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What is Master Data Management?

 

Your essential business overview to MDM

The following overview explains everything you need to know about MDM and how it brings your data together to create a single, accurate view of your data throughout your enterprise.
Table of contents:
1. Introduction 2. Benefits 3. The Cost of Poor Data 4. Role of MDM 5. Use Cases 6. Master Data Types
7. Strategy 8. MDM Domains 9. Capabilities 10. Keys to Success 11. Considerations 12. Trends
 
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Master Data Management Introduction

MDM is a connected, flexible and scalable platform that provides the efficient management of master data, giving you a single point of truth for business-critical data. It supports business initiatives through identification, linking and syndicating of information across products, customers, stores/locations, employees, suppliers, digital assets and more. 

MDM overcomes three primary challenges – and many more – that you may be facing today:

1.Data silos and multiple versions of your data.

2. Data errors that result from manual entry and maintenance.

3. Dated timeliness, including not knowing which elements of your data you can trust.

Master Data Management Benefits

MDM connects and shares data from all your systems, including ERP, CRM, E-commerce and more. It allows you to create a 360-degree view of your data. You’ll learn everything from the buying history of your customers to product availability and supplier interaction.

MDM allows you to:

Focus your product, service and business efforts on the things that increase sales.

Deliver a highly personal service and engagement experience.

Defocus from unprofitable activities that drain time and resource.

What underpins these benefits is that Master Data Management enables you to:

Eliminate silos of master data that exist in different departments or business units.

Improve operational efficiency by aligning organizational and operational data.

Increase collaboration between internal and external groups.

Enhance the customer experience by using insights to drive business performance.

Save resources by automating a number of essential data processes.

Reduce risks associated with regulatory compliance such as the GDPR.

Master Data Management Defined

Master data management is the core component used to manage, centralize, organize, categorize, localize, synchronize and enrich master data according to the business rules of the sales, marketing and operational strategies of your company.

Master data can take the form of product, customer, supplier, location and asset information, in addition to any information sources that drive your business. The efficient management of master data in a central repository provides companies with a single authoritative view of information and eliminates costly inefficiencies caused by data silos.

Master Data Management and the Cost of Poor Data

As your business grows, your IT landscape will become more complicated. Acquisitions, expansion into new countries, and growth in new markets can result in your business running multiple systems, applications, and technologies. This fragmented environment creates significant data management difficulties.

 

Research from Ventana discovered:

  • 46% of organizations that do not have a single source of product information use spreadsheets.
  • 47% of those said that they find product-related errors frequently. And for 19%, those errors have a major financial impact.

 

Another report from ‘Demand Gen’ revealed:

  • Nearly 85% of businesses said they’re operating databases with between 10-40% bad records.
  • 62% of organizations still rely on prospect data that is 20-40% incomplete or inaccurate.

 

According to Ovum research:

  • The staggering cost of poor data is at least 30% in revenue.

 

MDM provides an organizing approach to data management and increases the value of your analytics and the quality of your data. It connects information, people and processes to help you meet business objectives, as well as validates data, improving the quality and integrity of data.

A World Without MDM

 

A World Without MDM is a strange place indeed. A place where the things your customers order are not always what they get, where you’re often bombarded with the same offer multiple times and where sometimes there’s a mix up with your products …

 

 

What Is the Role of Master Data Management?

The role of Master Data Management, is to remove silos and place, manage, share and correct your data from one place. The results include:

1.Launch products up to 4X faster.

2.Reduce refunds and customer service queries.

3.Slash your marketing costs by up to 50%.

4.Reduce supply chain complexity.

5.See all your customer information from every source at a glance.

6.Improve operational efficiency.

7.Target customers with more effective marketing and sales promotions.

8.Free up resources to focus on adding more value in other areas.


The more control you have over your data using MDM, the more power you have to meet your business objectives.

Master Data Management Glossary

PIM, DAM, CDO, data enrichment, matching and linking ...

Not quite sure what all those abbreviations, terms and hypes mean and how they relate to Master Data Management? Get your MDM facts straight in this A-Z of MDM.

Master Data Management Real-World Use Cases

 

You may be experiencing a number of scenarios that spur you to consider an MDM solution.

Your data is scattered across multiple geographies, departments and domains.

You want to identify inaccurate data and clean it to gain a single view.

You want to store your clean master data in a data warehouse so it can be interrogated by business intelligence tools.

