The Increasing Importance of Master Data Management for Your Business: A Primer
The modern enterprise is composed of a variety of systems, each of which holds data the company needs to conduct business: information about products, services, suppliers, customers, and more. This is the master data, and master data collected by these disparate systems is often stored in multiple locations—independent from other systems’ data—and changes made in one location can take time to be reflected in other systems.
Sometimes, this is a result of organic growth. Other times, it’s the result of a merger or acquisition. But whatever the reason, and no matter how many data sources or systems are in play, master data management is important to a business’s success. That’s because data silos create disconnected, inaccurate, and unreliable data sets that your organization relies on to drive business decisions. Clearly, that’s a problem.
Missing data – or data that’s of poor quality – results in choices that can lead to the failure of an initiative or an entire business. That could include wasted marketing efforts, ruined customer experiences, missed opportunities, or decreased compliance. Productivity, revenue, and customer trust may all suffer eventually due to poor data quality
This is where master data management comes in.
At the most basic level, master data management is about getting the data right before it breaks something. Master data management is also a way of ensuring there is “one version of the truth” for a business’s most critical data. Things like products, vendors, suppliers, partners, customers, employees, and materials are all forms of master data. Typically, master data is unique and separate from transactional data. Master data management is accomplished using a set of processes and software technologies to create, update, delete and distribute these data elements across critical business systems.
When you embark on the journey of master data management, your main goal is to create a single source of truth for your organization’s most critical data and the processes for maintaining it. This means bringing together data from marketing, sales, supply chain management, manufacturing, and any other processes related to the entities listed above and making that data available as a single point of reference for every domain and business system.
When master data management is successfully implemented, the benefits realized can include:
Despite all the seemingly obvious benefits, many organizations are still struggling with data management. One of the biggest reasons for this is that there’s a lot of change management needed to implement master data management.
What often happens is that someone in a company will decide to implement a new master data management system, meaning they’ll put in all the rules and forms for creating, updating, and deleting master data, and then put the new system in front of users and say, “OK, use this.” But then things stop – suddenly the users realize they don’t have all the required information, or they do not understand how to properly interact with the system, causing delays in getting it right.
