Every organization needs to control and manage its common data effectively. Following Master Data Management’s best practices can provide the right single view of customer, product, location, etc… to achieve competitive advantage
The only constant in business data management is change. People move to new homes every day, rendering customer information in countless databases obsolete. And those same customers change phone numbers and jobs, acquire new credit cards, open new bank accounts, make purchases, make payments and get married. If changes like these are not recorded in an organization’s data records — and shared with all the systems and processes that depend on those records — that organization can pay a high price or miss out on new business opportunities.
As a result, organizations around the world are clamoring for a single view of their “master” data – the data on which their businesses, and their business decisions, are based. This includes a mix of information on customers, products, agreements, accounts, vendors, suppliers, and inventory – all typically stored in application silos across an organization.
Given the organic way in which most organizations’ information systems have been built, not to mention the reality of information silos, legacy systems and multiple architectures, a single view of master data has thus far been impossible to achieve. However, as organizations reorganize, merge, acquire new business units and grapple with new security and compliance regulations, the need for master data management is becoming more pressing.
What Is Master Data Management?
Master data management describes a set of disciplines, technologies and solutions used to create and maintain consistent, complete, contextual and accurate business data for all stakeholders (users, applications, data warehouses, processes, and trading partners). The key to master data management is “management.” Master data management does not create new data or new data silos. Rather, it provides the method by which an organization can effectively manage the data already resident in disparate systems. Master data management is a component of enterprise data management.
Key Attributes of a Master Data Management Solution:
- Consolidation of customer and other knowledge and insight from existing silos to an enterprise level.
- Sharing of data across all systems as a set of customer-centric business processes and services.
- Common master for customers, products and suppliers to speed data entry, retrieval and analysis.
- Support for multiple users of data, including the ability to limit certain users’ ability to add, update or view processes which maintain the master data.
- Integration of product information management, customer relationship management, customer data integration and other solutions that provide access to analysis of master data.
The “Right Single View” of Master Data
For many organizations, the answer does not lie solely in the “single” view. Instead, they should focus on the “right” single view of their master data. This type of solution does not seek to replace existing data silos with a single data view. Instead, it employs special technologies and processes to break down the barriers between data silos — allowing existing information to be presented in multiple views so that the right view is available in the right place at the right time.
Data warehouses, transaction systems, customer information files, and operational data stores have their place in a comprehensive data management solution, but they were not designed for master data management or enabling a single view. In fact, as master data becomes more heterogeneous and complex, these solutions fall farther behind.
Further complicating things are the limitations inherent in most organizations’ IT infrastructures. Most solutions are designed to manage low-velocity customer and product data in a single mode — either in batch mode or online — and are not flexible enough to accommodate new channels and sources of information.
In addition, because the methods and processes associated with master data management operate separately from an organization’s line-of-business and other systems, they go beyond the retrieval, updating and dissemination of data — they also address all the different uses of master data. Master data management supports operational uses by integrating data with the operational applications in real time. It supports collaborative use of master data by providing an authorizing process to create, define, and synchronize data. Finally, master data management supports analytical use of master data by proactively pushing data to analytical applications via an event management tool.
With a single, integrated master data management solution, an organization can provide its business units with a view of master data that is up-to-date, accurate and customized to the special needs of the viewer. For example, a shipping clerk using a logistics application, the right view will allow her to see a customer’s address and other relevant details. The right view for the customer tracking her purchase on the Web will be different.
A single view master data management solution can provide all the benefits of traditional data management solutions — and the potential for enhanced, enterprise-wide efficiency and competitiveness. The prospect of putting a master data management solution in place may be daunting, especially for larger organizations and/or those with limited IT resources. With the right approach, successful master data management implementations are achievable.
That’s because at its heart, a single view solution to master data management is a data strategy, implemented via IT deliverables. Once the data strategy is in place, organizations can implement the IT enablers one domain at a time, as their overall business priorities call for them. The staged implementation process can also be coordinated with — and enhanced by — other initiatives such as implementation of a software as a service (SaaS) architecture.
This staged implementation approach allows the financial impact of a new solution to be absorbed over a longer time and tied directly to specific business benefits. Staged implementation also allows an organization to see the real-world benefits of master data management more quickly, which is a good thing. Without a master data management system in place, organizations will continue to be at the mercy of their information silos.
Most organizations struggle to manage their master and reference data, and lose competitive advantage as a result. Adopting the “right single view” approach for managing master data can allow for successful architecture and implementation of this critical function.