Blue Ocean Strategy and Master Data Management?
W Chan Kim and Renee Mauborgne in their “Blue Ocean Strategy” (ISBN 1591396190) have predicted that companies should move away from competition and create opportunity where profit and growth exists. Apple has been able to turn around its business, by creating a new market and new product offering through its iPod offering.
The application of Blue Ocean strategy to a Master Data Management opportunity space would be
a) Creation of a hosted Master Data Management solution using preferred vendor packages (IBM, Oracle, Siebel, Initiate etc) - Small and Medium Business (SMB) can subscribe to these hosted MDM solution, that currently act as a clear technology differentiator for large companies.
b) Colluding of complimentary technology such as Open Source technology, SaaS, Collaboration, Web2.0, and MDM and Federated security.
Open source market penetration may require an organization to create an MDM suite that offers an end to end business transformation solution or addresses an MDM enablement program. A typical open source MDM suite would comprise having Sun – Mural MDM integrated through an open source ESB (E.g. WSO2 or JBOSS) and using open source LDAP (E.g. Apache Directory Server), open source database (E.g. MySQL) and open source operating system (E.g. Linux). The MDM stack so created, could host Customer data and prospect data.
The entire MDM suite, can be hosted as “Software as a Service” offering with a “pay as you go model” based on various factors such as subscriber count, number of prospectus hosted, geography etc. Value creation is achieved by visioning of such an open source MDM stack that leverages a hosted solution. It offers a distinctive lowered TCO (Total Cost of Ownership) for an SMB and can provide a IT Landscape for undertaking business transformation initiatives for mid market players.
A value creation process, in essence is not a garden with blooming roses, but has its share of thorns and associated toil. The challenges to be faced would be “regulatory enforcement” i.e. Sarbox compliance, Basel 2, PCI – DSS that requires transparency in data and “security” i.e. Segregation of Duty (SoD) and underlying Access Control List (ACL’s) for the core master data across multi-faceted roles and responsibilities. Achieving critical mass for a hosted solution and achieving in-flux point, where value gets realized is a challenge. All this obstacles could be mitigated if an organization is willing to collaborate with a “trusted-advisor” or “business-transformation” partner that understand the MDM landscape and can provide value-based and quality-oriented implementation model.
As an organization, would you be interested in subscribing to such a model? As an organization would you be interested to undertake a service-offering based assessment of an MDM solution using a subscriber SaaS business model?
Comments
The article is nice! As a customer i would be definitely interested in SaaS.
Posted by: Pallavi | January 21, 2009 6:27 AM
Very interesting piece. You bring up a lot of great points, but I think it may still be a few years before you see widespread adoption of open-source and Software-as-a-Service in MDM. People tend to be very protective of their customer and prospect data (particularly anything involving financial information).
Posted by: Dan Power | January 23, 2009 2:41 AM
Dan,
Thank you very much for your post. I happened to visit your blog at http://blog.hubdesigns.com/author/hubdesigns/ and am impressed by the thought leadership especially in the collusion of two complimentary technologies, MDM and SOA. I agree that organizations tend to be protective about customer and prospect data (particularly involving financial data). However, new technology initiatives such as Federated Security model (http://connect.educause.edu/Library/EDUCAUSE+Quarterly/FederatedSecurityTheShibb/39889?time=1233771379) and completely hosted Security offering as SaaS solution (http://www.infoworld.com/article/07/08/22/Security-SaaS-maturing-fast_1.html) have been making waves in the market space, especially among the CXOs.
Posted by: Jairaj Asok Kumar | February 4, 2009 6:17 PM
Pallavi,
Thank you very much for your post. SaaS as a life blood for Small and Medium Business is a post that may be worth reading.
Posted by: Jairaj Asok Kumar | February 4, 2009 6:23 PM
Jairaj,
I think you're right that we'll gradually see open source and SaaS adoption for Master Data Management - the economic benefits are just too compelling.
I haven't seen them yet, but I am hearing more and more interest in them. Thanks for the info on the Federated Security model and hosted Security offering.
Posted by: Dan Power | February 10, 2009 5:06 PM
If not customer data, this will definitely work for product master data in the retail space. Retailer, Consumer goods companies and their vendors will share product information and collaborate. It will save effort towards master data creation by facilitating self service by vendors and promote collaboration among these group of industries.
Posted by: Sandeep Rao | February 11, 2009 2:45 PM