First, let’s go back to basics.
What is Master Data? In simple terms, it’s a set of identifiers that provides the business context to your core data areas such as assets, products, and customers. These datasets are usually shared across the business. Still vague? Let’s compare it with transactional data.
Transactional data describes business events at any point in time, thus it changes frequently. It consists of both monetary and non-monetary transactions like sales, invoices, deliveries, and claims.
Master data is almost always involved with transactional data. As an example, a sales transaction would involve the usage of customer master to retrieve their delivery address, payment terms, etc.
Master data management (MDM) then refers to the creating, organising, updating, and viewing of master data via a central point of access. It prevents you from getting the wrong, outdated view about the state of your business and operations.
This explains why companies need a Master Data Management system.
Essentially, it helps you automate the creation of master data through to its disposal. More importantly, it consolidates and merges common master data attributes to form a single version of the truth. It’s the glue that binds data together, ensuring consistency across your system landscape.
Of course, you can’t simply choose any Master Data Management (MDM) solution in the market. There are key criteria you’ll need to consider to ensure you get the most out of your Master Data Management investment.
The list below will help you get started!
What factors to consider when choosing an MDM platform?
1) Flexibility in handling various master data domains
No doubt, you’d need to organise and streamline master data covering different areas of your business. You’d do well to select a multi-domain Master Data Management (MDM) solution that can cater to various master data areas like suppliers, customers, assets, and products, spanning across industries.
The solution should be flexible enough in handling unique requirements that come with different master data areas. For example, to comply with industry best practices, it’s recommended to standardise your asset and material masters according to ISO14224, a taxonomy for the collection of reliability and maintenance (RM) data for equipment in facilities.
2) Data quality assurance
Having a unified view of data would be for nought if the quality of data isn’t maintained. In the long run, you’ll accumulate GIGO, or ‘Garbage In, Garbage Out’ in your system. Imagine when garbage gets fed into your analysis and decision-making. It can have damaging consequences for your company!
Your Master Data Management (MDM) of choice should have a data quality layer that checks and remediates data based on agreed-upon business rules. It should have:
- Active governance that validates new data as it enters the system
- Passive governance that validates and cleanses existing data in the system, triggered by changes in business/validation rules.
This ensures continuous data quality.
3) User-friendly interface
Various business units would need to manage and maintain master data. Hence, the Master Data Management (MDM) system needs to have an easy-to-use, intuitive UI that allows even non-technical users to create data models quickly. This includes defining business rules and validations that they will no doubt have more familiarity with. One way to do this is by providing drag-and-drop functionalities to create and modify processes, workflows, and rules.
This improves user experience, hence encouraging better adoption of the system and the process. Failure to have this will make your Master Data Management (MDM) deployment fall flat in its face with a lukewarm reception by the business people.
4) Collaborative framework
Working in siloes to manage master data is counter-intuitive as you’d risk obtaining a fragmented view of data—not the goal of having a Master Data Management (MDM) system in the first place!
That’s why you need to choose an MDM tool that facilitates collaboration. It should have workflow capabilities to define inter- or intra-team tasks like master data approvals. This ensures governance too as you’d have control to involve the right authority in the approval process.
It’s also best to enable external collaboration. One relevant scenario is that you can communicate directly with your supplier to verify their credentials as entered in the supplier master.
5) Integration with other systems
As you’d have multiple systems like ERP, SCM, and CRM to run your business, the Master Data Management (MDM) solution needs to integrate seamlessly with them. To put it bluntly, it shouldn’t take a full-fledged project and lengthy codes just to establish connection with your existing systems.
Through this integration, you can access an accurate and updated view of master data information from each system with no risks of data discrepancies or operational disruption.
Your top management could be risk-averse and will question the viability and importance of implementing a Master Data Management solution. To gain their support, you can opt for one that is scalable. This allows you to start small on a specific use case or business unit and ensure your budget doesn’t spiral out of control.
By developing a tangible Master Data Management process and proving its workability, it’d be easier to justify the cost vs. ROI to your top management. Through the knowledge and experience gained, you’re in a better position to extend the implementation to other business units or master data areas.
Companies can’t run away from audit and compliance requirements. Ignoring or failing to comply might lead to penalties or worse—lose your license to operate!
That’s why you need to ensure your chosen Master Data Management system can record and store job logs and audit trails. These can be retrieved easily when the auditors ask for them. This way, you can avoid wasting time and resources on manual audit preparation which is more error-prone and can invoke more scrutiny.
8) Self-service analytics
It’s easier for people to visualise and analyse the data if it’s presented in graphical forms. To this end, your chosen Master Data Management (MDM) tool should provide analytics capabilities like dashboards, widgets, and dynamic graphs and charts. And the interface to build analytics should be easy to use, even for those with a non-IT background. Essentially, your Master Data Management solution should support self-service analytics.
You’ll be better equipped to view master data status, monitor data-related KPIs, and understand the data issues at hand (if any). This lets you gain valuable insights that inform your next course of action.
With these functionalities offered by the Master Data Management (MDM) system, your business users are empowered to perform self-service data exploration and discovery without relying too much on IT. This allows them to be more effective and productive in their job functions.
How can MDO help?
MDO provides a holistic Master Data Management solution encompassing data quality, cleansing, and governance. It’s a cloud solution that helps you implement at scale and better manage your budget. More importantly, it helps your data owners and data stewards operationalise your governance strategy to increase data adoption amongst your people and ensure continuous data quality.
Key features of MDO include:
- Pre-defined data models, business rules, and workflows
- Active and passive governance capabilities
- Self-service business intelligence and analytics 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 rule-based approach
It’s a one-stop Master Data Management platform that lays the foundation for a data culture in your organisation where data becomes a valuable asset that helps you achieve your strategic goals.
Through MDO Master Data Management system, you can quickly realise your benefits and ROI by having a ‘golden record’ view of the master data. Advantages like better-informed decision-making, improved efficiency, and increased revenue will be within your reach.
Written by: Shigim Yusof