Your data related processes are slow and very resource demanding.

Take the below scenario encountered recently by Kraft-Heinz.

They needed to ensure their internal systems and external websites had the same detailed product information, which was a challenge, given they had 22,000 products, more than 23,000 images, and over 200 brands. In addition, new produts or data had to be added automatically to multiple systems.

 

 

22,000
products

More than
23,000 images

Over 200
different brands


They implemented an MDM solution to integrate their product and nutrition information, including images and marketing materials, and gain a timely, complete and reliable source of information. The MDM-based single information source is now used by all Kraft Heinz's internal business systems and external websites, as well as by third parties such as Amazon, Walmart and others.

“Excellent knowledge of Master Data systems, including PIM, and able to amplify the benefits for our company.”

- Wayne Phillips, Ecommerce Systems Manager, The Kraft Heinz Company

Master Data Types

 

Master data is a single source of common data, but there are many distinct data types, and often they are duplicated across the business and stored with little agreement on standard definition. According to The Informations Difference's MDM Landscape report, 25% of organizations have 15 or more data repositories. MDM resolves disparate and duplicate data issues, allowing you to manage and govern multiple data types.

Customer data

CUSTOMER DATA

Perhaps the most common type of master data is customer records, which include names, email, postal addresses, and customer preferences. 

Customer data fuels the creation of amazing experiences, which have the potential to increase customer satisfaction by as much as 20%.

LEARN MORE

CUSTOMER DATA

 
Product Master Data Management

Product DATA

Description, cost, unit of measure and image are examples of product data that help your customers make informed buying decisions.

Studies show that giving people better product information boosts online sales from 17% to 56%.

LEARN MORE

Product DATA

 
Supplier master data management

Supplier DATA

You can view all elements of your supply chain using an integrated, accurate, and up-to-date view.

It results in greater control, closer relationships and an improved supplier and product onboarding process.

Supplier DATA

 

Party DATA

Recording party data allows you to create the relationships that are vital to gain an accurate understanding of the value of each of your records. It gives you a significant competitive advantage.

party DATA

 

Location DATA

Location information is essential for analyzing customer purchasing habits based on geography, gaining a deeper understanding of product, store, and competitor locations, as well as improving the management of your chain of physical stores.

Location DATA

 

reference DATA

Keeping reference data fields such as country, currency and conversions up-to-date is critical because to making key business decisions, undestanding their impact on the performance of your systems and meeting regulatory compliance.

reference DATA

 

Master Data Management Strategy

 

If you want results from your MDM implementation, carry out these activities to build your strategy:

Develop a Master Data Management Roadmap

Start with the end goal in mind. This will help you define and follow a roadmap that will keep your project team focused and aligned.

The roadmap typically ties together the business case actions:

Identify the issues that need to be solved.

 

Create the project plan that includes the vision, benefits, and timeframe.

List the gaps and gap-closure strategies.

 
 

Create a high-level blueprint that extends years beyond implementation.

Establishing Master Data Management Objectives

Your first step to deploying MDM involves identifying the master data domain(s) you should target. It will define the direction, focus and ownership of the project moving forward, and help you reach the end objective in less time, with minimal disruption and at lower costs.

Master Data Ownership

You may need to identify different data owners within your organization to include the MDM project. Consider the roles of each in your new single and central data world.

Establish a collaborative stakeholder team to assign data ownership.

Master Data Management Challenges

By considering common impediments to large-scale IT projects before implementation, you ensure a fast, efficient path to success.

Stakeholder engagement

There’s a risk of MDM being seen by users as purely an IT initiative. Educate your business stakeholders on the benefits of MDM for their work.

Gaining executive sponsorship

MDM involves considerable change, therefore securing support through quick wins is paramount.

Transforming the culture

You must become a champion for a data-driven business culture. Articulate the importance of MDM to individual stakeholders, the company and customers.

Managing requirements

While gathering MDM requirements, remove unnecessary requests to avoid bad design decisions that could be difficult to reverse.

Operating to budget

With every discovery that occurs during the implementation phase, immediately assess the budgetary impact and what the change means for the business.

Keeping to time

As with any enterprise-wide IT project, things change. It’s essential to keep your plan flexible and adaptable by communicating with stakeholders regularly.

One of your greatest assets in overcoming these challenges will be your ability to communicate the long-term business benefits.

