Andrew White

I was on a briefing the other day with a small software vendor talking about governance.  We were exploring and contrasting experiences with how users look at “governance”.  A couple of my favorite angles included:

• Business users tend, if you are luck, to accept that they “own” process, but few accept that they do, or should, own data.  Conclusion – get over it, and start talking of “stewardship” instead
• When someone talks of “governance”, without any context, its tantamount to talking about fools gold.  Conclusion – governance, out of context, is dangerous; add context in order to make it meaningful
• “Governance of data/information” needs to start, or be applied first, with a focus on data/information that is meaningful to the business: Conclusion – start a governance focus on “enterprise information” (that is, stuff that’s important like master data or reference data).

One question that came up from the vendor was this: does a focus on data quality (DQ) confuse, or complicate, a message related to data governance (DG)?  It turns out that the vendor perceives a risk that users will think that a message/offering oriented around “data quality” might get confused (i.e. might compete) with something oriented around “data governance”. 

Clearly there is a potential for this.  Even in our research, “data quality” at an holistic level, implies a broad view of the quality, integrity, and consistency of data and/or process etc.  So at one level, there is overlap.  However, the reality is that most users do NOT take that holistic view; they equate “DQ” with a technology that is applied to a problem at a point in time.  Few use the term DQ to equate to a living, breading process that manages, or ‘governs’, the process or data. 

Bottom line – DQ and DG are different, but related.  The vendor does run a minor risk (in my view) but I think it’s a slight one.  For sure, there are lots of “DQ” messages and offerings on the market today; and there will be a lot more related to DG soon.  I’d go with a focus on DG and message how DQ technology supports DG.

Talend, a vendor focused on providing open source data integration, announced in a press release today, “Introduces Rapid, Flexible, Open Source Master Data Management Solution.”  The press release includes the enticing phrase, ‘With the launch, Talend is democratizing the MDM market”.  Sounds too good to be true.  And if it does, it very probably is. 

At the bottom of the email you can find the following: “Talend MDM is available immediately and exists in two editions. Talend MDM Community Edition is provided under the GPL license and can be downloaded at no charge from http://www.talend.com/download.php. Talend MDM Enterprise Edition is provided under a subscription license.”

I have seen open source technology first hand.  When I worked at a software vendor I was exposed to the vagaries associated with embedding someone else’s source code into what was then offered as traditional enterprise software.  As an analyst covering the Supply Chain Management market I watched as vendors short circuited their R&D efforts by embedding open source tools within the scope of their overall, much larger enterprise applications.  In neither case did open source democratize the markets into which the open source was injected.  But would an entire application market be significantly impacted if it was available, in its entirety, as open source?

When last I looked at the open source edition I noted that the technology had strict limitations over what could be achieved.  In fact, based on the hundreds of programs I have seen in the last couple of years, I don’t think many could be supported by this offering as it is, out of the box (so to speak). So I do not think that this open source MDM tool will democratize the MDM market, yet.

There are three outcomes from this move:

1. users are more likely to dabble in the basics of MDM by playing with this solution
2. some subset of those users will engage with Talend proper, and license the legitimate application (and this would compare/compete with other MDM offerings)
3. some third party vendors, software or services, might take the Talend open source MDM engine and build “on top” of it a more feature rich MDM solution (like the vendor examples I shared above).

As with 3) above, Sun had put into the open source domain an MDM core, nearly 2 years ago.  It was called Mural and we know that some system integrators had dabbled with it, with a view to offering a “real” MDM solution.  I don’t know of any end-user organization that build their MDM program on Mural.

