Master Data Management: How It Works & Why You Need It
It is well-accepted that data should be a driving force for business decision-making, but it’s not always easy to achieve this aspiration in a practice. While sales, marketing, and operations teams could all benefit from access to data, it is often scrambled, misaligned, or complicated to use. After all, giving your team access to data is not a simple matter of, “Here’s the key to the data vault, bring it back when you’re done.” Master Data Management is the key to achieving this aspiration.
To be useful, data must be structured, managed, protected, and accessed in a way that is secure, consistent, and in alignment with business policies and goals. That’s why master data management (MDM) is crucial to your company’s strategic use of data. Master data management is a process that guides how your business and its users will centralize, organize, manage, and synchronize the most important data.
The “master data” itself may consist of information about storefronts, customers, products, or practically any other business asset, resource, or process, but it’s data that you’ve identified as important to growing your business. Therefore, the MDM strategy will help you decide how to centralize and utilize it so that your team has the opportunity to transform “dumb” processes into data-driven workflows. Here’s a closer look at how MDM informs data-driven decisions and workflows, breaks down data siloes, and how you can make it work for your business.
Why is MDM Important?
The primary benefit of master data management is that it creates transparency. An MDM strategy will help you establish a single source of truth for critical insights and data, and that source will then be used by every team across your organization. That single source of truth creates trust, and accessibility, and drives ease of access. In turn, your employees are more likely to use data in their day-to-day workflow, which improves business outcomes. Altogether, MDM drives improved decision-making, customer experience, productivity, and long-term planning.
MDM is important because it:
- Helps companies avoid siloes and inconsistencies by eliminating multiple sources and versions of the same data.
- Improves data accuracy by automating data entry and maintenance activities.
- Controls data cleanup and enrichment initiatives to ensure that only up-to-date information is shared and used by teams.
By connecting, controlling, and providing easy access to critical data from your key (and often disjointed) systems, businesses are able to improve data quality, increase data usage, and enjoy better business outcomes as a result.
MDM Best Practices
In order to unlock all of the benefits of MDM, it’s important to follow the established best practices. Here’s a look at the most important ones.
Start With Data Governance
Data governance and master data management go hand-in-hand in creating data-driven workflows, so don’t try to do one without the other. If you have not yet implemented a data governance strategy, you need to start by fleshing one out before you dive into the infrastructure that supports MDM. Once you have a data governance framework in place to guide accuracy, management, and security, you can establish an MDM that supports this framework, which will ensure compliance and accessibility in the long term.
Define Your Goals
It’s great to get all of your data in one place and know that it’s reliable, but what does that actually help you do? You cannot expect data governance and MDM to work their magic on their own. You must establish business goals in order to drive adoption and usage and track its success. For example, you may want to use MDM for segmentation and customer conversion, customer experience and retention, customer support and success, fraud prevention and security, reporting and compliance, process measurement, monitoring, and improvement, or a variety of other initiatives.
Include Multiple Sources
The biggest mistake businesses make when launching an MDM strategy is failing to include as many sources as they can. While some sources should be excluded if they are deemed irrelevant or redundant, there are very few business problems that can be solved with information from just one or two sources. Your ERP, CRM, OMS, SCM, and other platforms can all serve as rich data sources for your MDM, ensuring that each team will have access to relevant insights all in one place.
How to Get Started with MDM
Are you interested in learning more about how MDM can transform your business decision-making, operations, and support processes and improve outcomes? Aezion’s data management experts can help you take the next step. Contact us to schedule a consultation today to get started.