What Is Master Data Management and Why Do You Need It?
Bad data is bad for business. According to an Experian research report*, 89% of executives agree that inaccurate data is undermining their ability to provide an excellent customer experience.
An erroneous and incomplete data can hinder the process of decision making which can impact the growth of your business.
Now more than ever, business leaders all over the world have realized the importance of using high-quality information to drive business success. To meet these expectations, businesses turn to Master Data Management (MDM).
In this article, you will get to know about the following aspects of master data management:
Why do you need to manage master data?
What is master data management?
Key functions & benefits of an MDM system
According to Gartner*, master data is the consistent and uniform set of identifiers and extended attributes that describes the core entities of the enterprise including customers, prospects, citizens, suppliers, sites, hierarchies and chart of accounts.
Let us simplify this for you.
You can think of master data as nouns that typically describe your business processes. For example, parties, products and locations are all master data domains. They are the core data assets that you manage within your enterprise.
The master data domains can be further divided into sub-domains. For instance, a party domain will have sub-domains such as customer, supplier, employee and salesperson.
Now you know what is master data. But why do you need to manage it?
Organizations continue to face issues with data as they grow. They spend a huge amount of resources to prepare data and gain insights. According to Experian’s 2018 global data management benchmark report*, 91% of executives believe that preparing data for insights ultimately costs their business in terms of resources and efficiency. All these resources go to waste if the prepared data is erroneous.
Similarly, there are other data related challenges which are the reasons that you should manage your master data. They are:
- Inconsistent data across the value chain – Organizational data, in multiple versions, across functions, locations, and systems makes it difficult to ensure a single view of truth. This happens primarily due to the lack of an integrated approach to information management
- Lack of cross-domain relationships – Domain masters (such as supplier, customer, product etc.) often lack the relationships among each other. This prevents business users from gaining operational intelligence making it difficult for organizations to manage interdependent business processes
- Lack of process orchestration & data governance – Organizations struggle to maintain data integrity and security as they lack collaborative authorization of data. This makes it difficult for business users to manage and approve information in accordance with the organizational policies and processes
- Authenticity of data manipulation – Maintaining and tracking logs for previous versions of data is often a challenge for the organization which can severely impact the authenticity of business processes
You can overcome all these pain points by managing your master data as it synchronizes all internal and external systems to keep your master data clean and consistent across the organization.
Master Data Management (MDM) is the technology, tools and processes that coordinate your master data across the enterprise.
It provides a unified master data service to obtain an accurate, consistent and complete master data across the organization.
A master data management solution must have a Multi-Domain characteristic. The relationship between domains empowers business users to gain operational intelligence and improve decision making.
- Provides seamless information across multiple channelsAccurate product data is critical to differentiate your business and provides customers with a dynamic and personalized shopping experience.Product Information Management (PIM) helps businesses manage product data from multiple sources.It creates a master catalog of validated, high-quality unique product data for efficient distribution to all sales channels, whether data is structured or unstructured.
- Helps understand your customer betterCustomer data management helps organizations maintain a single view of all customer data. It synchronizes customer information across systems and the organization’s information supply chain.
- Provides a unified view of your mastersMDM software helps create reliable views to drive operations efficiently with a complete view of all your data assets.It enables the creation of an integrated view of products, customers, suppliers, materials and other data sets. Currently, this data may reside in silos with different departments and units.
- Increases trust in your dataPoor quality data can have negative effects on customer relationships, business decision making, and forecasting. MDM system provides high-quality data for quality decision making.
- Connects everything & anythingWith business information residing in multiple systems and in multiple formats, information users have to duplicate efforts by going through information from multiple systems and combining data together.MDM’s data integration tool helps to combine data with multiple format attributes from disparate data sources. It delivers a single unified view of all your data instead of data in silos.
- Increases accountability of your dataMDM’s master data governance feature can easily govern your organizational data for accuracy and accountability. Data governance brings business users in the implementation lifecycle and provides an effective mechanism to manage and author data.
As organizations grow organically or through acquisitions, they often struggle with ensuring a single view of truth across their data. This happens primarily owing to manual data management, lax controls, multiple systems and lack of an integrated approach to information management.
A feature-rich master data management system helps you to create one single master reference source for all business-critical data, leading to fewer errors and less redundancy in business processes.
Vinculum’s Vin MDM is a multi-domain master data management solution that synchronizes all your systems to keep your master data clean and consistent across the organization. It helps you drive actionable insights from the data to adapt to ever-changing market conditions and explore new possibilities for revenue growth. See how you can achieve all this through our cloud-based MDM solution.
*Experian – 2018 global data management benchmark report
*Gartner – Master Data
An MBA marketing graduate from IIM, Akash Jain works at Vinculum group, where he manages product marketing, content and social media marketing. An ardent learner of new things, he is passionate about scaling up marketing operations, implementing new-age marketing automation and customer psyche.
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