Lastly, given that no two MDM programs are ever alike, the challenges facing this new market entrant will be significant.  Hence short term I do not see this announcement as democratizing the MDM market; long term I do expect that this will have an impact.  Let’s see what the first 20 end-users of this solution say…

Though the markets don’t like it, President Obama made a good move today, in my view, with a plan to limit the exposure of our money to risks banks take.  The Glass-Steagell act was put in place in 1933 to help protect depositor money from being used by banks in highly risky market-based activities.  The repeal of this act, under President Clinton’s watch, is one of the legs of the stool that created the perfect storm for the economic crisis we now face.  I just read, “A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers, and here is an extract of my book review:

Much of the book explains a lot of history of Lehman, particularly with respect to how the seeds of our current financial crises, were laid.  There were three main causes: The repeal of the Glass-Steagall act in 1999 allowed banks to risk yours and my deposited funds in the stock market; post 9/11 the Federal Reserve maintained inordinate low interest rates, for a long, long time, in order to keep the economy going; encouragement (during the Clinton administration) of Fannie Mae and Freddie Mac (and Indy Mac) meant that less than qualified folks were brought into the property market.  This led to a perfect storm: Cheap money, sloshing around the place, feeding an insatiable growth in demand for property, by people that had little or no ability to support the creative mortgages on offer, managed by creative new financial instruments that spread risk around the globe. 

Obama’s actions are a painful step in the right direction.  I suspect the market will improve tomorrow (all other things being equal), but overall this is a good move for the infrastructure that supports our US economy.

Tomorrow: Data Quality does not equal Data Governance (can’t wait).

Information Management ran another story on one of my favorite overall “themes” – that there will emerge a semantic enterprise.  In, “The Semantic Web: A Perfect Complement to Master Data Management”, January 11^th, J. Brooker Aker calls out what, to me, is pretty obvious:

“…[T]he semantic Web offers quick and precise data analysis for enterprise users to manage and discover relationships among master data based on semantic modeling and reasoning.”

Where this topic get’s a little fuzzy would be with things like:

“Implementation-wise, semantic Web technologies allow IT managers to integrate master data without needing to understand the data model or writing complex SQL statements.”

I’d like to know how an enterprise oriented IT manager can work with enterprise information and not need to “understand the data model”.  However, Aker has the right idea I think.

Two stories in the Financial Times (US print edition, January 4^th) suggest that the impacts of the current recession will continue long in to our future – there will be no quick return to “as it was”.   

The majority of news these days focuses on the demand side of the financial crises; that is, how will specifically the American consumer get back to their previous levels of demand such that the US economy will recovery.  I will ignore the issue that governing spending is not as efficient as consumer/business spending, but the key point is that this is all “demand side” based.  The two articles below refer to core supply side issues that are not yet address, and will act as long term drag to any potential recovery.  One article looks at the auto-industry, one ship-building.

• Yard face closure as orders collapse; 28.8m deadweight tonnes of ships were ordered in 2009; in 2007 this level was at 272m.  There seems to be a huge pending over capacity for shipping and shipbuilding.  I have noted this some time ago, and this has been written up in many places over the last couple of years. 
• Wheels of Fortune; “In Europe, extraordinarily, not one plant has closed”.  Even before 2 of Detroit’s, “big three” went belly up the industry press was talking of global over capacity; now it seems the European industry has missed the opportunity of a big crisis.

Bottom line: continues economic gloom will persist in many industries since structure changes are not being made (or being allowed to take place naturally).

Oracle announced it acquired Silver Creek Systems, a small, independent, product data quality vendor.  Many organizations that buy, make, convert, or sell products (both virtual and physical) have uniquely complex data quality issues.  Silver Creek Systems had focused on this problem area.  Oracle decided – at long last – to take Silver Creek off the market and to fill in this gap in their product strategy.  It was a gap that had been festering for some time, made more acute with its growing MDM strategy.  The two vendors had been partnering for a while, and this acquisition makes perfect sense.  Watch out all the other MDM vendors that want to access to strong product data quality capabilities – and look to all the other DQ vendors that can spell, “product data quality”: they will be a tad more popular today.

The Financial Times ran a report yesterday (January 4^th) in its USA print edition that highlights how Wal-Mart, the world’s largest retailer, is planning to save money by focusing again on its famous supply chain.  This time, consolidated spend is the focus for ever greater leverage over smaller numbers of suppliers; and the removal of so called, “value add” middle men that operate between the buyer, and the sellers.  

Bottom line: Wal-Mart will be simplifying its supply chain (removing layers, and non-value-add assets) and also standardizing and rationalizing core processes.  The organization will have to focus on achieving, and sustaining, “single view” of supplier and product data.  MDM will be powering these cleaner, simpler business processes.

