Why Reference Data Management is Now Mission Critical

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
Things
Parties
Relationships
Master & Reference
Data

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

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?

“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
RDM Top 10
Eval Criteria #2
LOCATION&FINANCE

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
RDM Top 10
Eval Criteria #2

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)
RDM Top 10
Eval Criteria #3
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 Mappin
Active Ingredients & Product Mappi
Viewing customers by industry classification
Viewing drugs by Active
Ingredient interactions & ICD-10
Codes
RDM Top 10
Eval Criteria #5

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)
RDM Top 10
Eval Criteria #8

2014 RDM Market
Survey Results (Overview)
Aaron Zornes
Chief Research Officer
The MDM Institute
aaron.zornes@tcdii.com
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
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

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

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

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

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

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

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