The Data Dilemma and Master Data Management
Managing vast amounts of data sets comes with various challenges for all businesses. In addition, failing to overcome them results in punishing consequences.
To highlight why Master Data Management is important, we will paint a picture of a business scenario. Hopefully (or not!), some of it sounds familiar:
Poor Data Management Scenario: Electronics Retailer
123 Electronics is a mid-sized electronics retailer. They currently have an online presence and are growing at a healthy pace. Nevertheless, as they expand their product range and customer base, they experience more problems maintaining their master data. Here are some of the operational difficulties they face:
As 123 Electronics grows its customer base, customer data becomes inconsistent and chaotic. This includes names, addresses, contact details, and purchase history. Customer data is essential for personalization, customer service, and marketing. It also has profound privacy implications, too!
Product data includes details about all of the products 123 Electronics offers. This includes product descriptions, pricing, SKU numbers, and images at the very top level.
However, because they’re an electronics retailer, much of the product data is detailed and specific. However, data elements quickly go missing as they are managed across spreadsheets and OneDrive folders.
As 123 Electronics continues to grow, so does their headcount. Each team member has data related to their contract, such as salary and work histories.
So, why is MDM important in this context? Employee data is vital for HR functions, including training, discipline, and occupational safety.
123 Electronics opened new sites across the country. As a result, data about their various sites grows. This includes sensitive data relating to facility details (security information) and store management. This data has to be efficiently managed to ensure smooth store management.
This includes critical accounting information, such as financial statements, budget data, and transactional records. This is all extremely important for financial analysis and compliance.
As you can see, that’s a lot of different types of data. And, lots of it’s extremely sensitive. One of the most important parts of MDM is that it consolidates disparate data sets, leading to increased consistency, accountability, and data governance. For ambitious retailers looking to grow, MDM is an integral part of any strategy.
What is Master Data Management and Why Is It Important?
Master Data Management is important because it encompasses technology and data management processes to harmonize master data throughout a business or enterprise. By creating a uniform data set, MDM allows organizations to ensure their data is accurate and consistent.
One of the most important aspects is MDM creates a ‘golden record’ of information. In other words, it’s the central data around which the enterprise functions. MDM consolidates this data into a single master record, ingesting it from various sources and applications.
Nevertheless, once the data set has been built, this master data functions as a reliable source of business-critical data. It’s then ready to be managed and shared business-wide to make trusted and accurate business decisions.
Is MDM a technology or a discipline?
The quick answer: MDM is both a technology and a discipline. To take it even further, MDM can also be labeled a technology-enabled discipline. Essentially, MDM as a discipline is heavily reliant on establishing data governance. MDM is important because it provides end-users with the tools to create master records, forming the backbone of data shared business-wide.
MDM Solutions to Consider
There are lots of MDM solutions on the market, so choosing the right one for your operating system is a delicate process. Below is a selection of leading MDM platforms for enterprise organizations:
Why is MDM Important? 7 Reasons
Working across disparate sources of information causes enormous problems for businesses. As your business scales, your problems grow. In addition, it’s likely your data model and business processes will change over time. This will cause data to become more fragmented and inconsistent. Over time, your data will degrade, causing widespread frustration. As a result of scattered data, your ability to make intelligent and savvy business decisions will be significantly affected.
Master Data Management provides businesses with a trusted source of accurate data. It’s easier for businesses to understand their products, suppliers, and customers and offer an improved experience to customers and employees alike.
Here are the main reasons why Master Data Management is important:
The best answer to ‘What is Master Data Management and why is it important’ is that, by merging data across key business areas (products, customers, vendors, employees, materials, etc), MDM systems provide a cohesive overview of business-critical data. As a result, errors and inconsistencies are eliminated.
Improved product and customer information means your sales team works more confidently and efficiently. For instance, improved data sets mean you can offer more accurate and personalized product recommendations and personalized experiences.
Say goodbye to isolated sources of data. By centralizing data and making it consistent across departments, MDM breaks down data silos, facilitating business-wide synergy.
Because MDM streamlines data-related processes, you don’t have to do as many manual tasks, such as data reconciliation. Spend less time chasing data and manually inserting it across different systems. Instead, use this time to focus on work you enjoy, such as securing sales!
MDM provides businesses with tools to meet regulatory and compliance requirements. MDM ensures transparency, reducing the risk of costly fines. This includes the EU’s GDPR, the California Consumer Privacy Act (CCPA), the Sarbanes-Oxley Act (SOX), and the Payment Card Industry Data Security Standard (PCI DSS).
Improved business agility
As your business scales, your business model will too. MDM allows you to rapidly adjust your data when necessary, allowing you to update new and existing systems easily.
Key Points: Most important aspects of MDM
In conclusion, Master Data Management (MDM) is a crucial component of modern data-driven organizations.
- When it comes to data, having your apples and oranges aligned is essential to your business’s operations, both in the short and long term. And, as your business grows, so does the amount of data you’re dealing with. This is where Master Data Management (MDM) enters the conversation.
- MDM is a technology-enabled discipline. Instilling a data-focused mindset and a robust MDM platform will get you on track to creating a ‘golden record’ of business-critical data.
- One of the most important parts of MDM is it creates a single source of truth by consolidating data from various sources. Then, this unified data source becomes the central hub of data from which the business operates. This allows departments to make trusted and accurate decisions.
- There are different MDM software on the market. To find the best solution for your business, we recommend this list by Gartner.
- MDM is important because it reduces data silos, eliminates data duplication, reduces manual processes, and ensures you’re on track to meet regulatory and compliance requirements. In real-time, your customers and employees will have a better experience, improving your brand image.
- In the long term, MDM provides the tools so you can focus your time on scaling your business. After all, that’s the aim of the game.