One of the many highlights for me, during the festive season, is the hope that I get to read more than normal.  This last season did not disappoint.  I managed to read the bumper double-edition Economist, as well as a book.  Of course, the bad news is that my “in bound” book supply increased far in excess of my “reading supply” due to the fabulous presents I received.  So I will have to go to bed 30 minutes earlier every day just to try to catch up.

BBC’s History Magazine (August 2009 print edition) sported an article that explored the background behind Quebec’s independence movement.  More importantly, this was followed up in the September 2009 print edition with an article, “How the West Was Won”, that explored (once again) the famous battle for Quebec wherein Britain defeated France that set the stage for British hegemony in the Americas.  I can’t find any content on the web to share – so unless you subscribe you don’t get to see any of the excellent material.

The Financial Times ran a series of articles on the last 10 years.  The second article, Era of confidence ends in trepidation, was pretty neat in that it included some charts looking at the S&P over the decade.  The print edition (same page) included an article that reminded us all (as if we didn’t need to be reminded) about the burgeoning aging population and its likely drain on the global economy.

And my favorite Economist articles over the Xmas period (print edition, December 19^th to January 1^st) included:

• Arguing to death: Excellent inward looking analysis of “argument in conversation” in America.  I remember when I was a youth, and I would argue the case for some belief, with my best friends, purely to test my understanding of an idea, and to explore and learn about it and counter arguments.  After the hot air had been expanded, we drank beer and parted (again) best friends.  Today, most conversation is more a social battle to get one argument heard over another; as if we “lose” if we don’t convert the room to our belief.  We seem to have lost the art of conversation. 
• Hi There: Have you noticed how we greet each other?  Have you observed how, with the increase in email and now “sent from PDA”, our ability and desire to address each other has become boringly neutral?  This article looks at how social niceties have changed, and generally “watered down”.  I read this, and changed my email footer (this morning).
• Gordon Rex: Humorous look at the fall of Gordon Brown (current British Prime Minister that has to call a General Election by June 2010 and likely to lose to the Conservative party).

And my top pick – From memory to history.  I was voluntarily sitting in a garage waiting room for my car to be serviced (akin to self abuse) and I explored this touching article, that resulted in a deep sigh and lots of long looks out of the window across the wind-swepped, wet landscape.  The article reported that with the death of two gentlemen (Harry Patch, 111, and Henry Allingham, 113) the last memories of fighting on the front in the First World War have gone.  I remember fondly my own grandfather and his exploits at the Somme, one of the bloodiest battles of the war.  It is a shame that so few people know, or understand, or even care, about what is leaving us.  Anyone who suggests that we run the risk of repeating our mistakes since we care not to remember our past are ridiculed; as is anyone with an opinion lest we upset someone who does not share it – but that’s another story.  If you take the time to read this article you will no doubt take a moment to pause, during a usually busy day, and remember those that came before us, that gave the ultimate price that we may be here to think.  And for many of us, the “ultimate” sacrifice will be the loss of an episode of a favorite TV program, or a missed meal.  It is funny how things change.

There are at least three sets of requirements that exist across two use cases for MDM that, despite showing similarities, might derail how MDM is evolving.  In operational MDM users evaluate the impact on sales regions and territories of product and service sales and performance.  This “hierarchy” data links customers to locations and regions, and organizations and used by sales and marketing users.  Also, a different “hierarchy” set of data is used by sales, marketing, and product managers to evaluate the same data but in terms of products, categories, and brands.  In the analytical MDM use case financial users use similar data but often times for forward looking, “what if” analysis.  Also these users do evaluations of financial statements – what happens if this acquisition is executed and two businesses are merged> 

In both use cases, the need to provide business users with analytics and analysis on master data, or on evaluations of changes to that master data, is common.  The market (i.e. vendors) addressing the needs of users across both use cases have so far brought to market solutions that tightly embed business analytics, and analysis capability, with (master) data management capabilities.  This tight coupling is reflective of how business applications have evolved over the last 20 years; and it is for this reason that this ongoing development is dangerous to long term success of MDM.

