Benefits Of Leveraging The Cloud Extend To Master Data Management

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1 A Custom Technology Adoption Profile Commissioned By Liaison Technologies April 2014 Benefits Of Leveraging The Cloud Extend To Master Data Management Introduction It is extremely difficult to imagine an IT department that is not being challenged by the business to meet the demand of its customers (both internally and externally). Various deployment models (such as cloud, onpremises, or a hybrid approach) and emerging technologies (such as mobile and social) add to IT s complexity to have a consistent view of business and customers. Cloud-based master data management (MDM) offers IT robust data governance to coordinate data sources across deployment options and other technologies in order to quickly meet the demands of business change. This profile examines how US enterprises plan to use cloud MDM to support business strategies. In March 2014, Liaison Technologies commissioned Forrester Consulting to conduct a custom study of 51 IT data decision-makers at US enterprises to evaluate their plans for deploying cloud MDM. All survey respondents demonstrated a clear understanding of the definition for cloud MDM and had partial or final decision-making authority for data practices within the organization. The study captured insight into the benefits and challenges to implementing cloud MDM, as well as the capabilities that firms look for in a vendor to assist with deployment. Results from the custom survey were complemented with Forrsights Software Survey, Q4 2013, and Forrester s Q Global Cloud Developer Online Survey.

2 2 Cloud Solutions Transition From Nascent to Adopted Data from Forrester s Q Global Cloud Developer Online Survey shows that cloud adoption peaked in 2011 with organizations implementing approximately 50% of new code in a cloud environment over the next two years. 1 Implementations initially focused on storage, computing power, and database management, but a movement toward new technologies and core business transactions are keeping cloud-related projects high on the agenda for IT. 52% of enterprise respondents in Forrester s Forrsights Software Survey, Q4 2013, stated cloud-related projects as being a top three priority for the organization. The pace of business change is increasing and technology management professionals have turned to the cloud to deploy solutions in order to quickly meet this demand. The environment is well suited to easily create solutions at a lower cost. 57% of developers with direct experience developing applications using cloud computing environments because it s the fastest way for me to get done. Data-related projects were ranked as the highest priority (73%) among enterprise respondents in Forrester s Forrsights Software Survey, Q MDM provides that safety net. And, keeping with trends in overall cloud strategy, 74% of organizations see cloud MDM as a viable option even as they consider traditional onpremises MDM solutions (see Figure 1). However, an overall cloud strategy doesn t tell the whole story of why cloud MDM is attractive. Organizations are using the cloud for customer analytics, business performance, and product management and cloud MDM is expected to support these priorities (see Figure 2). FIGURE 1 Cloud MDM Is A Viable Option For Most Organizations Is your organization interested in evaluating, piloting, or currently using cloud master data management (MDM)? Using or implementing cloud MDM 10% Piloting cloud MDM 10% Evaluating cloud MDM 35% Interested in cloud MDM 19% TREND INFLUENCING GROWTH FOR CLOUD MDM The trend toward business facing value over IT infrastructure introduces new challenges into a company s already complex ecosystem. The ability to synchronize business processes and maintain a consistent view of the business and customer becomes increasingly difficult as organizations adopt a hybrid strategy of cloud and onpremises solutions. Additionally, big data adds another dimension in terms of expectations and data management. Forty-eight percent of business professionals expect to get business value from big data at the same time it solves the challenges of keeping up with the volume, variety, and velocity of data. 2 Without robust data governance coordinated across cloud and on-premises, the return on investment for cloud won t be attained over the long run due to data risks that impact business success. No plans to use 26% Base: 69 IT data decision-makers using or planning to use MDM at US organizations

