- 1. Introduction to Master Data Management (MDM)
- 2. Understanding Master Data. Why manage Master Data?
- 3. What is Master Data Management (MDM)?
- 4. Implementing Master Data Management solutions
- 5. Consistent Master Data vs information flow – examples
- 6. Best practices
- 7. How do we optimize the data management process in the organization?
- 8. How do we determine the Master Data?
- 9. Why implement the MDM strategy?
- 10. Overview of enterprise Master Data Management solutions
- 11. Which MDM solution is best for my company?
- 12. Benefits of MDM system implementation
- 13. Key Considerations for Successful Master Data Management
- 14. FAQ
Introduction to Master Data Management (MDM)
In our blog posts, we have already discussed the topics of data quality, data integration, data management, and the visualization of enterprise data. The appropriate approach to data, understanding it, and using it knowledgeably allows many companies to spread their wings, regardless of the industry or business profile. This time I will present enterprise Master Data Management (MDM), i.e. the efficient management of basic data, which is a mandatory point for every data-driven company.
So how can MDM help?
Understanding Master Data. Why manage Master Data?
The 21st century has brought lots of data from multiple sources and information that flows through companies every day. And there are no indications that there will be less data in future. Quite the opposite – we should be prepared for the fact that the amount of data will grow, and in a logarithmic way. However, hidden somewhere among all this data is a real treasure that can change the way any organization works – namely master data.
What is Master Data Management (MDM)?
Or: what do we really want to manage and what should we manage? Do we know which data is most important to our organization?
Master data are key information about individuals, objects, or concepts that are crucial to a company’s operations. In the context of Master Data Management (MDM), master data are information that is considered fundamental and vital to the proper functioning of the business.
Moreover, corporations process many other transactional data, as well as generating analytical data that can be based on Master Data. This includes various aspects of the business and data types, such as:
- clients
- products
- employees
- providers
- locations and other relevant issues.
Implementing Master Data Management solutions
After this brief introduction, it may already be clear why you should manage data. The purpose of Master Data Management (once it is defined and known to us) is to ensure the consistency, quality, integrity, and availability of this data in all systems and processes of the organization. As a result, this data becomes a valuable resource that can be used to make more accurate business decisions, optimize operations, and increase the company’s competitiveness. MDM also helps prevent errors resulting from inconsistent or outdated information, which can negatively impact effectiveness.
Consistent Master Data vs information flow – examples
Imagine a sales representative who presents an offer to a customer already being handled by another coworker in the department, due to duplicate records in the CRM. Data quality issues including a mess in key data not only reduce the effectiveness of sales activities but also undermine the company’s reputation. There are numerous examples of this type. Outdated customer data in the database will not allow marketers running mailing campaigns to reach the right person. The lack of key product data in the ERP system means a risk of real sales losses.
Best practices
That’s why considering which data in your organization should be treated as master data is one of the best practices. Managing the most valuable data properly is, among other things, the foundation for building data quality metrics that I discussed in the article on Data Governance.
How do we optimize the data management process in the organization?
Ensuring data consistency and optimizing the data management process in your organization is a multifaceted task that requires taking various factors into account.
- Check what role data plays in achieving your company’s goal – first, you need to know and understand the organization’s goals and what role data plays in accomplishing them.
- Determine the master data – then decide which data can be considered key for the company.
- Develop good practices – having completed this process, it is necessary to develop data management standards and procedures that will be implemented throughout the organization. By this, we mean an approach to both presenting and understanding specific concepts.
- Take care of the quality of your data – in the next steps, it is important to ensure high data quality and eliminate errors and potential duplicates in the creation of master data. The aforementioned data quality metrics will certainly be necessary.
How do we determine the Master Data?
At this point, MDM systems come in handy. There are many such providers – I will discuss them in a moment. They allow you to organize everything that is really important in data management in one place, i.e., they are an information center facilitating standardization, synchronization, integration, data access management, and regulatory controls. The latter point is especially important when the law changes and the management of data in the company should be adjusted accordingly (this was the case, for example, at the time the General Data Protection Regulation (GDPR) came into force).
Why implement the MDM strategy?
With a proper and well-organized approach to master data management, it is much easier to present data to employees. We also minimize the risk of situations in which different corporate systems have to determine master data on their own. This also applies to reporting analyses: when we know where to look for information, e.g., about customers and invoices, we can avoid conflicting results in reports.
Overview of enterprise Master Data Management solutions
There are numerous Master Data Management (MDM) systems on the market from different providers. Most often, they offer what is most important in MDM, but of course their providers deliver various functions, and the tools come with many capabilities.
Below are some examples of the most popular MDM solutions:
- Informatica MDM: Informatica specializes in data management solutions, and Informatica MDM is its Master Data Management platform. It offers a wide range of features, including deduplication, integration, and Data Quality management.
