalchuk

MDM Market barriers and other details

  • Low level of mature systems standardization via the Government.
  • Diverse languages and cultures cause barriers – Russia is very large and diverse which impedes standardization.
  • Small budgets available for the development of IT in engineering, healthcare and other industries – many Russian industries are trailing other countries in IT sophistication.
  • Low availability and low quality for technology education – affects the quality of professionals available.
  • Master data is called “normativno-spravochnaya informatsiya” which means “normative-reference information”.
  • Outdated knowledge about normative-reference information management in USSR.
  • Complex ‘supply chain’ for providers of MDM solutions.
  • High levels of business corruption.
  • Many IT professionals in Russia end up immigrating to foreign countries

Russian MDM Market Future

Currently, there is strong growth in interest in MDM implementations in the following sectors of the economy:

  • Government
  • Banking
  • Communications
  • Manufacturing

MDM implementations in these areas will be more than 50% of all MDM implementations in 2012-2014.

A second wave of MDM implementations is expected in companies already using lightweight MDM solutions from small suppliers. They will begin to implement more functional and more expensive MDM products.

Russian system integrators will begin to offer MDM implementations in CIS, the Middle East and East Asia. (CIS is the Commonwealth of Independent States – former SSRs of the Soviet Union.)

Russia’s admission to the WTO (World Trade Organization) will generate a number of MDM projects, but no one can predict as yet what they will be.

1C Company is working on an inexpensive MDM software product that will satisfy the needs of small and medium-sized businesses. (1C Company is a large independent software vendor in Russia, with a broad range of offerings from video games to business software.)

Additionally, there will be major projects for cataloging products in Russian industry sectors.

IBS Group will bring Informatica MDM to the Russian market – Informatica MDM has been in great demand for the Russian government and banking sector. (IBS Group is a large provider of IT services in Russia, including software development, business technology consulting, and MIS implementations.)

System integrators in the CIS countries, after acquiring MDM expertise, will be able to compete with Russian system integrators in Russia.

Smaller vendors are likely to enter the Russian MDM market as well.

Microsoft is working on an inexpensive MDM product based on Microsoft SQL Server Master Data Services that will compete with 1C and other vendors.

About the Author

With over ten years experience in MDM implementations and data governance, Dmitry Kolvalchuk has worked in multiple industries and organizations in Russia including United Metallurgical Company, Gazprom, and the Federal Treasury of Russia. Dmitry has worked for several years as an independent consultant, business analyst and architect, and has experience with solutions from SAP, Oracle, IBM and Informatica, as well as in-house systems. Dmitry is currently in the Ukraine as a MDM Team Leader in Citia Business & Technology Consulting, where he is building the first-ever MDM practice for Ukrainian organizations.

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