Thousands of businesses today, especially medium and large, generally use dozens of separate systems and applications like CMS, ERP, and CRM from where the data is collected.
This data, however, often becomes fragmented, outdated, and even duplicated as there is no proper data management system in place. And as a result, finding answers to the most basic questions like “which products have the best margins” or “how many employees we have” sometimes becomes hard to answer.
According to a report by Experian research, 89 percent of professionals admit that inaccurate data is largely affecting their ability to provide a satisfying customer experience.
In other words, as the sources and volume of data rise, managing the data accurately has become extremely challenging for the majority of businesses.
In fact, such high-volume and mismanaged data can also hinder the process of decision making, which ultimately affects the growth of your business.
So now, the important question is, how businesses can overcome this data management challenge?
Answer: Master Data Management!
In this blog, you’ll learn what is master data, why should you manage your master data, what is master data management, and the key benefits of master data management for your business.
With that being said, let’s dive right in!
What is Master Data?
Master Data is basically the uniform and consistent set of extended attributes and identifiers that describe all the core entities of an organization, which usually includes citizens, prospects, customers, suppliers, sites, and chart of accounts.
For instance, let’s say that there is a business with an ERP system. This ERP system will usually have at least an Account Master, Item Master, and Customer Master data lists. And, as you know, these master data lists are key assets for a business.
So, now that you know what Master Data is, let’s move forward and see why you need to manage your Master Data efficiently.
Why Should You Manage Your Master Data Properly?
Nowadays, businesses are spending a huge amount of money on collecting data and gain valuable insights.
But if the collected data is erroneous, then all the money, efforts, and resources spent will go to waste.
For instance, let’s say you’re a credit card provider company and one of your credit card customers changes her address from 2021 North 7th street to 1005 North 9th street.
The customer has also already requested to change the billing address immediately but she did not receive any upcoming bills. And after a few days past the due date, the customer receives a threatening call from the credit card bill collection department asking why the bill is not paid on time.
The customer then verifies that she changed the billing address but she has not received her latest credit card bill. She then also asks to share a copy of the bill so that she could settle the account.
In this case, the Customer Master data was accurate, but the Customer address data was flawed. And due to this, your credit card company might lose a customer for life.
The point is, it is extremely crucial to manage the master data effectively and effectively.
So, now that you know the importance of managing your Master data, let’s move forward and see how integrating a master data management solution could help to avoid such incidents in your business.
What is Master Data Management?
Master Data Management is basically a combination of tools, technology, and processes that coordinate all your Master data accurately across your business.
In other words, it provides you with a unified version of all master data so that you can obtain accurate, real-time, complete, and consistent master data across your business.
If you’re planning to integrate a master data management solution, then the first thing you need to know is that it must have a multi-domain characteristic.
This will help to gain valuable intelligent insights, which will effectively improve the decision making in your business.
Key Benefits of Master Data Management for Your Business
As your business will grow, you’ll soon start struggling to have a unified version of data. This mainly happens due to having multiple systems and applications, a lack of an integrated approach, and manual data management.
A Master Data Management solution, on the other hand, can help you create a single master source where all business-critical information can be stored and retrieved as and when needed.
And as a result, it leads to less data redundancy and fewer errors.
That being said, let’s take a look at the key benefits of Master Data Management in detail.
Benefit #1 – Provides a Unified Master View
Master Data Management solutions are capable of helping you create unified and reliable views for all your data to drive business operations effectively and efficiently.
In simple words, MDM can help you create an integrated view of products, materials, suppliers, customers, and other business-related data sets, which is mostly to reside in silos across different departments in your organization right now.
Benefit #2 – Helps to Better Understand The Customers
With Master Data Management, you can create a Master Customer Data to maintain a single view of all your customers’ data. Apart from this, you can even synchronize the customer information across all channels, systems, applications, and the entire information supply chain to avoid errors.
Benefit #3 – Provides Seamless Information Across All Channels
Showing the same and accurate product data across all digital channels is extremely critical to provide a seamless and personalized shopping experience.
With Product Information Management (PIM), you can easily manage all your products’ data in one place and efficiently distribute it across all sales channels.
PIM can create a master catalog of your product data that your sales professionals can easily obtain from multiple sources and market them effectively.
Benefit #4 – Connects Anything & Everything
Medium and large-scale businesses often have their data stored in multiple systems and in multiple formats.
This basically increases the efforts it takes to obtain a particular piece of information, as you’ll have to go through multiple systems to verify the correct information.
But with the Master Data Management solution, you can simply combine the data of multiple systems with its data integration tool, which will create and deliver a unified view of all your business data and you’ll be able to retrieve any piece of information without having to verify it again and again.
Benefit #5 – Increase Trust & Accountability of Your Business Data
Bad data is bad for the business. It can have negative impacts on the critical decision-making process, future forecasting, and customer relationships.
But with a proper MDM solution, you can easily govern your enterprise data for accountability and accuracy using its master data governance feature.
In other words, the data governance feature of a master data management solution basically gives you an effective mechanism to author, store, and manage data.
Master Data Management: How to Get Started!
Master Data Management has certainly become a necessity for medium and large-scale business organizations to fully realize the potential business.
However, the majority of businesses still don’t know how to or where to get started with Master Data Management.
Well, there are many readymade technology and solutions available in the market today, but just like mobile app development, it’s best to go with the custom development approach by availing reliable Pimcore development services.
Pimcore is an open-source, digital experience platform using which you can easily create a customized master data management solution for your business.
With that being said, we hope that this post has helped to learn and understand what is master data management and how it can benefit your business.
If you have any questions, doubts, or queries, feel free to ask in the comment section below.
FAQs about Master Data Management
Q:1 – What is master data management?
Ans: Master data management is basically the process used for organizing, categorizing, localizing, centralizing, managing, and synchronizing master data in accordance with the business rules of operational, sales, and marketing strategies of an enterprise.
Q:2 – Why master data management?
Ans: Master data management practice actually arose out of necessity for medium and large businesses to improve the quality and consistency of their key data assets, which generally includes customer data, product data, employee data, asset data, etc.
Q:3 – What are the advantages of master data management?
Ans: The key advantages of master data management are following:
- Eliminates poor quality data
- Effective prioritizing
- Improved efficiency
- Improved decision-making
Q:4 – What are MDM solutions?
Ans: A Master Data Management solution is basically a software product that binds all systems, applications, and information together. It helps with global identification and synchronization of master data from various data sources through a semantic identification.