IDC Expects Master Data Management Market for Services and Software to Reach $10.4 Billion by 2009

FRAMINGHAM, MA – OCTOBER 6, 2005 – Motivated by business goals such as compliance and supply chain efficiency, global companies are prioritizing investments in master data management. These are the set of processes to create and maintain a single view of products, customers, accounts, or locations, through a physical or logical hub – across the enterprise or, in some cases, across enterprises. This renewed focus on information governance should push the market for master data management to $10.4 billion by 2009 with a compound annual growth rate over the next five years of 13.8%, according to a new IDC study.

The total master data management market is a mixture of old and new sectors, reflecting a history of enterprises attempting to deal with the challenge of providing a single view of the entities needed for conducting business and measuring its performance. Older terms (such as product information management, customer data integration, and financial consolidation) reflected efforts to provide a single view of one type of master data. IDC has been tracking these applied master data management software segments for well over a decade, as software applications came on the market in the 1980's and 1990's that could be sold to individuals with functional responsibility for specific types of data. What is new is the emergence of master data management infrastructure software that is purpose-built to support any and all types of master data, utilizing a combination of techniques from data and content technologies.

"Maintaining a single view of products, customers, locations, and financial accounts is a significant challenge," said Dr. Henry Morris, group vice president and general manager for IDC's Integration, Development, and Application Strategies research. "At its heart, master data management involves changing, consolidating, and rationalizing core processes such as new product introduction or customer (or patient/citizen/supplier) registration and ongoing management. The greatest complexity comes from these business process changes and process integration issues, over and above the data integration requirements."

The report examines master data management services as well as master data management software, and finds the opportunity for services to be larger, reflecting the increasing complexity and scope of master data management implementations over the 2005-2009 forecast period. IDC has identified and analyzed three types of current master data management scenarios, reflecting the diverse set of projects now being undertaken: The Management Reporting Scenario reconciles, rationalizes, or organizes master data at the hub to drive reporting for compliance and business performance management (BPM). The Data Synchronization Scenario builds consistency in operations by synchronizing master data from the hub back to local systems. The Single Point of Origination Scenario requires that all changes to master data originate at the hub for real-time consistency in operations. As the scenarios become more challenging, increasing levels of services are needed.

The study, Master Data Management: Worldwide Software and Services Forecast, 2005-2009 (IDC #34169), tracks the growth of the worldwide market for master data management software and services in 2004, provides a five-year forecast through 2009, and discusses issues in project implementations based on interviews with master data management consultants.

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IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

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