Why Cloud MDM? By: Deepak Gopal & Ashraf Mohammed May 2013
Why Cloud MDM? In this whitepaper Why cloud MDM? we ll take a closer look at the compelling and unique advantages that enterprises will gain when a foundational system such as MDM (Master Data Management) is on the cloud versus On-Premise. Master Data Management is a central hub which cleanses and consolidates high value, sensitive, enterprise data originating from disparate source systems, to provide enterprises with a single source of truth. This paper will also highlight some recommendations to eliminate commonly cited risks involved when moving a high profile system such as MDM to the cloud. Economic Boon Economy is possibly the most valuable justification for cloud MDM. According to a study by EMA, which interviewed 159 customers with active cloud deployments, 6 out of 10 reported that the cloud helped them reduce their IT capital costs by 26%, and IT operating costs by 22%. Cloud MDM can be implemented in just a few months without the heavy upfront capital costs, which are a pre-requisite for on-premise MDM. This is in contrast to traditional on-premise MDM which is expensive, clunky, requires heavy upfront investment, years to implement and is consequently, too slow to deliver value. I T BUDGET CAPITAL OPERATING Fixed, One-time expenses: Infrastructure purchases Hardware purchases Licenses Reduced 26% by cloud Operating expenses: Maintenance Rent Salary Reduced 22% by cloud Elastic Computing Another facet of the economic advantage of cloud MDM is the concept of elastic computing- which in lay man s terms translates to pay only for what you use. With players like - Amazon EC2, Google Compute Engine and Rackspace customers are able to be in charge of their IT infrastructure spending at any given time. From the customer s perspective, this is a better situation to be in. MDM on the cloud is very cost effective when compared to running MDM in a data center. 1
Multi-tenancy Multi-tenancy is another valuable feature of cloud MDM. Multi-tenancy refers to the principle in software architecture where a single instance of the MDM software runs on the cloud, yet, serves multiple customers or tenants, with no infringement or overlap between tenants. Multi-tenant cloud MDM is strategically architected to partition data and configurations, so that each client is assigned a highly secure, customized, unique and virtual application instance. Multi-tenant MDM allows enterprises to leverage MDM benefits while eliminating the exorbitant cost factor. This is in contrast to on-premise MDM, where each customer is required to purchase expensive software up-front. Multi tenancy, most importantly puts MDM within the reach of medium and small enterprises, which grapple with data issues in the same way as large enterprises, but are restrained by limited resources. IT and Business collaboration With regard to MDM, the following scenario has played out all too often business proposes a brand new vision for the enterprise to transition to customer-centricity. The executives entrusted with delivering the new reality soon hear from IT that MDM is the assured path to achieve customercentricity. ROI and business cases are presented using IT s justification of centralizing data integration, citing data quality and data consistency as driving benefits. There is a widespread IT belief that data quality efficiencies are the totality of MDM. On the other hand, business leaders recognize that today IT has become more integrated into the business process and realize that IT involvement is imperative to accomplish a complete customer-centric transformation, by refining business processes and lifecycles. IT by itself is incapable of finding and mitigating the root causes of existing inconsistencies and inefficiencies- however, proactive participation from Business can help prevent such inconsistencies in the first place. With cloud MDM a collaborative partnership effort between Business and IT is a must - and ultimately the enterprise stands to gain. With MDM on the cloud, IT resources are freed up from, the chore of hardware procurement, maintenance, security and production support. This allows IT to be available to engage on tasks that are strategic to the enterprise s MDM initiative such as administering data validation rules, Quality Assurance and so forth. In this way, Cloud MDM eliminates the leading cause of MDM failure, which is lack of involvement from Business. Superior Architecture at Standard rates In order to create a competitive advantage, cloud vendors incorporate advanced IT architecture into their offerings right from the ground up making them more secure, scalable and agile. Cloud MDM can leverage architectural benefits like: Elastic Infrastructure. Consumption of virtual resources like memory can be expanded and contracted, at will. The customer only pays for resources actually being consumed. Map Reduction: This is a framework for mapping and parallelizing data query operations into smaller sets (nodes) and combining the resulting outputs into one deliverable set. Move Batch Processes to Real Time: With cloud MDM, processes that were previously batch driven, move to real-time or near real-time, by leveraging technologies like SOAP and Web Services. Caching: This greatly accelerates the 2
performance and scale of the MDM applications by keeping frequently-queried data in-memory, close to the application itself. This reduces overhead on the database tier and also eliminates unnecessary network latency. Security and reliability According to the findings of a survey conducted by a leading security vendor who analyzed 70,000 security breaches over a 12 month period - applications and data are less likely to be attacked on the cloud than on-premises systems (Forbes magazine). Today, cloud systems have proven to be more secure and reliable. Many cloud vendors adhere to security audits like SAS -70, ISO 27001 certification, stringent firewalls, intrusion-detection systems, SSL encryption, dedicated T1 lines, frequent patches and testing to ensure better reliability. For MDM to serve its purpose of being the central hub, it needs to be empowered to receive data from source systems which often sit across geographies, stored in stringently protected silos, requiring highly privileged system access. With cloud MDM, it is possible for enterprises to opt for Saas options that offer the highest level of internet security possible and different MDM components could be architected to run on different topology zones. This is far more sophisticated than what most in-house MDM teams can hope to accomplish. Technology Agnostic Today, customers prefer to use, stand alone, best of breed solutions to fulfill the needs of their business processes, rather than be tied down by one bulky ERP solution. For example, Expensify for Expense tracking, QuickBooks for Invoicing, Intuit for Payroll and so forth. Cloud MDM is capable of being architected, to be agnostic to an enterprise s technology choice for different processes. A cloud MDM app would feature a stack of readily available connectors to pull data from other best of breed cloud applications. Cloud MDM is an enabler for the fulfillment of the enterprise s vision to become technology agnostic. On the contrary, on-premise MDM black boxes typically lock down business agility. Allows business to focus on their core strengths When the cloud provider takes over the responsibility of supplying the right solution platform, infrastructure, production environment, permissions, upgrades, maintenance, security and so forth, a heavy burden is lifted off the shoulders of the customer, who is now able to focus on its core business and advance in accordance with industry trends and best practices. With on-premise MDM, the customer is restricted by solution limitations, and the enterprise s architectural goals remain unattained. Multi Domain capable A Multi domain MDM hub platform needs to be agile, powerful, and able to sustain changes in architecture and purpose to the needs and speed of business, without breaking the bank. Multi-Domain 3