The issue is that MDM is not a business application per se, but it requires a business application that is used to operationalize and support the MDM process.  These MDM processes support numerous business processes, actions and initiatives.  MDM has come about because IT realized that these services need to be independent of business processes and applications – and it is this separation of the master data from the application that crated/needs it that makes MDM work.  We are coming from an era where data and application were designed, built and deployed together, to a new era based on layers of services.  

When Analytics IN MDM is NOT Needed

The tight embedding of business user oriented “what if” capability that models changes in master data, in a business context (as opposed to a purely MDM context) is dangerous to MDM.  This “requirement” has caused vendors to develop business application functionality ‘on top’ of MDM solutions.  This is what we need to get away from!

If we keep designing and developing business application functionality on the actual MDM solutions we will perpetuate the architecture of the last 20 years. And it is this architecture of the last 20 years that has caused the problem that MDM was conceived of to resolve.  The “what if” capability is needed by business users, but it should be designed and built as business applications that consume master data via services, such that the MDM processes can operate as they were meant to – independent of all consuming systems.

When Analytics ON Master Data is Needed

This is not to say that analytics on master data, as part of the MDM discipline, is not needed.  This is a very different statement.  There is a great need for applying analytics and metrics within the context of MDM.  This is what supports the active governance of the process, to ensure that MDM is doing what it is supposed to be doing.  However, most vendors are pretty poor at this.  Most address metrics as if it was the output from a batch routine for loading or processing data.  Most vendors do this because this is how most data quality has been executed in the past.  This is a start, but this is not enough (see next blow).

How has this Risk to MDM Evolved?

Ever since MDM got started there have been times when users have pushed vendors to develop their technology to the point where MDM becomes a lot like a business application – one that does not actually do only what MDM is supposed to do.  In the MDM of Customer Data domain, several early MDM vendors were asked to develop marketing analytics that describe conditions and status of customer interactions and relationships.  In the MDM of Product data domain, several early MDM vendors were asked by their customers to develop workflow engines that supported the creation of product data in one place, rather than across the myriad systems that were used before hand. 

More recently, as the collective view of MDM evolved, and “analytical MDM” as a distinct use case emerged, it was clear that this pattern was repeated in other areas.  In the example given at the start of this blog, financial systems merged “what if” analysis of pending changes to hierarchies (master data) that might signal a change in how corporate reports roll up the transactional data.

The generalized observation is this: as soon as you put into the hands of the business user good, clean, validated master data, they start to ask really good questions that business applications vendors and designers have been trying to answer for years – and were generally unable since the source of the master data needed was outside the purview of those same business applications.

Now there is risk in “doing what customers ask”.  Some authors have said, “your customers are the last place to look for vision” since they are highly motivated NOT to undermine the investment they just made in your technology.  As such, customers should NOT be listened too for ideas for step-change innovation; only for incremental improvements.  So are these examples, of customers driving MDM to be more “business application-like” examples of step-change innovation of where MDM should evolve too?  Or are they short term, erratic, incremental developments?   I think the latter – and a very dangerous latter too.  What do you think?  Care to disagree?  Why?

In “Mortgage Repayments – Time to Hold”, December 5^th print edition, the Economist warns that, “The latest foreclosures are no longer the result of loans that were unaffordable from the outset or payments rising from resets. Rather, they are a product of negative equity and rising unemployment.”  Not good news. 

The article explores the lack of success that has so far been achieved with the US governments attempt at encouraging the re-setting of mortgages that are “at risk” with a view to reducing the risk that mortgage defaults occur, and owners “walk away” or get turned out.  Seems like a large proportion of those that get modified default a little time later.  I guess its because they lose their job and don’t get another one.

If we are not too careful we will fall into a trop.  The more the economy looks “at risk” and a section of the economy less able to help themselves, the US government may consider more direct assistance.  Any direct assistance increased the government debt and reduces the likelihood the economy ever recovers.  Private sector get’s crowded out, and organic demand falters again.  And so the cycle will repeat itself.  No country has ever sustained, over the long term, a government led “recovery” in demand.   Look at the recent downgrade on Greek’s bonds.  The US, and some other western nations, is only a short distance from such “lack” of market support…  Any need to push up treasury rates in order to sustain market demand would push the economy back down again.  Than again, the counter balancing force is, “which other country has treasury or bonds that are more stable?”