Five great reasons why you need Master Data Management (MDM)
Let’s break down the components of Master Data Management (MDM).
First, we have master data. It’s a set of identifiers that provides business context to your core data such as materials, products, employees, and customers.
Unlike transactional data, master data doesn’t rapidly change. Yet, master data can still be part of a transaction. As an example, a sales transaction would involve customer master to retrieve their delivery address, payment terms, etc.
Let’s move on to the umbrella term itself. Master data management (MDM) is a technology-enabled discipline for the creation, updates, consolidation, and viewing of core data identifiers (i.e., master data) via centralised access.
It’s the glue that binds data together, ensuring consistency across the system landscape. It prevents you from getting the wrong, outdated view about the state of your business and operations.
Data governance is the main component of master data management (MDM). It prescribes the rules, policies, access, and standards of data with the ultimate goal of ensuring data quality and making it fit for user consumption.
You may hear a lot about companies wanting to achieve a single version of the truth via the deployment and practices of MDM.
This may dilute the awareness of the business benefits, making it harder to convince people to jump on the MDM bandwagon.
Here are 5 main business benefits that you can dish out to your colleagues and bosses to demystify the real reasons for implementing master data management (MDM).
1) Establish trust in data
With master data management (MDM) in place, people will become aware that data governance and data quality efforts are taking place and they can begin to have trust in data.
And what happens when people start to trust data? They’ll have no qualms in using and presenting data during meetings and discussions, leveraging data to perform analysis and derive conclusions, and demanding colleagues to use data when bringing forth ideas or arguments. They’ll have the healthy behaviour of utilising and incorporating data within their job functions.
It’s also easier to sustain the practices of data ownership and accountability—a prerequisite for building a data-driven culture in your organisation.
2) Drive better decision-making
Relying on ‘gut feel’, seasoned employees’ opinions, or past experiences to make strategic business decisions is a thing of the past. Modern enterprises would know better to use data in driving well-informed decision-making.
With consistent and reliable master data that provides the context, you’re in a better position to zoom into the content and perform analysis that provides the insight needed to decisively chart your next course of action. This future-proofs your strategic directions and gives you a competitive edge.
3) Manage exponential data growth
With the influx of data from both internal and external sources, your data repository will grow in no time. And it becomes more urgent to filter into the data you need, eliminate duplicates, and ensure consistency across systems.
Without a system to manage and govern it, you’ll be buried in a useless avalanche of data. This is where master data management (MDM) can help.
4) Leverage advanced technologies
Advanced analytics has become more prominent in recent years for use cases that require foresight and predictions such as predictive maintenance, asset performance, and customer buying patterns by leveraging the latest technologies.
Let’s take predictive maintenance as an example. IoT components collect sensor values from different machines and run algorithms on them to predict impending failures. But if the master data for the equipment is wrongly maintained or incomplete (e.g., part, model number, maintenance plan), you’d end up having to do massive rework involving repetition of the whole cycle of maintenance planning, reordering, etc.
Another business case is using machine learning (ML) to determine customer buying decisions for targeted marketing. A plethora of customer data points are needed to train the ML models. Again, if the data is fraught with fundamental errors like duplicates in addresses and names, the ML models could give erroneous foretelling that leads you to ‘hit-or-miss’ marketing.
That’s why master data management is needed to provide high-quality master data to get maximum returns from your investments in advanced technology applications.
5) Improve and enhance business outcomes
Bringing them all together will lead you to the big WHY of implementing master data management (MDM).
Once you’re able to incorporate consistent, trustworthy, and high-quality data in your day-to-day operations, decision-making, and innovative applications, it will manifest in the achievement of your strategic goals.
For example, if you have standardised and accurate supply chain data that consists of material, supplier, and asset masters, you’ll gain better visibility of the interoperability and correlation with each of the datasets. This improves efficiency and cut down wastage where you can identify and eliminate duplicate materials, improve strategic sourcing, and maintain relationships with high-performing suppliers. This will realise your goal to drive down supply chain costs, thus improving the overall bottom line.
Imagine the impact of other master data areas that support the rest of your goals.
That’s why it’s worth tying the master data areas with the goals you want to achieve at the start of your master data management (MDM) deployment. Soon, it’ll be clear to everyone the crucial role of master data management in improving and enhancing business outcomes.
MDO—Your go-to Master Data Management (MDM) solution
Now that we’ve unearthed the benefits of embedding master data management (MDM) within your organisation, you need to find the right technology platform to support and execute your master data management and governance initiatives.
You can consider MDO. MDO doesn’t just automate and simplify your master data processes—it helps you standardise and govern your data, harnessing it to achieve your strategic goals.
MDO supports industry solutions and seamlessly integrates with various systems, whether they’re on-premise or in the cloud.
Key features include:
- Pre-defined data models, business rules, and workflows
- Active and passive governance framework
- Self-service capabilities for data stewards/business users
- Integration adapters to connect to multiple source systems
- Roles to delineate ownership and implement governance policies
- Logs and audit trails with enhanced security features
- Taxonomy management in alignment with industry standards like UNSPSC and ISO14224
- Workflows for approvals to support automation and rules-based approach
MDO is your go-to MDM solution that provides the foundation for data culture where your people have complete trust in data to execute daily tasks, collaborate with one another, and drive decision-making.
Author: Shigim Yusof