With all the uncertainty involved in running a business, there is one thing that you can count on without fault – data is always changing.
From customer preferences and market trends to spreadsheets and financial transactions, your business will have to manage this colossal amount of data while keeping expenses at bay. This is where Master Data Management comes in. But with such a mouthful of a name, business owners and entrepreneurs often choose to disregard it and its seemingly complex nature. To help you get a good idea of what Master Data Management is and how it can actually help your business, here’s a crash course:
What is It?
In a nutshell, Master Data Management is a method used to synchronize the most critical pieces of interdependent data that exist in various departments of your business. If you’re going to remember anything about MDM, it’s that it provides a single point or location for all of your data including, but not limited to, customer’s shipping/delivery address, billing information, or even the simple set of product or service names that your business provides.
How it Works
As mentioned above, MDM provides a focal point that connects all other areas of your business. After doing so, MDM platforms then need to establish stringent rules for accepting and storing data sets to ensure quality and correctness. This is done either with in-house tools and technologies or you can use third-party sources as a way to validate data quality and correctness.
The business’ master data are distributed to other systems to maintain a single version of the said data. It is transferred using one or more methods of transmission including Data Consolidation, which involves securing the data through multiple sources and consolidating into one data store, Data Federation, and Data Propagation. All three are designed to transfer master data to other networks, but the goal is achieved in slightly different ways.
Benefits of MDM
There are several benefits to integrating MDM into your business, and these benefits tend to increase as the amount and diversity of teams and branches, job positions, and computing processes relatively increase. For this very reason, MDM is becoming increasingly common in large or multi-faceted companies.
One case where MDM could prove beneficial is during a merger and acquisition deal. Using MDM can help reduce the confusion by making sure all terms and entities are assigned with standardized names throughout the whole company.
Another benefit of MDM is that it creates a more organized approach to data integration. This means that wherever the data values are used, whether it’s in accounting or warehouse management, it stays the same, ensuring accurate use and reuse of said data. Even the simplest errors, such as recording the wrong address on your customer’s shipping address, can cost your business huge amounts of time and money to correct.
MDM as a Product
The techniques and processes involved in MDM have now been consolidated into software platforms to be sold to businesses who need smarter and more efficient ways to manage data integration. These products come with various processes or features including source identification, data morphing, error detection and correction, and data storage.
Even if your current operations are small enough to not need data management and integration, you need to be looking at the big picture. As you work to scale your business and more data is acquired, you’ll definitely need the help of MDM to maintain your data’s integrity.