MDM Institute: Why is Reference data mission critical now?

Why is Reference Data “Mission Critical” Now?

Aaron Zornes Chief Research Officer The MDM Institute Conrad Chuang Director Product Marketing Orchestra Networks

We help organizations manage their most important data

Reference Data

Thin

gs Parties

Relationships

Master & Reference Data

Support over the entire life cycle of your master & reference data

Measure Integrate Manage Control Design Define

Business Glossary

Data and workflow modeling

Data quality and validation

Workflow -driven data & hierarchy

management

Integration and

distribution

DQ KPIs and

dashboards

+ Full version control on models and data + Fine-grained role-based security

Orchestra Networks has wide array of customers

Agenda

n  Why is RDM mission critical today?

n  How does RDM differ from (how is it similar to) MDM?

n  What are the top business drivers for RDM?

n  What are the “top 10” technical evaluation criteria?

n  Where are most organizations focusing their RDM efforts?

n  Q&A

© 2014 The MDM Institute The-MDM-Institute.com

What is Reference Data?

Reference data =“coded, semantically stable, relatively static data sets shared by multiple constituencies”

(people, systems, & other master data domains)

Customers

Product

Industry

Sales Person

Geo

Cost / Revenue

Acct

Business Unit ID

In the logical view, private & public forms of reference data connect domains & application; consistent values

(& semantics) required for multi-domain views & hierarchies © 2014 The MDM Institute The-MDM-Institute.com

n  Errors in reference data will ripple outwards affecting quality of master data in each domain, which in turn affects quality in all dependent transactional systems

n  RDM needed in both operational & analytical MDM use cases where capability often used to provide attributes, hierarchies & KPIs

Why Reference Data? Why Now?

Central role of reference data means RDM becoming “starting point” for many organizations planning MDM & DG

Systemic Failure

Inconsistent Reporting

Transaction Failure

Regulatory Non-compliance


Social Data

TXN Data

Master Data

Enterprise data relies upon clean & consistent reference data.

Reference Data


Many analyst inquiries cite poor reference data a leading cause of errors in the organization

Reference Data Categories Multi-Domain

RDM Use Cases Real-Time / Transactional

RDM Use Cases

Public (External)

Countries & Subdivisions (FIPS10) Currencies (ISO 4217) Time Zones (ISO 8601)

Industry Classification (NAICS, ISIC) Security Prices

SWIFT BIC Codes (Payments) ICD-9/10 Codes (Healthcare)

ACORD/ISO Codes (Insurance)

Private (Internal)

Legal Entities Chart of Accounts

Organizations Employees

(i.e., much of HR & Finance Data)

Reference data required for transaction processing

Semi-Private? (Shared)

Customized Public Reference Standards (e.g. customized D&B)

Shared Private Data (Finance)


RDM programs need to support multiple domains (kinds) of reference data to avoid RDM silos.

FIRST POLL


Multi-Domain MDM

Multidomain RDM

Vendor RDM Approach Indicates Level of Multi-Domain Ability

Customers

Product

RDM

RDM

Two main approaches to RDM = Synchronization-driven (buy lots of ETL) vs. Multidomain (buy commercial RDM).

Synchronization-driven requires $$$ for data integration & lacks semantic stability/governance of hub approach.

Suppliers

RDM

Synchronization-Centric

Private RD

RDM

ETL/DI

Private

Public

Customers

Product

Suppliers

RDM Hub or Multi-Domain MDM Implementation


Critique of Current Approaches for Multidomain Reference Data

RDM Solution Drawback Recommendation

Custom-built, manual solutions

Heavy TCO burden Avoid unless reference data demands are truly unique

Spreadsheets Difficult to govern, secure, version, & audit; no modeling, poor hierarchy management

Distribute data in spreadsheets; govern data in RDM solution

Repurpose hierarchy management solution (MSFT MDS, ORCL DRM)

Poor cross-domain support, no classification mapping, few enterprise integration options

Seek out multi-domain RDM solution with hierarchy management

Customize existing domain-specific MDM (Customer or Product)

Rudimentary data modeling, lifecycle mgmt capabilities, & governance features (esp. authoring & workflow)

Use multi-domain RDM solution to maintain connections & govern/update into CDI & PIM via data services

ERP / Enterprise Application

Limited governance, versioning, distribution; also reference data customized use in app may have limited appeal in other systems

