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Economic woes will drive need for MDM

by Andrew White  |  October 9, 2008  |  1 Comment

My computer dashboard sent me a link to a note on Bloomberg today, entitled,U.S. Wholesale Stockpiles Rise More Than Forecast”.  The article provided some chilling data that suggests that wholesale inventories across the U.S. were ‘stacking up’ far more than expected in August.  The main reason is that retail demand is falling (as a result of slower consumer spending).  The knock on result will be that wholesalers will have to cut back their spending, and this will hit manufacturers.  This is bad news for folks who sell stuff: there will be less demand.


Reading the article reminded me of a related TV clip I caught last evening on CNBC’s Fast Money.  Dennis Gartman was reporting in a piece called, “Is the Bottom Near?”  The key take away for me concerned the short to medium impact of the recently approved $700bn “bail out” of the US financial system.  The bail-out will create one of the nations largest injections of cash into the economy.  Gartman was exploring if this $700bn would create inflation overall, or disinflation.  The increase in money supply will create inflation (too much money chasing the same set of commodities pushes up nominal prices) but at the same time, the acquisition by the state of re-priced (lower) distressed assets will create a huge drop in prices – in a disinflationary manner.  Bottom line, input costs for much of the economy will be going up.  This is bad news for folks who procure stuff.


These two data points led me to think about how users are applying MDM as a means to help their firms cope with these issues.  This is how I would summarize their efforts:


Users on the sell-side of the business are looking to MDM to help address business needs to:

  • Improve customer service or preserve of established customer base (through lower cost to serve, or enhanced/competitive processes) 
  • Improve (make more efficient, more integrated) customer interaction activities across multi-channels
  • Protect revenue, and grow (up-sell, cross-sell) where you can
  • Increase business agility through more rapid application development and deployment to support increased competitive actions

Users on the operations side and buy-side of the business are looking to MDM to help address need to:

  • Increase business efficiency (lower costs) in how it operates through simplified (fewer) and cleaner (increased data quality) integration practices
  • Improve leverage over assets and suppliers through single view of supplier, material, to support spend analysis
  • Be smarter with decision making and resource allocation processes across the business

Of course MDM is not a silver bullet; in fact it will rarely be on the short list of technologies when the above objectives are address by the business.  MDM will not achieve any of these benefits alone.  However, MDM, or some discipline that looks and smells like MDM, will be required if business and IT initiatives are to help the business achieve these objectives at a cost that the business and IT can absorb.


Tags: economy  procurement-oriented-mdm  

Andrew White
Research VP
8 years at Gartner
22 years IT industry

Andrew White is a Distinguished Analyst and VP. His roles include Chief of Research and Content Lead for Data and Analytics. His main research focus is data and analytics strategy, platforms, and governance. Read Full Bio

Thoughts on Economic woes will drive need for MDM

  1. […] wrote a short time ago about how MDM can help firms cope with the current economic down-turn.  Specifically, I talked about how MDM can help reduce business costs (lower inventory levels, and […]

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