What is Master Data Management? and Why does your business need it?
Master data can be defined as a type of data, that can explain subjects related to the ‘who,’ ‘what,’ and ‘where’ in business transactions communications, and events. Here ‘who’ represents a customer or an employee; where ‘what’ could be a product or service, and the ‘where’ could be any location like store, office or a remote location.
Master Data Management (MDM) can be defined as a program that can ensure the consistency and accuracy of an organization’s shared data (or master data). MDM programs usually include the people, processes, and systems used for achieving this target.
In simpler terms MDM takes raw data and transforms it into an information product or, structured products that can be useful for other business processes. An ideal MDM controls Master Data values and identifiers, enabling accurate, timely, and consistent use across systems of business entities.
MDM is important for any enterprise as it can establish a single version of truth. Absence of a well-defined master data can raise the risk of having multiple copies of data that are inconsistent with one another, for organizations.
Especially MDM is crucial for larger organizations, as more and more different kind of systems work within the company, and the overhead of providing a single source of truth, as well as the benefit of having master data, grows with each additional data source.
Different Views of MDM:
- Operations Perspective:
When examined from an operation or a business process point of view, master data typically represents the transactable entities.Ex: In a typical order-to-cash process a customer purchasing a product from a store location using an asset. Here customer, product, location, asset–are all example of master data, along with the financial account and the employees.
- Analytical Perspective:
When examined from an analytical perspective, master data are the important entities that the organization tracks or examines.Usually the systems holding master data don’t have the transactional details, however they store the dimensions and attributes (i.e. master data!), that were confirmed, this data is used by analytical tools to properly aggregate and analyse the data.
- Governance Perspective:
In governance perspective master data is nothing but the entities that can be subjected to controls.While the systems that hold master, data don’t usually record the policy and governance details, they often have the entities that define the scope for the governance team.
Why MDM matter for your business?
- Valuable Asset:
Master data is considered as one of the most valuable assets for any organization, in fact a company’s value in market is determined by its data, hence data asset management is considered as a good business practice.
- Unified view of information:
While popular strategies like Enterprise Data Warehousing (EDW) and Enterprise Resource Planning (ERP) have been successful in meeting some business needs, unfortunately in many cases these strategies failed in providing a unified view of information across the organization. MDM on the other hand can helping in attaining the goal.
- Regulatory Compliance and other Issues:
It was the increase in demands of regulatory compliance, along with the awareness for consistent reporting, and the growing number of mergers and acquisitions have been pushing the organizations towards MDM.
Benefits of MDM:
- Revenue growth:MDM can increase revenue by providing consolidated source of key master data between master data entities like customers, products, and relationships.This data can help in ensuring a proper communication between businesses and customers, enabling the right cross-sell and up-sell offers are sent to the right customers at the right time.
MDM can help in eliminating IT overhead and costs and drive operational efficiencies by providing a complete, consistent, reliable source of master data across your organization.
- Supply Chain Optimization:
MDM can ensure accurate information about inventory, improving inventory management forecasting, and customer service.
This can help businesses in providing accurate, timely information for support decisions, and actions made by the applications, processes, and people that run your business.
- Customer satisfaction:
MDM can also help in accelerating loyalty and increase sales by personalizing interactions, delivering a consistent experience across channels, and tailoring products and services to your customer’s specific requirements.
- Improve compliance:
Compliance reporting and penalties related costs can be reduced by centralizing data. MDM ensures fewer vendor and product compliance issues lead to faster new product introductions and vendor onboarding.
Manage and Govern your data. FabIT’s expertise in managing data for the wide variety of industries over the years has created a niche in implementing out of the box solutions and also providing custom solutions as needed.
Please visit our website at http://www.fabitcorp.com/service/data-management for more details