3 3 FIGURE 2 Cloud MDM Would Support Customer Analytics And Business Performance Management What are the top three business strategies or objectives would a cloud MDM solution support? Customer analytics 41% Business perf. mgmt. 39% Product management 31% ecommerce 25% Customer experience 25% Logistics 24% Supply chain management 24% Order management 22% Customer loyalty 18% Product exchanges 12% Regulatory compliance 12% Base: 51 IT data decision-makers using or planning to use cloud MDM at US organizations Cloud MDM Lets Companies Focus On Data Value, Not Administration MDM is by nature complex, straddling between the edges of data delivery to the business and orchestrating data across a heterogeneous data infrastructure. An MDM solution has to simultaneously satisfy the collaboration between business and technology professionals to define and implement data policies and manage the systems to automate execution of those data policies and rules. Organizations are looking to cloud MDM as a way to optimize MDM implementation and better manage support resources for their cloud strategies. But, they also recognize the role of business users in the process and that cloud MDM must at some point scale for a hybrid environment cloud and on-premises (see Figure 3). Not all cloud MDM solutions are created equal. For example, many were developed to specifically support SaaS applications such as CRM, implement a black box to reconcile customer records, or are on-premises solutions that can run in cloud environments but lack the consumerization form factor. 3 However, a new breed of cloud MDM is emerging that allows organizations all the functionality expected to support complex data ecosystems and benefit from the reduced overhead to update software, install patches, and even build and optimize master data rules and processes. 4 Key questions organizations should ask specifically for cloud MDM are: What is the level of services to support the development and implementation of my cloud MDM solutions? What managed services are available to help with ongoing changes to master data rules and processes? What managed services are available to support the manual remediation of data? Can the cloud MDM solution support multitenant deployment? Are new features and patches hot-deployed without the need of internal resources? Can the cloud MDM solutions manage data across a hybrid environment (cloud and on-premises)? How quickly can new data sources be added to the cloud MDM system? Can the cloud MDM solution support non-rdbms systems and virtual sources (i.e., in-memory, data virtualization, columnar, graph, etc.)? FIGURE 3 Cloud MDM Provides A Strategic Focus For Organizations What are the top three benefits do you perceive a cloud MDM solution having over an on-premises solution that makes it more attractive for purchase? Faster time to implement 43% Aligns with strategy to move to the cloud Reduce the internal resources for patches and upgrades Easier for business users (nontechnical teams) to use Improves master data orchestration between cloud-based and on-premises systems 22% 29% Base: 51 IT data decision-makers using or planning to use cloud MDM at US organizations 43% 41%

4 4 AN ENABLER TO PIVOT TOWARD BIG DATA AND ANALYTICS Customer analytics tops the list of priorities (41%) that cloud MDM has to support. Increasingly, big data is the solution to understand the customer better. High-growth customer analytic practices such as social media analysis, segmentation, customer attrition, and product suggestions all require vast amounts of data that require big data solutions to make it possible. 5 It should come as no surprise that cloud and big data will collide to enable customer analytics. Next-Best Action Across Channels Is The Next Wave for Cloud MDM The thrust toward customer analytics is as much about insight as it is about influence. Forrester has identified that next-best-action has peaked in the growth stage of capability adoption and is poised to move into equilibrium within the year. As adoption of SaaS applications, mobility, and customer analytics are becoming mainstream cloud strategies and priorities, so too will next-best-action be a fundamental aspect. Master data management is the linchpin to making this possible and be a fast follower to orchestrate customer profiles, behavior, product master and ecommerce activity is crucial. Cloud MDM will need to incorporate capabilities that support multidomains, omnichannel, and flexibility optimize the customer master across the entire life cycle and engagement with the customer to ride the next wave of business strategy for the cloud.

5 5 Methodology This Technology Adoption Profile was commissioned by Liaison Technologies. To create this profile, Forrester leveraged its Forrsights Software Survey, Q4 2013, and Forrester s Q Global Cloud Developer Online Survey. Forrester Consulting supplemented this data with custom survey questions asked of 51 IT data decision-makers US enterprise organization that are using or planning to use cloud MDM. This custom survey was conducted in March For more information on Forrester s data panel and Tech Industry Consulting services, visit Endnotes 1 Source: Q Global Cloud Developer Online Survey Results, December 14, 2012, Forrester Research Inc. 2 Source: Business Technographics Global Data and Analytics Survey Results, 2014, Forrester Research 3 Source: Market Overview: Master Data Management, Q2 2013, April 23, 2013, Forrester Research Inc. 4 Source: The Forrester Wave : Master Data Management Solutions, Q1 2014, February 3, 2014, Forrester Research Inc. 5 Source: TechRadar : Customer Analytics Methods, Q1 2014, February 25, 2014, Forrester Research Inc. ABOUT FORRESTER CONSULTING Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. 2014, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to 1-P9CA70