Organisations big and small are recognising the importance of data as the cogs that run their business. With this awareness, conversations about Master Data Management (MDM) become more frequent.
What’s the relevance of managing master data in this scheme of things? Master data management is a technology-enabled discipline that handles master data creation and changes, right up to its deletion and disposal. What’s more—a Master Data Management platform consolidates and merges master data from different applications to form an accurate, updated, single version of the truth. It’s the glue that binds data together such as customer, supplier, and material masters, ensuring consistency across the systems.
But terminologies, purposes, and definitions around master data management can often get diluted. This leads to misunderstanding on the correct way to approach and apply Master Data Management. And it’s mutated into urban myths!
Let’s go through 5 of the major myths and see if there are any bases in them.
1. Only large enterprises need Master Data Management (MDM)
People imagine Master Data Management (MDM) as a platform that unifies and consolidates master data that comes from an intricate web of systems of ERP, CRM, SCM, etc. Well, they are not wrong. As large enterprises often run on a complex system landscape, this might be where the notion comes from.
Let’s consider how small to mid-market companies manage their master data. They may have a simpler IT landscape where they use in-house solutions and manual processes for master data maintenance. When a master data changes, their app takes care of it, or the designated personnel trigger the change and update it in other systems.
Yet, as data grows and demand for data increases, their bespoke systems might not be scalable and flexible enough to accommodate all this. Mistakes and oversight become that much harder to avoid!
So, the answer is yes, Master Data Management is relevant to small and mid-market companies too. The truth is, it helps them improve existing processes and reduce human errors.
The main question isn’t whether small and mid-market companies need MDM, it’s whether they’re able to afford a Master Data Management system.
This brings us to the next myth.
2. Master Data Management (MDM) costs a fortune
As MDM is viewed as an enterprise-scale initiative, it’s logical to expect a hefty price tag. It explains why only large enterprises buy the technology as they’d have higher budgets to spend on it. Well, this may be true a decade ago when the MDM market was still in its infancy.
But now, as more vendors offer Master Data Management solutions with hosted deployment models, the competition and market maturity have cheapened the selling price. As the solution and services are hosted by the vendor itself, companies don’t have to bleed themselves dry paying for additional hardware, maintenance, and support charges.
And there’s also the matter of convincing your budget-conscious and risk-averse top management. Rather than employing a big-bang approach which can be risky and cost-intensive, you can scale your implementation to a specific use case or a low-impact master data area as a proof of concept. By proving the practicality and workability of a MDM system, it’d be easier to secure funding from top management and move on to other areas or use cases.
3. Master Data Management (MDM) is an IT problem, so IT must own it
As people begin to focus more on the operational part of managing master data and the technology that supports it, it starts to look more like an IT problem. No wonder they have this perception that IT people should drive and own the efforts.
They lose sight of why Master Data Management should be there in the first place. It’s not about managing master data. It’s the outcome that matters—obtaining a unified, centralised, and updated view of data to improve processes, reengineer business models, and ultimately increase profitability.
By recognising this, the involvement of the business should be unquestionable. Business stakeholders should get on board early on to define the requirements and incorporate them into MDM. This way, you’ll be assured of a full-fledged MDM adoption by the business to address their needs and solve their problems.
But this doesn’t mean IT can wash their hands off. They’re instrumental in enabling the technical side of the deployment as well as support.
4. I already have ERP, I don’t need MDM
Once upon a time, running your business on an ERP seemed to be the silver bullet. Your ERP platform allows you to run your day-to-day operations that encompass integral processes like accounting, finance, procurement, project management, and supply chain. With all these capabilities, it doesn’t seem far-fetched to assume that your ERP can take care of your MDM needs. Well, as the role of data becomes increasingly crucial to gain that competitive edge in this Digital Era, having an ERP alone isn’t enough!
A complete Master Data Management solution should be able to handle the addition of attributes, setup of business and validation rules, audit trails, workflow-enabled approvals, and collaboration. Essentially, all the functionalities required to automate master data creation and maintenance including the embedment of data governance and data quality.
A standard ERP doesn’t come with these capabilities. It’d be a nightmare trying to repurpose your ERP to fulfil all these requirements.
5. Deploying MDM will take care of my data, once and for all!
Now, here’s the biggest myth of all. And subscribing to this belief could possibly flush your whole Master Data Management (MDM) deployment down the drain!
What most people don’t realise is that an MDM platform only helps in the automation and streamlining of your end-to-end master data processes. But for this to work like an ultra-precise Swiss watch, a data governance framework should encapsulate it. The work includes identifying the master data areas to govern, defining the business rules, and delineating ownership.
And it doesn’t stop there! The framework should include the process of ensuring continuous data quality as your Master Data Management platform powers up with the rest of your operations. Sure, you’ll have the automation and business rules to take care of that. But your business has to evolve according to market conditions. So, there’s always the need to revisit the rules and even the whole process. This is where the ‘human’ element comes in.
Data owners do not just define the rules and the process at the start of an MDM project, they need to ensure that the rules and policies are updated to suit current business needs. So, it’s neither a dormant role nor an honorary title. The role of data stewards is more operational where they execute the data quality rules and policies as well as cleanse data when the need arises.
So, a solid data governance framework that involves the right people for governance and execution is essential in ensuring the success of your MDM implementation and its subsequent adoption by the business.
MDO—Your go-to MDM solution
Now that we’ve busted the myths surrounding Master Data Management, it’s time you check out the right technology platform for it.
One of the platforms that you can consider is 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. Its low-code framework provides an easy way to pull information from various sources to achieve a 360° view of data.
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, and drive decision-making.
Written by: Shigim Yusof