How you can realize a data-driven business with Master Data Management
In the past, it used to be the ‘IT guy’ who was responsible for storing data. Nowadays almost everyone in an organization deals with data in some way. If you want to be able to make good reports, find customer data quickly or execute financial credit checks, you must be able to rely on accurate and complete company information. But who takes ownership of the data? Or what’s the most efficient way to manage data? Master Data Management provides the answer to these questions.
More than a buzzword
What is Master Data Management?
Master Data Management: it seems like a buzzword, but the term is slowly gaining popularity in the business world. On Google Trends, for example, there has been a significant increase in searches for related terms on “Master Data” in the past 10 years * (see figures 1 and 2). But even if you search on LinkedIn, the number of profiles with the job title “Master Data Manager” consists of millions of users.
Figure 1. Google trends – worldwide – 2004-present, keyword ‘Master Data’
Figure 2. Google trends – worldwide – 2004-present, keyword ‘Master Data Management’
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Datamanagement as a new discipline
How to define Master Data Management?
Master Data Management is a system, method or discipline with which you organize information management and business processes in such a way that all data in your business operations and IT is complete, accurate and consistent. Data management is becoming increasingly important in our information and technology-driven world, where data is no longer stored in one place but is managed both locally and in the cloud and is also used by different people on different devices. Just think of all departments that deal with data in your organization, such as finance, sales, marketing, administration, customer support, and compliance. Data is about customers, prospects, suppliers, citizens, employees, sites, accounts and more. Data is everywhere and everyone works with it.
Master Data Management is based on the principle that everyone within (and sometimes outside) your organization has access to the same, up-to-date information (the “single version of the truth”) from a centralized database. It is often used as a synonym for information management or database management. With the right, synchronized Master Data one can make better decisions, strategize, make analyzes and make predictions about the future. Data is, in fact, the key to success for your company.
Master Data Management leads to more productivity, focus on your core business and ultimately profit.
Relevance and necessity
Why Master Data Management?
The use of data has increased enormously in organizations. 90% of global data has only been collected in the last two years, according to a Forbes survey. Yet we have very high standards for this data. It needs to be up-to-date, accurate and accessible to everyone.
You also need data to be able to provide the most basic but critical answers about the performance (KPIs) of your organization. Organizations that have insufficient knowledge of data, or that do not have this data in order, face a major challenge. Take a look at one of the following reports:
- Big Success With Big Data – Accenture
- Forbes startling report on the amounts of data we produce every day
A recent interview with Master Data Specialist Kunal Doerbali shows how many organizations barely have their data in order to be able to support their processes.
“I have seen some extreme examples. There was this financial institution where onboarding a customer costs as much as 16,000 euros. This was due to the many checks that each department has to comply with, which costs a lot of time and money. That immediately outlines the need to start with the basics, so with your Master Data, having one truth in all your systems.”
Forecast of Statista on expected worldwide revenue from Big Data from 2011 to 2017 (in billion U.S. Dollars)
An case from the online retail world
Big data is big business
A good example of the quantity of data that is being exchanged nowadays can be found in online retail. A customer who orders a product online receives a confirmation of his or her order almost immediately, can pay online directly, subscribe to the newsletter and track the package sent online until it is delivered to his/her doorstep. The customer data that is exchanged during this process touches different departments of an organization: finance, logistics, marketing, and customer service. Moreover, all that data helps to increase customer insights: from buying behavior to preferences that help you predict how you can get more revenue from your customer base.
Data, therefore, has relevance when it comes to different systems, software, processes, and different people. But it’s a big challenge to streamline all that data.
Integration and centralisation
Datastreams keep increasing
How can you ensure that everyone has the same up-to-date data so that they can continue to make important informed decisions based on that data? How do you link all the data together? Who takes ownership of the growing data flows within a company? The answer often lies in managing your Master Data.
Enriched and error-free
Master data: from manual data entry to atomisation
Human errors are often made when manually entering data into systems. Research even points out that no less than 33% of your data is unusable. 100% accurate data in your CRM is a very unlikely scenario. In fact, due to the dynamic business community and the ever-changing complex legislation (such as the GDPR), the shelf life of your data is becoming shorter and shorter.
A 2008 IDC report estimated that human error costs companies in the US and the UK £ 315 per employee per year or $ 18 billion per economy. According to an even more recent report from Australia from the same agency, the cost of human error in Australia was estimated at an average of $ 650 per employee per year.
This complexity and speed and increasing costs require an adaptive system with which you can keep up with these developments. A system that lets you keep your data up-to-date and even enriches it. Master Data Management is the starting point for achieving uniformity. Not only to save time and money but especially to become more effective in your business operations and to get even more out of your data.
Connection to your CRM
Master Data Software
Managing your Master Data is a time-consuming job and can be tackled in various ways. You want to make sure that it’s easy for everyone in the organization and is automized as much possible, so that as to reduce errors. This process requires smart digital applications.
With Master Data Management (MDM) Software you can control this, link your master data from different systems to each other (such as your CRM, CMS, ERP, PIM and other software or databases) and manage Master Data centrally.
CRM is often the most logical place to manage your Master Data, because a lot of customer data is entered there and, moreover, often is provided with worldwide software support. But it can differ per organization what the software architecture should look like for managing Master Data.
For example, the Olbico Master Data Platform provides an MDM software solution that cleans CRM, enriched with global then monitors business information and the data 24 hours a day. This way, companies always have up-to-date, validated business data without anyone having to update CRM manually.
Kunal Doerbali, Master Data Specialist says in his interview :
“How you set up your software architecture for Master Data Management is really tailor-made. It depends on the complexity of your processes, dependencies on other parties and the technical feasibility. “
Defining your Master Data
Data fields and metadata
In addition to MDM software, determining the definitions and assigning categories of your Master Data is also relevant. You have unstructured data, transaction data, product data, customer data, geographical data, contact details and this is different for each organization.
To manage your Master Data, it is important that you determine which fields are or are not relevant to your organization. After all, it takes storage space and time to ensure that these fields all stay up-to-date. In addition, metadata (data about your master data) helps determine how fields are categorized or displayed.
Who manages all this data?
Meet the 'Master Data Manager'
The Master Data Manager is often the designated person to monitor the processes surrounding Master Data, to help determine the software architecture or to be able to participate in decisions about data governance policy (responsibility for who manages the data and monitors quality). Do you want to know more about these roles? Then view the page about the Master Data Manager.
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