Master data management or MDM is an important tool for businesses of all sizes. Every business generates a great deal of data about their operations, from lists of products to names and addresses of customers. This data can easily be clouded by reams of clutter.
Master data management tools such as those recommended in the Gartner master data management “magic quadrant” help to determine which data points are the most important to track and helps companies take advantage of their knowledge to boost sales and productivity.
How Does Master Data Management Work?
Master data management is defined as the care of a business’s non-transactional data. “Master” data can be defined as a way to bring much-needed improvements to a company’s operations with an information-focused mindset. The goal of master data management is to provide a curated dataset that contains unique, non-redundant information about a company’s operations.
Master data management may contain information about employees, customers, products, and vendors. This information can be compiled and used as a concrete whole when data management principles are put into place.
Consulting firms are able to bring a company’s many data sources into an aggregate product, removing inconsistencies and duplicate information. This data can then be used to influence the company’s actions in the future.
Situations Where Master Data Management is Needed
Poor master data management can lead to duplicate efforts and wasted money. For example, an insurance company may have sold a policy to a customer while continuing to advertise to them as if they were not current customers. This wastes time and effort as well as making the company look unprofessional. Linking records in master data management can help to alleviate this problem.
Other problems that could occur include data quality issues, classification issues, and data reconciliation. Master data management brings many different existing databases together to create a single, verifiable dataset.
Master data management specialists must be able to take disparate sources and create a coherent whole. MDM requires the data to be extracted from these existing sources and transformed for use in the new hub. Synchronizing the master data can require many difficult decisions. After the data has been centralized, it must be able to be given back to the departments that collected it to inform their future operations.
It is best to create a company-wide database for all uses, rather than allowing each department to maintain their own data. This eliminates the problem of siloed data and ensures that there will be no duplicate efforts such as the insurance example mentioned above.
Reasons Problems May Occur
One of the major reasons why companies may need master data management is after a merger or acquisition. When two companies’ data products come together, there are understandably many issues that arise.
Database administrators must go through the new company’s combined data and decide how to create a system with no duplicates. This process can be hugely helpful to the merged company, detailing how their companies work together and which functions are unique to each.
Master data management professionals must make sure that their databases are not too restrictive. If departments are not able to use their data in the ways they need, they may be forced to create their own databases and run afoul of master data management procedures. The overarching goal of the master database is to make life easier, not harder.
The Products of Master Data Management
The processes which are commonly used in MDM programs include data collection, normalization, transformation, error detection, data consolidation and storage, and data enrichment. Companies are able to use these enhanced databases to inform their activities.
How Master Data is Transmitted
Master data needs to be collated before it is distributed to other systems within the company. These methods include data consolidation, data federation, and data propagation. Data federation involves giving companies a single view of their master data sources that are being transmitted to destination systems.
Types of Organizations That Need Master Data Management
Organizations of all types can find MDM systems useful. Government, banking, retail, insurance, and manufacturing firms, among many others, can benefit from having their internal databases reconciled.
Help with Master Data is Available
Experienced consulting firms like Profisee are able to help companies reconcile all of their disparate data sources to help them move forward with a single vision.
Gartner recognized master data management solutions are available to companies of all sizes. They are especially useful to companies that have experienced mergers and acquisitions, as well as companies with several legacy data systems that need to be reconciled.
When companies take advantage of MDM systems, they will find that they are not duplicating their efforts and that their operations will be more organized.