Master Data Management Domains

 

MDM extends the value of your IT investments because it integrates and scales with your other systems. MDM covers different data domains relevant to all of your business challenges.

For example, a customer master data management (CMDM) platform will help you engage with your customers and build unique one-to-one experiences. If your challenge is to get products to market faster or improve omnichannel efforts, a product master data management (PMDM) approach will work for you. For a comprehensive, holistic approach, you’ll deploy a multidomain MDM setup. Today many of the world’s largest companies select this approach because it gives them the most significant insight and ROI.

How Master Data Mangement Helps You

 

Customer Master Data Management

You can fuel your digital business and IT initiatives—and deliver experiences customers crave—by gaining a single, unified view of customers. It allows you to:

  • Increase average order size.
  • Boost customer retention.
  • Increase customer lifetime value.
  • Increase cross-sell and upsell opportunities.

With customer master data management (CMDM), you can boost your personalization and customer-centric targeting by using a reliable customer data foundation for segmentation and more. According to Accenture, knowing a customer’s purchase history makes them 65% more likely to choose you. Research also confirms that they’re more likely to pay a premium for an exceptional experience from a brand they trust.

BLOG: EXPLORING THE BUSINESS VALUE OF CUSTOMER MASTER DATA MANAGEMENT

Product Information Management

Product master data management (PMDM) brings all your data into one place to create a single approved source.

For example, the approach worked with Marks & Spencer, a British retailer, which had 585 different product attributes and eight international websites using five languages. With PMDM in place, M&S was able to:

  • Use rules to control their data: for example, clothing can't be published online until all the sizes have appropriate labels.
  • Tailor their product range for each country: if they don't have the license to sell something in a particular country, the product doesn't show on the relevant website.
  • Manage all the content in English: PMDM automatically flags products that are sold internationally, but only the text is sent for translation.
BLOG: 4 WAYS PRODUCT INFORMATION MANAGEMENT CAN IMPROVE THE CUSTOMER EXPERIENCE

Master Data Management Capabilities

 

MDM delivers core data capabilities that connect and provide information to every point in the business. You can truly transform your business strategies because you have high-quality data dispersed enterprise-wide.


MDM capabilities allow you to:

COLLECT

Combine data from isolated systems to produce a complete picture.

CLEANSE

Generate accurate, well-structured data that is easy to use in other systems.

PROFILE

Link entities to create new information.

SHARE

Collaborate to reduce inconsistencies and improve integration.

PROTECT

Know where your data is to make it easier to secure.

Master Data Governance

 

There are two things worth noting when it comes to data governance:

 

1. Data governance policies free you up to focus on achieving business outcomes.

2. A Ventana Research survey indicated that 50% of companies consider the establishment of data governance as a vital capability for product information management.

 

Without adequate data governance, an MDM project is less likely to succeed.

 

Master Data Management Keys to Success

 

Whether your organization is investigating MDM or just starting with MDM, there’s a need to understand the fundamental building blocks for success.

How to Find the Right Solution for You

Many of these factors will define the elements of the MDM solution you select:

Will the solution solve your particular business challenges?

Do you have a CAPEX budget dedicated (choose on-premise), or would you rather fund through OPEX (choose MDM in the cloud)?

Are you focused on product, customer or multidomain MDM?

Is the scope of the project local or global?

Can the MDM solution scale and futureproof your data requirements?

Is the MDM solution flexible and does it have a broad set of data integrators?

How to Achieve Master Data Management Success

The more you understand the complexities of your business challenges and needs, the more deliberately you can begin to choose your master data management solution. To help, here are 7 steps to making your MDM project a success:

Master Data Management Key Considerations

 

After you’ve built your strategy, but before you embark on your MDM journey, take into account four considerations:


 

1.
Build the business case

Since there are many stakeholders and factors involved in any large-scale IT project, the below guide will help you build the business case.

2.
Align with your mission

Consider how your plan aligns with the purpose of your business. You should also develop your roadmap to highlight the obstacles you need to overcome.

 
 

3.
Choose the right approach

Consider the available delivery options. For example, you could take a linear path that moves through phases or an agile approach that’s more iterative.

4.
Quantify business value

Consider what success looks like to you and establish clear, attainable metrics to track and measure results.

 

What Next?

 

Want to learn more about how the value of MDM solutions designed for your industry and business needs?
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