At the MDM Summit in Toronto last Friday, an oil and gas exploration company shared how its engineers have better faith in data. SAS Institute Canada describes the journey that is MDM, and the MDM Institute names vendors who will monopolize the market in 2009

Good master data management needs a focus on data

TORONTO – To engineers at oil and gas exploration and development company Nexen Inc., having access to information means being able to think in terms of concrete data and not barrels of gas.

The Calgary-Alta.-based company wanted a master data management (MDM) strategy such that its engineers would have data delivered to them in a valuable format, and not waste time sourcing and dealing with potentially unreliable sources, said the co-founder and senior partner Steve Dolha.

“We found that most of the engineers were spending 50 to 80 per cent of their time sourcing, cleaning, confirming data, basically taking away from doing valuable engineering work,” Dolha said to an audience at the MDM Summit in Toronto last week.

Engineers at Nexen were losing faith in the available data pools, given the number of sources they had to weed through, said Dolha. As a result, they would create their own personal data sources they knew they could trust, further adding to the jungle of data silos.

Dolha said the company is in the early stages of a master data management and data analytics strategy, but the executive level is on board with a focus on the value of information. While initiatives exist only at the departmental level for now, Dolha said Nexen has “an eye towards the enterprise.”

For instance, reaping additional value from the huge amounts of data that have been collected within operational systems over time would require clean up. Demonstrating that corporate shift in focus on data, Dolha said a massive two-year project is ongoing to cleanse the information and put mechanisms in place to maintain data integrity.

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Analytics versus intelligence

Besides data integrity, Nexen engineers needed the ability to use data to project into the future. Over time, field wells collect water, and engineers must know the most cost-effective method by which to remove that water while maximizing production, said Dolha. With the working model and some analytic tools, engineers are able, based on the data, figure out “which wells need water first (and) how often to do them to maximize production and keep operational costs down,” he said.

Now, engineers have reported they can analyze 2,500 wells in minutes, not weeks, he said.

Nexen worked with Cary, North Carolina-based business intelligence vendor SAS Institute Inc. on its master data management and data analytics strategy. Marc Smith, solution architect with SAS Institute Canada, said Nexen’s data strategy is essentially a journey that started with removing uncertainty in their data to progressing to doing that on a consistent basis.

Moving away from an undisciplined, reactive mode means “you’re no longer looking at things from a rear-view-mirror perspective, you’re trying to do things across both your operational and analytical worlds … ultimately getting into business processes that are governed,” said Smith.

Businesses in the retail sector, for instance, have the ability to respond to predictable events, such as not shipping an even distribution of goods knowing the varying consumption rates of different geographical regions, said Smith. “But organizations still don’t do it. If they have the data, why don’t they do it?” he asked.

The answer is it’s not easy. It takes an investment, and requires some will, said Smith, and there is “just a general lack of fire in the belly for analytics,” said Smith. “In my mind, analytics are worth the money.”

According to Aaron Zornes, chief research officer with Burlingame, Calif.-based MDM Institute, the MDM market is expected to grow to US$2 billion by 2012, and will become a large and strategic market for vendors and system integrators.

Zornes said MDM has progressed to mainstream from the early adopter stage, and that in 2009 certain vendors like IBM Corp., Oracle Corp. and SAP AG will monopolize the market share. But that’s not to say new entrants like Microsoft Corp. won’t make an MDM presence as well, he added.

Recent research by the MDM Institute revealed five top business drivers for adopting an MDM strategy. They are compliance and regulatory reporting; economies of scale for mergers and acquisitions; synergies for cross-selling and up-selling; legacy systems for integration and augmentation; and end-to-end customer data updates.

Acknowledging the advantages of MDM and the journey that such a strategy entails, Zornes said “the challenge is, how much do you chew off in that first bite?”

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