MDM, Data Governance Among Top EA Trends To Watch

In October, my colleague Brian Hopkins published Forrester’s extremely popular enterprise architecture (EA) trends research, the “Top 10 Business Technology Trends EA Should Watch: 2012 to 2014.” As in past iterations of this research, master data management (MDM), along with the data governance capabilities required to support it, remain among the top technology strategies that EAs expect to deliver the most business value to their firms, as well as require the most change to their firm’s technology landscape over the next 3 years.

In 2009, the anticipated trend around MDM was that it was going to significantly mature both from a technology and architecture standpoint, but also in the skills, best practices and methodologies used to effectively deliver MDM capabilities. I believe that the maturity of MDM practitioners has in fact increased significantly over the past 2 years. In August, I published a report titled “Master Data Management: Customer Maturity Takes A Great Leap Forward,” which analyzed about 175 MDM- and data governance-related client inquiries Forrester received between January 2010 and June 2011. The crux of that research demonstrated that our clients are asking much more practical and insightful questions about MDM architectures, best practices, strategies, governance, and vendor selection than in years past.

Brian’s EA trends report identifies two specific trends around data management and governance:

Trend One: MDM meets process data management

Firms are finally recognizing that there is an unbreakable link between processes and data and that trying to accomplish MDM without accounting for the business processes that generate, govern, and consume the data is difficult or impossible. Process data management aligns data efforts such as MDM with the targeted business processes, decisions and interactions that most effectively demonstrate business value from data investments. We expect continued investment in MDM, but the nature of enterprise business process transformation makes progress slow. Technology investments will continue in both MDM and BPM, with leading firms coordinating the efforts and expanding their single-domain MDM solutions (such as common customer) to multidomain enterprise MDM implementations.

Trend Two: The business takes up data governance

Leading firms recognize data governance as a prerequisite to the success of many other initiatives. Accordingly, data governance has reemerged with vigor, gaining newfound visibility. However, according to our November 2010 Global Master Data Management Online Survey, 70% of the 113 IT professionals responding reported data governance efforts that are primarily IT-driven. We do see a slight increase in the number of programs that are enterprise-driven in which both business and IT participate equally, but we think this trend is significant.

Large-scale enterprise business process, BI transformation, and advanced data quality initiatives have historically delivered below expectations or have failed outright because organizations did not prioritize and take responsibility for governing the business confidence in and trustworthiness of their data. This has been a hard lesson to learn, but the business must participate in data governance for enterprise data and process initiatives to succeed. We expect companies with good data governance practices to continue to be a minority over the next three years, though a significant and growing one.

I’d love to hear your thoughts on these MDM and data governance trends, and be sure to read Brian’s full report to see how BI, business process management, application integration, SOA and other technology initiatives dependent on high quality master data fared in Forrester’s EA Trends analysis!

This blog originally appeared at Forrester Research.