What Will the Intersection of MDM, Spend Analysis and Supplier Management Look Like?

Over on CPO Rising, Andrew Bartolini recently plugged a webinar on the intersection of master data management (MDM) and procurement data strategy. I like how Andrew weaves together and frames the high-level case for MDM as a core component and extension of spend analysis. In his words, capturing spend data "is only one part of the equation; being able to view it, analyze it, and ultimately take action based upon it is where the real value lies. But, in the large and ever-expanding IT ecosystem that exists within most enterprises, there is another level of data that impacts procurement: master data."

Let's be candid with ourselves for a second. Only tiny minorities of procurement organizations have ever been successful in deploying a master data strategy that extends past a silo or two (e.g., catalog content management, vendor master management). Moreover, even fewer companies that I've observed or worked with over the years have attacked the challenge of master data from the ground up as a system-wide opportunity, rather than from a functional, application-specific or back-end silo perspective. In other words, solving a true MDM approach for something like vendor master management must encompass all of a company's systems, providing a means to access, push and pull information in real-time regarding vendor details and system updates. Yet for most procurement technology specialists I know, work with and interview, the concept of real-time, cross-system vendor management is about an MDM dream rather than a near-term possibility.

It's a shame, because this does not have to be the case. Independent vendors like Zycus, Spend Radar and Endeca are all doing extremely creative and useful things with procurement master data. Moreover, even the ERPs, who one could argue created the problem in the first place, are rising to the occasion (Oracle, especially, is pushing the limits of what's possible by extending the concept of consumer data hubs (CDI) into the procurement space through its Supplier Hub offering). SAP, too, has some truly fascinating things up its sleeve, including cross-company (yes, you read that correctly) data access and benchmarking based on a meta-layer of SAP systems data, rolling up from individual instances into a broader, potentially industry whole.

Procurement MDM offers huge potential to transform how we go about managing all information about spend, catalog content, suppliers and categories, to name but a few areas it will ultimately touch. I believe we're about to see a whole new renaissance and focus in this area in the coming years. And Andrew Bartolini is one of the few analysts -- independent or otherwise -- who understands the potentially massive implications.

- Jason Busch