Master Data Management Critical to Effective Information Governance: Gartner

The MDM market continues to grow because it focuses on specific business drivers and business-led initiatives.

Master data management (MDM) is critical to achieving effective information governance, according to a report from IT research firm Gartner, which noted failure to manage information accurately has been the root cause of several incidents, including the leak of sensitive information to WikiLeaks, and can be fatal to the success of MDM programs. Gartner estimates worldwide MDM software revenue will reach $1.9 billion in 2012, a 21 percent increase from 2011.

MDM is a technology-enabled business discipline in which businesses and IT organizations work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the organization's official, shared master data assets. It is increasingly identified by organizations with the launch of a formal enterprise information management (EIM) strategy and the foundation of an information governance program that supports EIM.

"The recent global financial crisis has put information governance in the spotlight," said Ted Friedman, vice president and distinguished analyst at Gartner. "Information governance is a priority of IT and business leaders as a result of various pressures, including regulatory compliance mandates and the urgent need for improved decision-making."

MDM is one of the most notable information governance programs, and the MDM market continues to grow because it focuses on specific business drivers and business-led initiatives. Gartner predicts by 2016, 20 percent of CIOs in regulated industries will lose their jobs for failing to implement the discipline of information governance successfully.

"We've seen rapidly growing interest in information governance-related topics, and this trend shows no sign of abating," said Debra Logan, vice president and distinguished analyst at Gartner. "Information governance is the only way to comply with regulations, both current and future, and responsibility for it lies with the CIO and the chief legal officer. When organizations suffer high-profile data losses, especially involving violations of the privacy of citizens or consumers, they suffer serious reputational damage and often incur fines or other sanctions. IT leaders will have to take at least part of the blame for these incidents."

The report recommends that highly regulated businesses that do not already have information-archiving technology should invest in it to bring email and files under control, and noted the governance-related technology of information archiving has reached early majority and is a key component of an evolving information governance technology strategy. Through 2016, spending on governing information must increase to five times the current level to be successful, the report predicted.

"Regardless of the structure, information governance responsibilities will become part of the roles of more people, and the time and funding allocated to these roles will need to increase dramatically in the typical organization," Friedman said. "Organizations will have to increase their investment in related tools and technologies, both to facilitate the development and refinement of policy, and to distill policies into executable rules that tools can apply to information."

Through 2016, only 33 percent of organizations that initiate an MDM program will succeed in demonstrating the value of information governance. When IT managers start an MDM program, they often struggle to get business stakeholders on board. They therefore fail to demonstrate the business value of MDM, as the necessary changes in business processes are not supported. The report recommended organizations create an MDM governance framework, an organizational structure, and a set of roles and responsibilities to suit their MDM strategy and politics.

"An MDM program is not a project but a commitment by the business to leverage information for reuse in order to improve business process outcomes," said Andrew White, research vice president at Gartner. "The real barriers to MDM adoption remain ones of change management, governance process, organizational change and measurement of business value. The creation of effective governance organizations, policies and processes that focus on the master data life cycle is key to success with MDM."