If you’ve thought the amount of data your organization is dealing with has been increasing, it’s because it is. The numbers prove it. Over 2.5 quintillion bytes of data are created every day, and the number is growing. Experts predict every person on Earth will generate 1.7 megabytes of data every second in a few short years.
The growing amount of data generated in your business provides unique opportunities. More data allows you to analyze buying patterns to see trends in your markets. It also allows you to create better customer profiles. Along with these new opportunities come new challenges. Businesses must now manage more information than ever before. This has led to the need for better management.
The term master data management describes the processes and procedures businesses use. To achieve effective MDM, you’ll need the right mix of technology, strategy, and people. MDM tools are a vital part of this.
How can your business enjoy better data management? Let’s count the ways.
Understanding the Need for MDM
Before we get any further, we need to answer a crucial question. What is master data?
In the simplest terms, master data is the core data you need to operate your business. For some parts of an organization, that includes information about employees and products. In the marketing and sales department, it would also include customer data.
Why You Need to Manage Master Data
Many areas of a business have overlapping master data. For example, billing and accounts also use customer data, the same as sales and marketing. The problem occurs when different departments use different systems for core data. Marketing has one system for maintaining customer information. At some point, it’s transferred to the sales department’s CRM. As the data moves from system to system, there’s a serious risk of duplication and error. Your employees may have to re-key data, resulting in errors and omissions. Employees might also ask the customer to fill in a form. Data entered somewhere else is now duplicated. This leads to redundancy and other problems. The long and short of it is it slows you down.
What is Master Data Management?
Now that we’ve explained master data, we can take a look at master data management itself. In the simplest terms, MDM is the management of master data. A more complete definition sees MDM as the structure, practice, and strategy behind tracking data. Your strategy guides you, while structure represents the processes and procedures you use. Practice is the actual management of the data itself.
The Benefits of Better Management of Master Data
We’ve looked at some of the problems stemming from poor management of your core data. Businesses with poor MDM have duplicate records across departments. Their records are often full of errors. Employees may re-key information or ask customers to input data a second time. The solution to this situation is obvious. You need better MDM. Managing your core data more effectively has huge benefits for your business, including:
- Enhancing data sharing across departments
- Reducing duplication of work
- Improving accuracy in records
- Improved efficiencies and reduced overheads
- Better credibility with customers and vendors
- Improved revenue and profits
In some cases, it can be as simple as ensuring your billing department is using the right name on a customer’s bill. Better data management makes sure everyone has the right data. In turn, that customer trusts you and stays with you long term.
Using Data Management to Grow a Business
It’s no secret that data is key to success in today. Despite that, many business leaders don’t believe they leverage their data effectively. Part of the problem is likely MDM. Better data management across departments allows more alignment and smoother operations. It’s easy to see how this works. A customer with an auto loan might also be interested in information about insurance. If sales shares information, marketing gets the offer to the right customers. Better data management provides richer insights, as well as streamlined processes. You can use this information to improve customer experience or make better business decisions.
MDM Tools Are One Piece of Getting Better Management
The next question most people have is how they can improve their management of critical data. Many people focus on structure and strategy, but the tools you use are also important. The wrong tool can create more problems than you intend. For example, an automated tool that reconciles duplicate records is great in theory. If it ends up merging two separate records, you may end up needing to split them apart again.
What Kinds of MDM Tools Are There?
MDM tools support the creation of better master data. To that end, you’ll find tools that:
- Clean data
- Transform data
- Merge data
These are the basic functions you’ll need when you create master lists. More sophisticated tools use better data matching and data modeling. Other functions to look for include:
- Workflow management
- Hierarchy management
- Data integration
- Data governance
Choosing the right tools supports your efforts to create more accurate core data. Scalability is also important. You’ll want to start small and ramp up your MDM efforts across the entire organization. Finally, think about the tools you’ll need for good MDM in the maintenance phase. Once the data has been cleaned and merged, you’ll need processes to ensure it’s always up to date, correct, and secure.
Start Managing Your Data the Right Way
By adopting better management for core data, you can improve almost every department. New MDM tools will help you get there. Of course, the right processes and structure are also important when it comes to managing data effectively. Devise your strategy, and then select the tools to support the job. Managing data is a full-time job in the modern business world. If you’re not sure you’re making the most of your data, talk to our experts. We can help you devise a management plan that works for your organization.