31 October 2019

Importance of Master Data Management for Business Success

Importance of Master Data Management (MDM) for Business Success

Mismanaged data, inaccurate data, delayed update of data, data in silos, fragmented data — are any of these data management issues troubling you at work?

As a business integrations solutions expert at To-Increase, my clients often approach me for advice. Many a time, they not only want to know how to efficiently handle master data or core business data but also request guidance on how to get the most out of that data, so that they can gain valuable insights that could help them boost the success of their business. In such cases, I recommend adopting a Master Data Management (MDM) solution that could afford them a single, centralized view of the colossal data available to them. By investing in a master data management tool, they can overcome the aforementioned challenges involved in data handling and can move on to become truly empowered in making informed critical business decisions.

In this blog, we will cover some of the commonly voiced data issues faced by most enterprises, and analyze how they can boost the success of their businesses by adopting a Master Data Management solution.

So, first of all, what is Master Data Management?

What is master data management (MDM)?

As a data steward, you likely deal with a lot of data – customer information, marketing expenses, product lists, sales statistics, employee records, tax statements, revenue reports – the list just goes on and on. And if managing all that wasn’t hard enough, you have the added burden of trying to work with data that keeps changing all the time! (Think product names, billing information, last-moment work orders….) This enormous volume of data is spread across your organization; among its various departments, applications and geographical locations – and is likely shared with your firm’s partners, vendors or customers as well. This makes the optimal handling, storing and distribution of updated and accurate data a crucial parameter to the success of your business.

Enter Master Data Management – an automated tool that enables you to store and share unlimited volumes of data seamlessly, across all your business offerings, without compromising on data accuracy, uniformity or consistency. Master Data Management (MDM) can be defined as the process of linking all the critical business data of an enterprise to a single location or database, often termed as the single point of reference. It is considered to be the ideal solution to all your data problems, as it reduces the chances of manual errors and data consistency issues creeping into your database, thereby allowing business processes that are dependent on reliable data to become less redundant.

Why is Master Data Management required?

To better understand why a Master Data Management solution is sought after by most business owners and data managers, 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:

  • Flawed employee data – such as duplicate or missing employee information – being found on a company’s database, due to one company integrating its records with another, as a result of a merger or an acquisition
  • Incorrect or outdated customer data being entered into multiple systems, as a result of various company platforms, spreadsheets or software not being synced properly
  • Product names or descriptions not being updated consistently across internal or seller platforms
  • Customer purchase data not being synchronized correctly between the sales and the accounts departments, leading to the generation of duplicate or redundant invoices

The more your company grows, the higher the odds of such issues getting compounded. Chances are, you have already invested in a lot of resources to prepare data and insights — all of which could go in vain if the data is later found to be inaccurate. Storing and distributing wrong data not only adds hours (very inconveniently!) to your working day — it can actually ruin your business (think for a moment what might happen if your legal department draws up your company’s service agreements with your current customers based on last year’s payment terms!). Such scenarios are especially true in today’s digital world where most business decisions are based on the data you see on your company’s data portal. Working on inaccurate or incomplete data can hamper the decision-making abilities of your company’s key stakeholders, which can negatively impact the growth of your business as well as your company’s ability to offer superior customer satisfaction.

Moreover, with different versions of data being available across organizational functions, locations and systems, it can be difficult to maintain a single source of truth.

As a result, many companies are realizing the criticality of maintaining reliable and accurate data for the success of their business operations. They are, therefore, seeking a Master Data Management tool that can direct them to a precise point from where they can access trustworthy data. Master Data Management can be an ideal solution to deal with issues, such as:

1. Inconsistent data: The lack of integration across platforms can lead to inconsistent data being recorded, which can be resolved by integrating an MDM tool within your organization’s ERP to improve accountability.

2. 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.

3. Manual data replication: When vast volumes of data are handled individually by multiple sources, companies risk the duplication of data, which can severely impact business processes. This is especially true in the case of transactional data, where data pertaining to payment method or quantity of purchased items need to be reconciled quite frequently due to erroneous manual inputs. A Master Data Management tool can help you build a single data source that eliminates duplication of data, thus increasing the efficiency of your business processes.

How can Master Data Management lead to business success?

The rising demand for a first-rate Master Data Management tool can be attributed to its ability to overcome the challenges of manual data management, redundant/outdated data and data discrepancies in your organization’s master data or core business data. It also provides deeper insights into the quality of your company’s interaction with its customers. Listed below are some of the major benefits that you can expect out of an MDM tool:

1. Master Data Management enables centralized and decentralized management of data. This means that you can either manage master data by assigning it to a single user or de-centralize it by awarding its ownership to multiple entities.

2. A Master Data Management solution can be configured rapidly, without the need for any coding, making it the most user-friendly option available.

3. The key business users assigned to manage master data can do so effortlessly, without having to wait for help from their IT department.

4. Data stewards/managers can be given the authority to approve or reject data from a central inbox, thus ensuring that data quality control becomes centralized and accounted for.

5. A proper change request management can be put in place. This simply means that any change in master data can be made only after an approval is given by the right authorities.

This is not to say that an MDM implementation is completely challenge-free. But, as I have realized in my experience with data stewards and business managers of several companies, it is a must-have for any business that deals with vast volumes of data. By investing in a Master Data Management solution, your data quality improves – and so do your business operations. By relying on a single source of truth across company entities and multiple systems, the integrity of your business data is ensured. Most importantly, it enables you to be completely transparent and accountable at any time, thereby gifting you the most valuable asset of your organization’s journey – your customers’ trust.

To help you in this journey, To-Increase offers you our state-of-the-art MDM Studio for Microsoft Dynamics 365 Finance and SCM that can help you leverage your organization’s master data, which would enable you to arrive at a single source of truth through centralized or decentralized master data ownership. With an impressive portfolio of industry, business and technical productivity solutions for Microsoft Dynamics 365 and a proud member of the prestigious Microsoft Business Applications Inner Circle for 14 years in a row, To-Increase is driven by our vision of empowering you – our customer – with software solutions that can help you optimize your operations, grow and lead in your sector.

Augment your business success by learning all about master data management. Download our Beginner’s Guide now!

MicrosoftTeams-image (16)-2
Jerry Caous,
Jerry Caous,
Sales Specialist Business Integration

Also interesting