Blog: Colin White

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September 26, 2006

Is a Data Warehouse the Place to Start an MDM Project?

A lot has been written about master data management (MDM) over the last few months on the Business Intelligence Network. Although there are some differences of opinion about how to implement MDM, I think everyone agrees that MDM is associated with both business transaction and BI application processing. Given that many companies have master data managed by both types of application where is the best place to start an MDM project?

In the business transaction processing area most attempts at integrating master data have been based on custom built IT applications. The application package vendors are beginning to offer packaged solutions for MDM, but many of them are focused primarily on integrating master data from their various business transaction application packages. To be successful these packaged MDM solutions must also provide support for master data from legacy and third-party application packages.

The data warehousing area of IT has often done the best job in many companies in understanding, documenting, cleansing and integrating operational data. When discussing MDM and data warehousing, however, it is important to separate operational processing from BI processing. I would argue that using an operational data store or a data hub to consolidate and propagate business transaction data and master data is operational processing, not BI processing. Of course, the integrated master data system of record created by this processing is an ideal data source for BI processing applications and their underling data warehouses and data marts.

Some analysts and vendors are arguing that data from operational data stores, data warehouses and master data stores should be integrated into a single data warehousing environment. To me this is backward thinking and will cause even more operational processing to be brought into the BI environment. We should be looking for ways of reducing the operational work being done in the BI environment, not increasing it.

Master data processing needs to be separated from both the business transaction and BI environments and integrated into a single MDM system. This MDM system should be used to supply data to business transaction and BI applications, not the reverse. It will take time to move such an MDM environment, and meanwhile there are tactical MDM approaches that can leverage existing master data in both business transaction and BI applications. It not be forgotten, however, that in the longer term the objective is to separate and integrate master data into its own environment.

I will discuss this topic in more detail in my October newsletter article on the BI Network.

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September 13, 2006

New CIO Spending Survey

Ed Maguire kindly sent me a copy of the latest quarterly CIO spending survey from Merrill Lynch.

BI continues to be the top spending priority for CIOs. There was a slight drop from 38% to 36% of CIOs listing BI as a top priority compared with the prior survey. ERP came second with 31% of respondents listing it as a top priority. Security was third with 29%, a drop of 10% from the previous study. Fourth were corporate portals, which saw a rapid growth to 25%. Document and content management came next with 24% of CIOs listing it as a top priority. Analytic applications filled the number 11 slot, growing from 8% to 19%. It was interesting to note that SOA/Web services dropped from 16% to 8%.

For analytical application spending, the top four vendors were Microsoft, Cognos, Hyperion and Business Objects, respectively. Microsoft also came out top for middleware, database, application package and content management spending.

For SOA and Web services projects many CIOs saw a trend toward their increasing use in 2007. Top three projects for this technology were integration, portals and BI, respectively. Microsoft again was the clear choice as the SOA vendor.

For more details about the report please contact Merrill Lynch.

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