Andy on Enterprise Software

Initiate not going for Initial

June 27, 2008

In what could not be described as surprise move, Initiate Systems just pulled its previously planned Initial Public Offering. The turmoil in the capital markets means that it is difficult time to raise money right now, and so it seems sensible to wait until a better time for going public. This does raise the possibility of whether Initiate will consider raising money another way (update – it just did a USD 26 million private round), or indeed whether a potential predator might consider this a good time to pounce.

Generally this has little impact, but a lack of exit opportunities is a poor thing for the enterprise software sector in general, as venture capital firms are less likely to invest in earlier stage firms with one of the two exit routes (the other being a trade sale) closed. Initiate had made excellent market progress with its MDM technology, and it would have been nice to see a pure-play MDM vendor going public.

MDM Fashions

June 25, 2008

There are some good points in the DM Review article on MDM by William McKnight. In particular, I like that he clearly highlights some issues that some parts of our industry are still in denial over:

(a) that customer and product data are just a small, though important, part of the master data picture for an enterprise.
(b) in reality, most companies will end up with more than one approach in MDM “style” or architecture, due to sheer complexity of the enterprise application environments out there. I feel that too often IT architects spend time agonising over the most “elegant” approach when in fact the tools are still evolving, and will no doubt go through more than one iteration of architecture over the next decade. Given the savings to be made out there by improved master data management, waiting for a perfect solution may be a costly and missed opportunity.
(c) data quality is a key part of an MDM project. Indeed, as my colleague Dave Waddington said the other day: “if you don’t have any data governance processes, what exactly is the point of doing a data quality project?”. One-off data quality initiatives may have value, but without the processes to fix the disease rather than treat the symptoms, the patient is never going to get truly better.

Although it might seem obvious that “The best place to manage master data is in the operational environment” as it says in the article, I am not sure that in practice this is always right. Some companies with a very centralised approach may have the discipline to really drive home a single master data system across the enterprise (I was speaking to one just the other day) but many do not. For de-centralised companies it may well make sense to consider alternative architectures, as it may simply be impractical or go against the grain of the corporate culture to have a central, harmonised set of operational master data.

Other than that caveat, it seemed like generally sage advice.

MDM Research

June 18, 2008

Just to let you know that the Information Difference has released its first piece of primary market research, as reported by IT Pro. There are some intriguing snippets in the survey results, as well as some rather more expected results, or the “well, duh” results as Homer Simpson might say.

13% of the (mostly larger) 112 companies surveyed had over 100 systems that hold and maintain customer data, which gives some idea of the scale of the problem that MDM is tackling. It is bit more than “just put in a hub” when you have systems at this level of complexity.

Given the generally flaky level of data quality reported, I found it surprising that nearly a third of the companies in the survey had not purchased an automated data quality tool.

The good thing was that plenty of companies seem to have begin measuring the costs of poor master data, and those costs are high, which should make it easier to justify master data management initiatives.

Data Quality stories

June 13, 2008

Yesterday I went to a London IDC conference on business intelligence and integration, but fate seemed not to be on my side. I had gone mainly to see a presentation on MDM by Deloittes, but when I turned up this was missing from the agenda entirely (the presenter had pulled out with less than two days notice). The next presentation I wanted to see suffered from the presenter being taken ill, and so had someone else reading his slides (which never ends well), and the third presentation I fancied was also cancelled and had an unrelated substitute. This was in no way the organiser’s fault, but was a shame.

The most entertaining thing I saw was a presentation by a consultancy firm on some real-life data quality situations they had encountered at clients, showing just how tricky data quality algorithms can be. There was the “false positive” of two customer records, both A. Smith, both at the same address and both with the same date of birth. Not unreasonably the data quality algorithm duly rejected adding the second of these since it was obviously a duplicate record. It turned out to be two twins, Alice and Anthea.

The most amusing was a company who had a call centre records system and had put in a new data quality system to help them with this. An obscure element of this was a feature that automatically removed any records containing profanity by searching for swear-words within the text fields, presumably to protect the delicate feelings of the call centre manager. All seemed to be going well until after a few weeks it became clear that every single call from a certain English town had been blocked by the system. That town was Scunthorpe (think about it). The joys of unintended consequences.

Separately, I discovered that a well known high street bank has identified 8,000 active customers who, according to their systems, have an age over 160. At least they know they have a problem, and an active data quality program to address it.

The dust clears (a bit)

June 5, 2008

I have wondered for some time about Informatica’s intentions in the MDM space. There had been some market rumours about them possibly buying Siperian, but it seems as if their not so secret meetings with Siperian were actually to form a partnership, which was just announced.

This is an eminently sensible partnership in my view. In most MDM projects there is going to be much gather of data from multiple places, and so MDM vendors typically need to rely on integration, or at least data movement technologies that enterprises have already deployed. Assuming that this relationship will be exclusive (unclear from the press release), Siperian has locked in a relationship with the last remaining independent ETL and integration player of note (Ab Initio is also still out there, but is so secretive that it is part vendor, part cult). Informatica gains a foothold into the fast growing and important MDM market, so it is a win-win as far as I can see.
Perhaps one day this relationship will lead to something more binding, but for now these two vendors appear to be dating rather than tying the knot.