The need for master data management (MDM) may date back to around 2000 B.C. when a Sumerian accountant used the wrong cuneiform pictogram to record a big sale to an otherwise regular, loyal customer. Upon inspecting the clay tablets later that day, his merchant employer, believing he had attracted a new, deep-pocketed customer, proceeded to order twice as much inventory as he needed.
If our Sumerian merchant had had an easy way to keep all of his customer information in a single place where it could be corrected, compared, and analyzed, he might have recognized and avoided his error.
Even 4000 years later, many enterprises are just beginning to deploy MDM tools that can be used to organize and correct data and help manufacturers catch such mistakes. Although MDM tools have been around for several years, interest among manufacturers has just recently begun to spike. In a survey released in June, Ventana Research found that 49% of all respondents said they have an MDM project planned or under investigation, while 27% have an MDM initiative already under way. Citing the need to improve the management of multiple data entities — with customer, product, and financial data identified as top priorities — more than two out of three companies surveyed stated that a centralized hub is the technical component most critical to their overall MDM strategy.
What's driving the interest in MDM? First, users have begun to grow disappointed with the ability of systems such as customer relationship management (CRM) to keep up with ever-growing data and ever-changing definitions and attributes. Second, passage of the Sarbanes-Oxley Act eliminated the defense of "bad data" in cases of shareowner liability. Under threat of jail, CEOs became legally responsible for the accuracy of all company data, so they're looking for a way to manage data from different sources. And third, sophisticated service-oriented architecture (SOA) tools have begun to emerge that make MDM systems easier to implement.