Global enterprises today have hundreds of separate applications and systems, such as ERP and CRM, which they rely on for many purposes. Each of these systems contains critical business information about customers, services, products, suppliers, along with several other entities. Unfortunately, these enterprises often encounter fragmented, duplicated, and outdated data. This leads to difficulties in using data to address fundamental yet critical questions.
In every organization, the need for accurate and timely information is vital. With the sources of data increasing, managing them consistently and keeping them up to date has been a never-ending challenge for many businesses.
No matter how many sources or systems are in play, businesses need to focus their shift on Master Data Management (MDM) to overcome these challenges and achieve success.
What is Master Data
Master data is the core data of an organization, representing the primary entities of a business. It serves as the most reliable source of truth about a business. Master data is characterized by its accuracy, consistency, and uniformity, with minimal changes over time. It also includes reference data that is crucial to operating a business. It removes the improper formatting roadblocks that impede data sharing within an organization. All the information systems can expect to receive master data in the same format and structure.
Master data has several domains which can be subdivided further. Some of the domains are:
- Customers
- Products
- Vendors
- Employees
- Pricing
Master Data Management for Business
Master data management is a business discipline that blends both business and IT. Its primary objective is to ensure the semantic consistency, accuracy, governance, and accountability of a business’s official shared master data assets. MDM is an integral part of the enterprise data management architecture designed to help businesses get a consolidated view of the data scattered across the organization. This includes managing enterprise data across key domains.
We worked for a leading food production company to optimize their master data quality and deploy a master data management solution.
Master Data Management creates a single master record for each person, place, or entity in a business, from both external and internal data sources and applications. This information is de-duplicated, reconciled, and enriched to become a consistent, reliable source. Once master data is created, it can be shared across the business to promote accurate reporting, reduce data errors, remove redundancy, and help workers make better-informed business decisions.
Why Master Data Management is Required
To better understand why most business owners and data managers seek a Master Data Management solution, let’s first look at some common scenarios where constant changes in data and frequent manual intervention could potentially lead to faulty data being stored on company files:
1. Redundant Data
Redundancy and duplicity are common problems that businesses face because of the same data being maintained across different processes, systems, or applications for various purposes. The problem with this model is that the same data will have multiple attributes depending on who is saving it and where it is being stored.
A Master Data Management tool merges data duplicates, filters out redundant data, highlights data errors, and alerts users to delete corrupt data. This enables users to access accurate data when needed and allows them to view changes made in the data.
2. Inconsistent Data
When you try to consolidate data scattered across systems or applications, errors and inconsistencies are likely to appear. The biggest challenge here is that data discrepancies can lead to loss in revenues and brand value and even invite legal action in some cases.
Master Data Management deals with data redundancy, data duplicity, and manual errors. It gives structure to scattered data by organizing it based on data rules defined by the users, to make the data consistent.
3. Inefficiencies
Data inefficiency is caused by wrong data entries, data redundancies, data duplicity, outdated data, and discrepancies in product or customer information. It is also caused by different data definitions used by various departments for the same data element.
Inefficient data is less trustworthy and affects data quality. It can take a toll on the business value by affecting the cost and performance of your operations. With a Master Data Management tool, data quality control becomes integrated and centralized, leading to useful, efficient, correct, and trackable data.
Learn how V-Soft helped a retail company by deploying master data management tools to improve their efficiency.
4. Lack of Data Governance
Without a collaborative authorization of data, it can be difficult for you to maintain data security and accuracy across your company. A Master Data Management tool can help you standardize and integrate the various sources of master data across your organization, helping you ensure that the data values are aligned and synchronized in real-time.
Conclusion
Master data is a trustworthy source of accurate information for companies to keep important data up to date. To manage master data, share important information, and to make data-driven decisions, companies leverage Master Data Management Tools. Imagine how hard it can be to update many systems when new information comes in. That's why having well-organized master data is a big deal, as it allows you to manage data in one central place across the whole company.
At V-Soft, our experts specialize in Master Data Management solutions. Contact us today to discover how we can help you leverage MDM to your advantage.