Master in external platform. RDM can be used to govern baseline set, versions and adaptations

Real-time / industry-specific RDM

Premium priced R/T RDM solutions do not represent good economic sense

Leverage R/T RDM solutions for R/T use cases (trading, claims processing, payments)


“Top 10” RDM Technical Evaluation Criteria

1.  Administration of diverse reference data types 2.  Ability to map reference data 3.  Management of reference data sets 4.  Architecture/performance 5.  Hierarchy management over

reference data sets 6.  Connectivity/integration 7.  Import & export 8.  Versioning support 9.  Security & access control 10.  E2E lifecycle management

Coming to market are RDM solutions characterized by multiple, diverse levels of integration w/ market-dominant MDM hubs as well as repackagings of existing mid-market

MDM solutions – HOW TO EVALUATE? © 2014 The MDM Institute The-MDM-Institute.com

“Administration of Diverse Reference Data Types”

From R. Thompson,/Credit Suisse, “Multidomain Enterprise Reference Data,” 7th Annual MDM & Data Governance Summit New York 2013

Private Ref Data

Public Ref Data

RDM solution should support a wide mix of data structures from name:value pairs to hierarchies (see criteria #5)

RDM Top 10 Eval Criteria #1


FINANCE LOCATIONS

“Ability to Map Reference Data” – pt. 1 (cross-domain mapping)

Issuing Country (ISO3166)

Name ISO 4217 Code

USA US Dollar USD CHN Yuan Renminbi CNY JPN Japanese Yen JPY

Official Currency

ISO3166

USD ASM USD IOT USD ECU USD SLV USD GUM USD HTI USD MHL USD FSM USD MNP USD PLW USD PAN USD PRI USD TLS USD TCA USD USA USD VIR CNY CHN JPY JPN

ISO 3166 Code

Name

USA United States of America CHN People’s Republic of China JPN Japan ASM American Samoa IOT British India Ocean Terr. ECU Ecuador SLV El Salvador GUM Guam HTI Haiti MHL Marshall Islands FSM Micronesia MNP Northern Mariana Islands PLW Palau PAN Panama PRI Puerto Rico TLS East Timor TCA Turks and Caicos Islands VIR Virgin Islands

RDM solutions need to preserve values & mappings between reference data sets – both in

domain & across domains


LOC

ATI

ON

& F

INA

NC

E


2013 VERSION 2007 VERSION

“Ability to Map Reference Data” – pt. 2 (temporal referential integrity)

2013 NAICS

Description

311224 Soybean and Other Oilseed Processing

221114 Solar Electric Power Generation

221115 Wind Electric Power Generation

221116 Geothermal Electric Power Generation

221117 Biomass Electric Power Generation

221118 Other Electric Power Generation

2007 NAICS

Description

311222 Soybean Processing

311223 Other Oilseed Processing

221119 Other Electric Power Generation - solar electric power generation

RDM solution needs to maintain links between versions, creating a migration path between versions of reference data … “Crosswalks”

are important for understanding how something changed

MERGE

SPLIT



RACI Tasks User

R Update sales hierarchies Rogers

R Change industry classifications Romanova

A Approve hierarchies and effective dates Stark

A Approve industry classifications Banner

A Approve merge into effective dated

Fury

“Mgmt of Reference Data Sets” (Governance Workflows)


An RDM solution needs to support governance workflows … includes defining: responsible & accountable parties (including systems),

permissions & area of responsibility for each party (field, instance, container level), how parties interact/tasks & auditing/history…

Sequence of Interactions

Permissions

Responsibilities


“Hierarchy Management Over Reference Data Sets”

RDM solution should harness relationships between reference data sets & existing party or thing data to create hierarchies

SIC Codes

Customer & SIC Code Mapping

ICD-10 Codes

Active Ingredients & ICD-10 Mapping Active Ingredients & Product Mapping

Viewing customers by industry classification

Viewing drugs by Active Ingredient interactions & ICD-10 Codes



EMEA OPS DEU Cost Ctr

FRA Cost Ctr

APLA OPS

TUR Cost Ctr

JPN Cost Ctr

MEX Cost Ctr

NA OPS CAN Cost Ctr

USA Cost Ctr

“Versioning Support” (a.k.a. time travel)

EMEA OPS

TUR Cost Ctr

DEU Cost Ctr

FRA Cost Ctr

APLA OPS JPN Cost Ctr

MEX Cost Ctr

NA OPS CAN Cost Ctr

USA Cost Ctr

Cost Centers (As-Of 2013 Q2)

EMEA OPS DEU Cost Ctr

FRA Cost Ctr

AP OPS TUR Cost Ctr

JPN Cost Ctr

CALA OPS MEX Cost Ctr

NA OPS CAN Cost Ctr

USA Cost Ctr

RDM solution needs versioning & “as of” / effective dating to support recall of reference data values, relationships or hierarchies

(versioning has *major* implications for analytics/ BI!)

