Organizations considering an investment in SAP master data management (MDM) software have a lot to think about, according to recent Magic Quadrant reports from Stamford, Conn.-based Gartner Inc.
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The two Gartner MDM Magic Quadrant reports -- which evaluate MDM offerings for product data and MDM offerings for customer data, respectively -- found that while SAP’s MDM technology and overall strategy have improved considerably in the last two years, there are still several “cautions” that potential buyers should keep in mind.
For starters, Gartner found that SAP’s multiproduct strategy is beginning to create some confusion among current and potential customers. SAP’s flagship MDM product, SAP NetWeaver MDM, has historically been positioned as the default software for mastering both product data and customer data.
Going forward, however, SAP will position SAP Netweaver MDM as the main choice for customers in heterogeneous environments. Customers who run the majority of their business on SAP applications will increasingly be pushed toward a newer offering, SAP Master Data Governance (SAP MDG).
SAP first entered the MDM software market with the acquisition of content management software maker A2i Inc. in 2004. A2i’s technology became the basis of SAP NetWeaver MDM, and SAP has been tweaking and re-engineering the software ever since.
The software giant originally planned to have just one MDM product to meet everyone’s needs, but those plans didn’t work out. After SAP acquired Business Objects for $6.8 billion in 2007, SAP Business Objects Data Services software was added into the MDM mix. The software allows user to cleanse and integrate data from non-SAP applications. Soon after that, SAP introduced the first incarnation of SAP MDG.
SAP MDG is an umbrella name for what will eventually be a set of domain-specific MDM applications. SAP MDG for Financials was introduced in 2008, and customers can soon expect to see MDG for Materials and MDG for Suppliers. Within the next two years, Gartner predicts that SAP will also introduce MDG for Customers. SAP MDG is fully integrated with the SAP Business Suite and delivered through enhancement packages, according to SAP’s website.
“(SAP MDG) is positioned as ‘embedded MDM,’ with a focus on SAP Business Suite,” Gartner analyst John Radcliffe said in an email interview. “This is in contrast to NetWeaver MDM, which is now positioned for ‘enterprise MDM.’”
SAP MDG will appeal to many SAP customers, Radcliffe said, but most will still need SAP NetWeaver MDM to integrate with non-SAP systems.
Wanted: SAP master data management reference customers
SAP provided a relatively sizable list of customers that could respond to a Gartner survey about their experiences using SAP technology for MDM of product data. The majority gave SAP good scores for helping them achieve an enterprise-wide view of master data and for SAP’s support of industry specific functionality. But some gave SAP weaker scores for hierarchy management and product data quality. Additionally, Gartner found that SAP needs to focus on its partnering strategy so that customers will have an easier time finding local support.
Respondents to an online Gartner survey gave SAP NetWeaver MDM low marks for data modeling, data quality facilities, workflow support for a data steward and integration, and synchronization with other systems.
While more organizations are using SAP NetWeaver MDM to manage customer data, Gartner says there is a significant gap between the number of licenses sold for this purpose and the number of live implementations. Gartner estimates that SAP has sold licenses to 500 sites, but the number of those sites with live implementations for MDM of customer data is hovering around 175.
Radcliffe suggested that SAP’s lack of reference customers with live implementations could reflect a desire among some customers to wait until NetWeaver MDM grows more mature.
Andy Hayler, president and CEO of The Information Difference, a UK-based consulting firm that focuses on MDM, agreed with Gartner’s assessment of SAP’s reference customer situation.
"[SAP MDM] has the advantage of being multi-domain in nature, but had some architectural limitations which took some time for [SAP] to address,” he said. “In my view, SAP needs to do more to publicize the usage of SAP MDM by their customers and demonstrate more real-life success stories with it."
SAP master data management: Key strengths
While SAP has traditionally lagged behind the competition in terms of MDM and related functionality, Gartner says efforts are under way that should help the vendor catch up.
For example, enhancements over the last two years provide SAP users with greater flexibility and better integration with other SAP products, such as SAP BusinessObjects software.
Additionally, Gartner found that SAP is putting a greater emphasis on data stewardship, data quality and data governance. Gartner says that new products coming out in 2011, including SAP Information Steward, should help organizations better manage the lifecycle of master data with capabilities like visualization and hierarchy manipulation and reporting.
Gartner said SAP can also count on a large MDM customer base, particularly in industry verticals like manufacturing, retail, energy and consumer packaged goods.
According to Rob Karel, a principal analyst with Cambridge, Mass.-based Forrester Research Inc., SAP for a long time failed to listen to its customers’ MDM concerns and was generally guilty of poor MDM strategy execution. But since acquiring BusinessObjects, Karel said, SAP has begun the process of turning things around.
“SAP has done a better job [of] recognizing some of limitations that they had in terms of supporting non-SAP heterogeneous environments, for example, and in supporting customer data more seamlessly,” Karel said. “[But] I think that they still have a long way to go.”