The Future of Master Data Management
One of the biggest disruptive forces in commercial markets over the last ten years has been the exponential growth of what’s generally known as the sharing economy. Companies like Uber, Airbnb, and countless others have completely transformed the way many consumer goods are produced and distributed. This transformation has been made possible by the creation of new platforms that allow for underutilized assets (houses, cars, labor, etc.) to pooled and commercialized on a scale previously impossible when owners of those assets have acted alone. Fueled by increasing demand for “collaborative consumption” of these monetizable assets, the sharing economy has gone beyond just a new trend and is now a permanent fixture in B2C marketplaces.
Until recently, I had not contemplated much about how the transformation in B2C markets caused by the growth of the sharing economy would potentially impact B2B marketplaces. That all changed about a year ago after I watched a documentary titled The Third Industrial Revolution: A Radical New Sharing Economy, in which noted economist Jeremy Rifkin foretells of drastic changes to our entire capitalist model caused by a shift toward more shared production and consumption of goods. After watching this documentary, I decided to start gathering some qualitative research that could better inform my perspective on how the sharing economy might impact my customers and my company – particularly within the sphere of enterprise master data.
What potential impacts could the sharing economy have on how companies manage their data assets? Will the same forces that disrupted markets for taxis and hotels have an impact on the market for enterprise software platforms and the data managed within them? This article explores those questions in greater detail and suggests there will be three distinct phases over the next 15 years that will represent a complete transformation in how companies manage their core data assets.
Phase 1 – The Growth of Data Sharing via Consortiums
In B2B markets, the idea of producers of goods acting together for common benefit is certainly not new. Various forms of cooperatives, which allow for producers of goods to have communal ownership over the distribution, wholesale, or retail of their products, have existed since the 1700s. In the case of enterprise master data, the equivalent to cooperatives is data consortiums – which have also existed for a long time – including one enabled by Dun & Bradstreet for commercial credit scoring. I believe the same forces that helped create the sharing economy will spur drastic growth in data consortiums, where more and more companies explore the benefits of pooling their data assets in exchange for insights they would not be able to generate on their own.
Some examples of where these insights could be invaluable include things like new supplier onboarding, network security and intrusion monitoring, and customer compliance/risk screening. In all these cases (and many others), the insights created when companies share data can far outweigh the perceived cost of exposing data previously considered proprietary. This shift toward more open views of sharing data assets, especially via formalized data consortiums, is the first shift toward more collaborative consumption of enterprise data in B2B markets.
Phase 2 – The Growth of Data Platforms and Monetization
What consortiums enable through collaborative consumption of data, I believe large software companies will provide by supporting widespread B2B data monetization. Data previously viewed as completely proprietary will certainly be shared between one company and another, but it will be shared for a price (or value) that offsets the cost of creating and managing the platforms needed to enable data monetization. Both proprietary and open-source providers of enterprise software solutions will create data-sharing platforms, where the enterprise data and its associated insights are inherently self-generated, self-substantiating (via increasingly flexible AI and ML algorithms), and natively integrated via pre-wired connections into the IT stacks of the established IT vendors.
The growth of these multi-tenant data-sharing platforms will enable enterprise software providers to shift their focus from providing software to providing value-added services. Using the supplier onboarding example noted above, having access to thousands of shared data points on a given supplier (and their past performance) could allow a large software vendor to completely automate the onboarding process for its customers – at significant value to both itself and its subscribing customers. Other value-added services, such as reference data management and data stewardship, will also be provided by the large software vendors as they increasingly encroach into the markets previously dominated by third-party consulting/services companies.
Phase 3 – Widespread Data Monetization; Data Platforms Become Commercial Marketplaces
Beyond the next ten years, I believe software companies will begin to shift their business models – where the cost of operating their data platforms will be increasingly offset by revenues generated from enabling and facilitating commercial transactions. Supported by blockchain, cryptocurrencies, and other new forms of value-exchange virtual ledgers, there will be significant opportunities for software companies to facilitate commercial transactions between their clients through the creation of virtual markets within their platforms. These markets, in time, will ensure that many of the business processes companies have relied on to fuel competitive differences (like supply chain management, or logistics) will be increasingly commoditized. Software vendors like SAP and Oracle will eventually compete on their ability to provide increasing levels of automation and transparency for the core operational processes that underlie all commercial transactions. If this happens, it’s completely reasonable to assume that the software companies would be making money on the value of the transactions they enable and not on the software supporting those transactions.
Conclusion
I believe the next few years will signal a major shift toward more sharing of latent or underutilized enterprise data assets. B2B markets have always slightly lagged B2C markets, and this situation is no different than any time in the past.