Data management for businesses keeps growing in essence and adoption. More efficient ways, including master data management, have emerged over the years. Among all innovations in data management, MDM is relatively new and may require more information to understand and appreciate its benefits. Here is a complete guide to master data management.
Master Data Management Defined
Master Data Management (MDM) is a relatively new technology-enabled data discipline. Some of the earliest MDM deployments date back to the 90s. Companies that had adopted data for operational efficiency were experiencing a new phase of data governance, such as the enforcement of the Sarbanes-Oxley Act.
The data management realities of those times heightened the urgency of MDM technologies. Today many companies leverage MDM technologies for their data stewardship efforts. But master data management is rapidly growing in the data management landscape. There are now use cases for business mergers and acquisitions.
Generally, data management is a more accurate and uniform way of managing a company’s master data. In data management, master data refers to a set of essential data points and extended attributes accepted by a company’s executives. It can include customer data, business processes, product data, etc.
A business entity’s master data can be stored using a central repository. This repository can either be built on a single source system or obtained from multiple data sources like unstructured data, metadata, etc. Some other common master data management sources include transactional data, reference data, and hierarchical data.
How it Works
Many people are getting to appreciate the general benefits of MDM. However, only a few understand how MDM technologies work. For an MDM project to be successful, it may need to go through the following stages:
- Defining your master data sources
- Identifying the producers and consumers of your company’s master data
- Collection and analysis of metadata
- Determining your data stewards
- Instituting a data governance council to implement your data governance program
- Developing a model for your master data
- Choosing a toolset and designing an infrastructure that can accommodate your applications
- Generating and testing your master data project
- Evaluate and make adjustments if necessary
- Develop a maintenance routine for your master data project.
Benefits
Generally, the benefits of MDM for businesses are endless. Some of the more specific use cases include:
1. Productivity and Efficiency
Master data management affords data professionals a cost-effective approach to managing data sets. Businesses can manage complex relationships across products, vendors, locations, and customers with more control. All these can help reduce IT overhead costs. Also, a business’s master data management program can provide access to reliable data across all customer touchpoints. So that businesses can increase revenue through personalized sales offers for customers.
2. Customer Satisfaction
Beyond MDM’s promise for data quality, it can also help improve customer experience. Using an MDM solution affords businesses the flexibility in dealing with customers on their individually preferred channels. This helps tailor and personalize customer interactions which is a major focus for CRM today.
3. Supply Chain Optimization
Supply management involves a company’s efforts to improve supply chain performance using technology. With an MDM strategy, companies can address supply chain and logistical bottlenecks more efficiently. Master data management’s capability to integrate data silos helps provide a bird’s eye view of a company’s total inventory. With this, a supplier can determine when they run out of new products and quickly restock.
4. Real-time Data
At all times, modern companies seek to improve data access while ensuring maximum security. MDM and analytic solutions can help generate and publish data on demand without compromising data security. Accessing data in real-time and ensuring data security has become more essential today. Now more than ever, modern businesses need to stay agile in scaling the limitations presented by COVID-19.