We all know and agree with the fact that data is the most significant asset for an organization. But is merely storing and collating data enough? The answer is NO. Data becomes an important decision-maker when it is accessible for timely retrieval in a practical way. This is where Master Data Management (MDM) comes into the picture.
Let Us Take A Business Situation To Gauge Just How Significant MDM Is.
Suppose an organization, operating in 15 countries, is planning to expand into more geographies. It has decided to launch its top 5 products for buyers in the new markets, to begin with. Now here’s an easy question – how will the company get all this data? They need accurate and detailed data related to the current geographical presence, performance analysis across geologies (sale volume, future demands, revenue generated), Best-selling products for masses across disparate locations, and Forecast of new sales.
Now how commercially and accurately viable the expansion decision turns out to be will depend entirely on how accurately, quickly, comprehensively, and efficiently you can avail this data. And in such scenarios the only thing that meets these critical requirements is MDM.
The MDM industry is set to more than double over the next five years. A new report projects it will grow from $11.3 billion in 2020 to $27.9 billion by 2025. Master Data Management is a set of methodologies and tools that categorize, centralize, and synchronize available data to offer you high quality retrievable and referenceable data concerned with the critical business elements such as services, products, locations, business assets and customers.
Get MDM services that offers accurate, consistent and complete master data across enterprise and to business partners.
Importance Of Master Data Management
Master data management is exceptionally intertwined with almost every significant aspect of a business. More than anything else, master data helps organizations and their enterprise-wide information systems identify the disparate components involved in their daily operations. The data may pertain to vendors, individual customers, products, capital assets, and more. That must be processed and recorded to maintain a record of truth for all business-critical processes.
MDM helps enterprises’ decision support systems and organizational members to make fast decisions based on objectively precise information. In order to do that, every identifier used for every element must be established and agreed-upon throughout the supply chain and organization.
This ensures consistency in identifying these significant elements during normal operations and minimizes confusion and errors.
Effectual MDM is also useful in speeding and optimizing organizational processes, as using data that is consistent can make sure that communications are interpreted, received, and acted on rapidly.
Another vital reason why MDM is important, especially in big organizations, is to ensure compliance with regulations. Regulators have specific laws governing the way companies handle and process data. Following and establishing standardized MDM practices can help the companies to align their processes with these laws.
For example, the recently passed General Data Protection Regulation (GDPR) needs organizations to have established protocols and practices to prevent access to customers’ data by parties that are not pertinent to particular processes.
How Companies Are Achieving Success With MDM?
Companies continue to encounter issues with data as they grow. They spend a humongous amount of resources to prepare data and gain insights. According to a global data management benchmark report, 91% of executives believe that preparing data for insights ultimately costs their business in terms of efficiency and resources.
In the same way, there are other data-related challenges that are the reasons that you should manage your master data. They are:
Uncertain data across the value chain – Organizational data, in multiple versions, across locations, functions, and systems makes it tough to ensure a single view of truth. This happens due to the lack of an integrated approach to information management.
Deficiency of cross-domain relationships – Domain masters (such as customer, supplier, product, etc.) often require the relationships among each other. It prevents business users from obtaining operational intelligence, making it difficult for organizations to manage interdependent business processes.
Lack of data governance and process orchestration – Companies struggle to maintain data security and integrity as they get short of collaborative data authorization. It makes it tough for business users to manage and approve information following the organizational policies and processes.
Data manipulation authenticity – Tracking and maintaining logs for previous versions of data is time and again, a challenge for the organization, which can severely impact the authenticity of business processes.
Organizations can easily overcome all these pain points by managing the master data. It synchronizes all external and internal systems to keep the master data clean and consistent across the organization.
Master Data Management Architecture
Master Data Management follows broadly follows three frameworks, which are:
1. Registry Architecture
In this type of structure, the system is granted only read-only access, which states that unwanted persons cannot modify the master data in any way. It gives a read-only representation to master data for downstream systems that require understanding but not change in the master data.
The implementation structure is useful to eliminate duplications and provide a consistent way to master data. It offers low-cost, fast data integration with the profit of minimal intrusion into your application systems. This framework is beneficial in finding redundancies in the data.
2. Hybrid Architecture
In this, the system has the power to change or modify the master data. This speciality helps to achieve quick access, and, as the order is having the capability of modifying the data, then the quality of information also gets improved.
This characteristic includes both the registry and repository. This architecture ultimately materializes all master data properties in the Master Data Management System. Authoring of Master Data can happen in the MDM System as adequate as in the application systems. From a completeness perspective, all attributes are there.
This type of framework allows both the Master Data Management system and application system to work in collaboration. Its downside is the cost for supporting this type of structure is sometimes high as it is not very easy to change and modify the master data. Its main aim is to centralize the master data and achieve consistency.
3. Repository Architecture
In this Architecture, also called Enterprise or Centralized or Transactional Architecture, the whole set of master data for a company is stored in a single database, including all the attributes required by all the applications that use the master data.
This type of framework assures stable consistency, accuracy, and efficiency. There is no overhead of the application system as all the functioning is done by Master Data Management itself, thus reducing the time taken.
The applications that utilize, build, or manage master data are all changed to use the master data in the center, alternatively of the master data before maintained in the application database, making the master data hub the system of entry and record system.
Look At Some Real-World Examples Of MDM Across Industries
Master Data Management (MDM) In Manufacturing
Manufacturers must work to meet the standards across design, safety, building, testing and compliance. If a manufacturer can’t access the right information, or worse, obtains the wrong information, it could face acute delays. This was one of the significant challenges for one of the world’s largest spark plug manufacturers, as every stage of its manufacturing process was split around distinct countries and continents. MDM brought the organizations data to a single dashboard resulting in:
Each stage of the manufacturing process meets compliance because all relevant legal information is available and up-to-date.
Product specifications are updated in real-time, so everybody across the supply chain, logistics and marketing have the exact information they need.
If you frequently switch suppliers or add new SKUs, this could be the most compelling reason to consider an MDM solution. Not only does an MDM solution reduce time to launch, but it also enables you to meet customers’ needs at a lower cost and outperform the competition.
Master Data Management (MDM) In Retail
Retailers must keep product details accurate and up-to-mark. Marks & Spencer (M&S) has 1,035 outlets in the UK and another 428 in 56 different countries, with over seven million registered website users. With all these users and products, relaunching its website on a new platform would be a challenge. M&S couldn’t afford to lose users or sales due to an inefficient process, and the company needed to keep track of all its 20,000+ online products while switching to a new platform. They had to:
Save money by making their internal system easy.
Remove pain points.
The organization used MDM to bring product information into one place and create a single, authoritative source, which was incredibly challenging since 585 different product attributes spread across eight international websites in five languages.
Today, product details are updated in seconds. The company only does it once, publishing the new information on its websites, stores and apps and ensuring supply chains have real-time access to an accurate, updated set of product details.
MDM also allows M&S to:
Tailor products for each country. If M&S doesn’t have the license to sell in a particular country, the product doesn’t show on the relevant website.
Manage all of the content in English. MDM automatically flags products that are sold internationally – only the text is sent for translation.
Struggling with data-related challenges and you want to know the reason why you should manage your master data.
A revolution in master data management (MDM) is reshaping how organizations collect, unify, manage and use data. It can help your company create more compelling customer experiences.
For more details, get in touch with our experts at Polestar Solutions. Here we deliver robust, scalable and secure on-premise, cloud, or hybrid data management services aligned with your business objectives.
Our team brings in years of expertise in consulting and building data platforms for enterprises of varying complexity.