- SAP Master Data Governance: SAP offers MDM solutions that are integrated with the provider’s ERP systems. SAP Master Data Governance allows companies to manage customer data, products, and other critical data.
- IBM InfoSphere MDM: The InfoSphere solution is a comprehensive data management tool that allows organizations to manage customer, product, and supplier data, among others.
- SAS MDM: SAS offers tools that allow organizations to manage master data and use it for analysis and reporting.
- TIBCO MDM: TIBCO Software offers a solution that allows you to manage customer data, products, and other key information in your organization.
Which MDM solution is best for my company?
These are just a few examples of MDM systems available on the market. The choice of the right system depends mainly on the needs and requirements of the company and on the budget. Each of the aforementioned providers offers a free demo of their tools, so it is worth taking the time to thoroughly familiarize yourself with the capabilities of individual solutions.
Benefits of MDM system implementation
- Centralized source of master data – first of all, after implementing the MDM software and correct initial configuration, the company gains a central source of data information, which significantly facilitates analysis and further company growth based on key data. Any integration of new systems, the expansion of current ones, and sometimes even rebuilding them becomes much easier when we know which data we should use and how we should use it. This way, the introduction of a new CRM system does not require analysis related to determining the source of customer information. The data is at your fingertips.
- Better results – without duplicating errors, we get better quality products, which are also created faster, because the risk of incorrect results, and thus subsequent iterations related to improvement, is reduced. This, in turn, directly leads to better competitiveness in the market and also helps to increase trust among business partners, who are served more efficiently.
- Improved analytics – naturally, all analytical activities gain better flow and allow you to make better business decisions.
- Facilitated offer customization – the consistent master data that we have under control directly translates into better customer service and allows us to better customize the company’s offer.
Also read: Data mining techniques
Key Considerations for Successful Master Data Management
I hope that this article has drawn attention to the Master Data Management (MDM) field and the fact that the management of master data records is important. So let’s sum it up in a few sentences. We may remember that a systemic approach to managing master data (e.g. customers or products) guarantees higher-quality services and better results and translates into increased satisfaction both within the company and outside – for our customers.
By ensuring the consistency and uniformity of key data within the main data sources, we accelerate all business processes, prepare for any legal changes, and ensure that strategic decisions are made on the basis of relevant information.
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FAQ – common Master Data Management strategy questions
Finally, here are a few frequently asked questions and answers that may interest you if you are intrigued by Master Data Management (MDM).
What does a Master Data Specialist do?
A Master Data Specialist deals with the management of basic or key data in an organization. Their main tasks are data management, deduplication (data cleansing), support in the scope of system integration, data quality monitoring, participation in the development of business processes, as well as cooperation with other departments to strive for a single source of truth.
What is MDM?
MDM stands for Master Data Management. It is an approach and a set of practices and technologies that organizations use to effectively manage master data. The main goal of MDM is to ensure the consistency, accuracy, and availability of this data throughout the organization, eliminating errors, inconsistencies, and duplicates.
Why is it worth organizing master data?
By ensuring that the basic data in our company has been organized, we safeguard the consistency and accuracy of the information processed. This, in turn, directly translates into fewer errors in the operation of systems and fewer inconsistencies in reporting analyses, so we significantly reduce the risk of generating unnecessary costs. This way, we save not only resources, but also time; this will be appreciated both by employees and our business partners.
Types of Master Data
From the perspective of Master Data Management, the following types of data most often come to the forefront:
● customer data: name, surname, address, telephone number, e-mail address.
● product data: name, description, price, product code, supplier, availability.
● employee data: personal data, qualifications, remuneration.
● supplier details: contact details, terms of contracts.
● location data: addresses, geolocation.
Different departments can use different data, so it is always worth taking care of the right source within MDM.
- 1. Introduction to Master Data Management (MDM)
- 2. Understanding Master Data. Why manage Master Data?
- 3. What is Master Data Management (MDM)?
- 4. Implementing Master Data Management solutions
- 5. Consistent Master Data vs information flow – examples
- 6. Best practices
- 7. How do we optimize the data management process in the organization?
- 8. How do we determine the Master Data?
- 9. Why implement the MDM strategy?
- 10. Overview of enterprise Master Data Management solutions
- 11. Which MDM solution is best for my company?
- 12. Benefits of MDM system implementation
- 13. Key Considerations for Successful Master Data Management
- 14. FAQ
He has been working directly with data since the beginning of his professional career. Closely related to the telecommunications industry, where he cares about Data Quality & Data Governance, as well as a good working atmosphere. Privately, above all, he is a huge fan of new technologies, automotive industry and unconventional solutions.