Cost Centers (Current)

Cost Centers (Effective 2013 Q1)



2014 RDM Market Survey Results (Overview)

Aaron Zornes Chief Research Officer

The MDM Institute [email protected]

www.linkedin.com/in/aaronzornes @azornes

+1 650.743.2278

SECOND POLL


Agenda

n  Survey methodology

n  Attitudes about RDM & current plans

n  Trending key features

n  Vendor rankings


Partial List of Survey Respondents

Amgen CIT Fireman’s Fund Insurance Sabre

ANZ Bank Citi Mortgage Grant Thornton Spectrum Health

Aspen Re Citibank Hellmann Worldwide Logistics

Standard Bank South Africa

Bank Audi Sal Citizens Financial Group IBM (CIO Office) State Farm Automobile Insurance

Bank of Montreal COLT Technology Services Insurance Commission of British Columbia TD Ameritrade

Barclays Credit Suisse Louis Dreyfus Commodities

The Bank of New York Mellon

Blue Cross Blue Shield Association Cummins Nippur Volvo AB

BPI France Dept of Homeland Security/CBP

NJ Office of Information Technology WellPoint

British American Tobacco DNB ASA OP-Pohjola Group World Vision Cargill Electronic Arts Royal Mail Group Yorkshire Building Society

Carolinas Healthcare Fidelity Investments Royal Melbourne Institute of Technology Zurich Insurance

© 2014 The MDM Institute The-MDM-Institute.com RDM is a key business initiative

in some of the world’s largest companies!

>50% of Respondents Plan to Invest in RDM Within 2 Years

MYTH: There’s no interest in RDM Attendees to summits have been requesting RDM sessions,

Megavendors (and more) have RDM products … and now most of the responding organizations are planning on investing in RDM?


<50% of Respondents = Financial Services Organizations

MYTH: RDM is only for financial services & finance departments Surveys & analyst inquiry load

show increasing interest across the board © 2014 The MDM Institute The-MDM-Institute.com

Accountability for Multi-Domain RDM Centers at the Enterprise Level

MYTH: RDM projects LOB-centric or departmental projects RDM is gaining enterprise level relevance

& are often directly coupled to business users © 2014 The MDM Institute The-MDM-Institute.com

Multi-Domain RDM Projects Have Enterprise-Appropriate Budgets

MYTH: RDM is small scale, small investment Multi-phase RDM programs are in multi-million USD range … Wide range in investment levels reflect where respondents are in RDM

journey © 2014 The MDM Institute The-MDM-Institute.com

Interest in RDM to Support Transactional & Operational Enterprise Applications

MYTH: RDM is an isolated program Considerable interest in integrating enterprise applications with RDM

… Analyst inquiry load shows interest in tying analytical enterprise applications (BI/Big Data) to RDM


Interest in RDM to Support Traditional CDI, PIM & Other MDM Programs

MYTH: RDM is an isolated program, Part II Considerable interest in RDM to support traditional MDM initiatives in Customer & Product (Why maintain country codes everywhere?)


Categories of Data Managed by RDM Multi-Domain

RDM Use Cases Real-Time / Transactional

RDM Use Cases

Public (External)

Private (Internal)

Semi-Private (Shared)

88%

59%

80% 12%

2%

RDM programs are not only managing public forms of reference data, but are focused on public & private in equal measure … also interest

in using RDM to syndicate data services internally © 2014 The MDM Institute The-MDM-Institute.com

THIRD POLL


Top 5 RDM Business Drivers

Reporting, Reconciliation & Regulatory Compliance = key business reasons for pursuing RDM (Bad reference data = bad reports)


Top 3 RDM IT Drivers

n  Developing standard metadata management to support enterprise application integration— e.g., common, standard data domain definitions

n  Providing common reporting dimensions to support analytics across departments/LOBs, application systems, data marts & data warehouses

n  Providing common RDM support services to support transactional application integration

Reporting & reconciliation are also top IT drivers for RDM … Goal for IT teams =providing source of consistent & accurate

reference data to organization & applications


What are the Top Cost Drivers in RDM Projects?

