Why Your Business Needs Master Data Management
Despite data being largely regarded as a company’s most valuable asset, it can be unwieldy, and many businesses simply don’t have a good handle on it. Companies often employ multiple applications to store and manage data, many of which don’t share master data definitions and standards for the same entity, be it a customer, product or supplier. These companies are often at a disadvantage because they can’t create a single 360-degree view of key data assets — known as a golden record — across the enterprise.
For example: Without full and consistent knowledge of a customer across — or even within — business units, a company might try to upsell a customer on a product it already has. That identity confusion “undermines credibility and trust,” says Doug Henschen, vice president and principal analyst atConstellation Research.
As a business seeks to unite and share data assets, it must first identify a core set of data that is crucial to business operations. This is known as master data — data that has 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,” according to Gartner.
Once an IT team has identified this data, they can begin organizing it at a central point of reference. This is known as master data management, a business process backed by facilitating tools that aim to help resolve data confusion, such as errors, overlaps and redundancies. MDM processes, in concert withmaster data management tools, seek to facilitate a 360-degree view of data, arming a company with the ability to serve customers more efficiently, resolve questions more quickly, facilitate transactions with greater accuracy and generally improve the customer experience.
By taking an MDM approach and using MDM tools, IT departments can rationalize, improve and reduce costs associated with data migration and integration, says Kelle O’Neal, founder and CEO of business advisory and enterprise information management consultancyFirst San Francisco Partners. “From a value perspective, all these things help an IT department run more efficiently, with less cost for both people and systems,” O’Neal says.
According to O’Neal, a master data management tool must be able to do the following:
MDM should also make it easy to share data out of the hub, so that companies and teams can more easily tap and use data.
“It is critical to be able to easily consume it via downstream systems,” says O’Neal.