Data Management is the most processor & RAM intensive operation. Data domains need to be flexible and capable, Data needs to be partitioned, manipulated, aggregated, DQ operations such as probabilistic matching, syndication and synchronization are ever increasing. On-premise MDM is a costly and less agile type of architecture choice for supporting these growing needs. This is especially evident during mergers and acquisitions, when new companies are acquired and new applications need to be added to the existing IT landscape. In such a scenario multi-domain MDM is a must. Multi-domain MDM calls for large increases in infrastructure, and flexibility which cloud MDM can easily provision, while helping the business sail smoothly to achieve their goals. Because cloud MDM vendor platforms leverage the latest Cloud application technologies such as in-time memory database processing, graph databases, Hadoop & Map Reduce for Parallel Processing, terabyte's of additional storage is needed which cannot be provisioned on -premise. In such scenarios, cloud MDM is the answer. Cloud MDM can be architected to be multi- domain capable and provide a foundational layer that provides data as a service. This becomes the basis for enabling data virtualization. For instance: a major retail company uses Customer MDM for Approval, Credit Checks, and key business Approvals. Another large consumer product company is moving their product catalog into a Multi domain MDM solution. Moving to the Cloud Transition to the cloud must be approached in a phased manner. The transition strategy must be designed to sustain the company s competitive advantage. If the transition is paced too fast, business continuity, security, and compliance could be compromised. But if the pace is too slow, a company may fall behind its competitors who have already realized the competitive edge of operating on a more agile, efficient and cost-effective platform. Migration to the cloud must be coordinated across all divisions so that the whole enterprise follows a shared roadmap in a common and controlled approach. Steps to Mitigate risk while Transitioning to the cloud In order for a company to smoothly transition to the cloud, IT must appoint IT leaders such as architects within the organization, who have the skills, expertize, experience and vision required to determine the best timing and adoption methodology to move the organization to the cloud with the least risk, yet achieve maximum ROI. The architects could start by classifying data processed in different applications by determining the policies and business rules that govern them. This can help them decide if those applications are better suited for a private cloud MDM solution vs. public cloud MDM solution. Another good approach maybe to choose the most strategic application data to place in the cloud MDM application. Other efforts that are recommended to mitigate the risks involved with transitioning to the cloud are to Standardize source applications even before initiating the cloud migration, and organize the cloud MDM projects around IT and application standardization efforts. Embarking on a transition to the cloud with strategic steps such as the ones referenced above in place, will allow the organization to migrate to the cloud painlessly while optimizing performance, reducing risk, and increasing ROI. 4
Importance of a Partner with MDM + Cloud expertise In order to execute a successful cloud MDM strategy, IT departments need to actively engage with a partner who has both - the expertise in MDM, and expertise cloud technologies. It is imperative for this partner to also be firmly committed to the long-term vision of how MDM in the cloud will truly benefit a company. Expertise in cloud technologies is one skill, which is very different from expertise in MDM. So, to realize cloud MDM success, IT needs a partner that has been on both paths, and possesses the knowhow and expertise required to blend these two technologies. The concept of MDM on the cloud end to end- is fast becoming a reality. With backing from cloud providers and data centers who continuously work to improve the reliability, performance and security of the cloud, all indications are that Cloud MDM is here to stay! About the Authors Deepak Gopal Deepak is a reputed MDM Solution Architect with 7+ years of MDM implementation experience on platforms including Oracle, Siebel, Informatica/Siperian, and Tibco CIM. Deepak has successfully delivered over 15 MDM implementations across various industry verticals including financial services, logistics, telecommunications, public sector, consumer/food goods, hi-tech, and so forth. Deepak has a total Information Technology experience of over 26 years. During this time he has served reputed names like Oracle, Cisco, Bank of America and Abbott Laboratories with focus on enterprise initiatives concerning data management, business intelligence, and business process management. To leave your questions, comments or feedback for Deepak please write to dxgopal@yahoo.com Ashraf Mohammed Ashraf is a TOGAF and IBM Master Certified Information Architect specializing in MDM Master Data Management. He has delivered successful MDM projects across industry verticals such as agrochemicals, finance, telecom, multi-media, publishing, e-government, retail, O&G, healthcare and so forth and has worked for reputed concerns like IBM, Oracle and Siebel. He has seen first-hand the lofty visions set forth by corporate executives fall flat due to wrong technology choices, glaring deficiencies in existing MDM solutions and avoidable pitfalls. He believed the time was right for an MDM solution designed specifically to solve the complex data challenges faced by enterprises, in today s age of the internet, mobile computing, social networking and cloud solutions. Thus was born Enterprise Technology Solutions, LLC and iclassic MDM - Accurate data, endless possibilities. iclassic MDM is a cloud based, flexible, highly configurable MDM solution seamlessly built on latest technology and Information Architecture. See www.etsondemand.com To leave your questions, comments and feedback for Ashraf please write to ashraf@etsondemand.com 5