Plan to benchmark development time (screens, BPM/workflow, models) as part of PoC … high development time = high TCO!

Also key cost factor = vendor licensing models © 2014 The MDM Institute The-MDM-Institute.com

Top Evaluation Requirements for Commercial RDM Solutions (Ranked Order)

Multi-domain requirements (cross-domain, inter-temporal), hierarchy management, governance & versioning = top requirements

Rank Table Data

1 Ability to map reference data — e.g., between multiple domains, between time periods or versions of reference data

2 Management of reference data sets — e.g., implementing governance workflows 3 Hierarchy management over sets of reference data

4 Administration of reference data types — e.g., handling public, semi-private & private

4 Versioning support — e.g., support for four main version types: as-of, effective, current, proposed/hypothetical

6 Connectivity & integration with other enterprise applications or MDM platforms

7 Architecture/performance — e.g., enterprise scalable, Cloud-based deployment/licensing option

7 Import & export

9 E2E lifecycle management — e.g., onboarding, managing, retiring, redacting reference data

10 Security & access control — e.g., fine grained/field level permissioning for create, read, update, & delete of reference data


Teams Using Commercial RDM Solutions = Most Satisfied

Tools vs. Sa*sfac*on Effec*ve Program Planning Ineffec*ve Program

Not Planning

Commercial RDM solu0on 23% 6% 10% 0% Exis0ng MDM pla<orm 3% 0% 3% 3% Custom-‐built solu0ons or spreadsheets 0% 23% 13% 0%

ERP or other Enterprise Applica0on 0% 10% 0% 3%

Don't know 0% 0% 0% 3%

Teams that are currently using a commercial RDM solution are the most satisfied, while teams using XLSs are planning on change


Which Vendors are Commonly Short Listed & Which are Being Implemented?

Multiple vendors are shortlisted for RDM (megavendors, incumbents). Incumbent does not mean best fit.


MDM Vendors IBM & Orchestra Networks = Over 2/3 of Implementations Surveyed

RDM focus/components (vs. generic CDI/PIM) seem to be cause, not correlation of implementations


BOTTOM LINE

n  Impact of poor or non-existent RDM is profound n  RDM is vital for analytical, transactional & operational

systems— reflected in investment levels within the organization

n  Initial RDM investments are manageable— getting started won’t kill your budget like CRM, ERP, CDI or PIM

n  50% of successful MDM implementations happen on non-mega vendor solutions … RDM is tracking to the same market dynamics

n  RDM is independent from traditional MDM (CDI, PIM)—forward looking MDM providers have a distinct RDM strategy n  e.g., IBM, Oracle, Orchestra Networks


BUY DON’T BUILD RDM— seek out multi-domain MDM providers with an RDM solution

Next Steps

n  Web research, blogs, investigate social media SIGs, RDM field reports on slide share & MDM Institute website

n  Read market studies, analyst reports, investigate academic resources, e.g., DAMA-DMBOK

n  Attend industry conferences & network with veteran RDM practitioners


Contact vendors & explore their solution Unlike CDI & PIM, RDM can be tested with real business data & users

with very little setup

MDM & Data Governance Summit™ Conference Series

“More MDM programs get their successful start at MDM & Data Governance Summits than anywhere else”

MDM & Data Governance Summit Europe London ▪ May 19-21, 2014

MDM & Data Governance Tokyo Belle Salle Kanda– Tokyo ▪ June 12-13, 2014

MDM & Data Governance Summit San Francisco Hyatt Fisherman’s Wharf – June 17-18, 2014

MDM & Data Governance Summit Canada The Carlu – Toronto ▪ July 8-9, 2014

MDM & Data Governance Summit Asia-Pacific Doltone House, Darling Harbour – Sydney ▪ July 29-31, 2014

MDM & Data Governance Summit New York Sheraton Times Square ▪ October 5-7, 2014

MDM & Data Governance Summit Shanghai Shanghai Int’l Convention Ctr ▪ Fall 2014

© 2014 The MDM Institute www.the-MDM-Institute.com