What is Master Data Management?

Master Data Management is a crucial process for organizations to manage critical data assets needed to inform business decisions. When we dive into the importance of data management and why MDM is imperative to your business, it’s helpful to understand the scope of how much data we create.

By the end of 2023, two-thirds of the world population will be online.

More than 2,500,000,000,000,000,000 bytes (or 2.5 quintillions) of data are created each day. It actually makes us go cross-eyed to try to count the zeros.

We’re creating, capturing, and consuming more data than we ever have.

What is Master Data Management?

Master Data Management is the process of creating one master data record or “golden record” from across all of your internal and external data sources. The golden record contains all of the information needed to make critical business decisions.

Master data refers to the foundational data elements that are essential for business operations such as customer information, product data, and employee records.

Is This You?

It’s safe to say you deal with frustrations such as unwanted characters and punctuation in your data, null values, and non-identical duplicates, like “Maria Seelos” and “M. Seelos.”

These hurdles are enough to make you want to pull your hair out.

This is where MDM comes into play, offering a systematic approach to harmonize and manage the most critical data assets within an organization.

For example, “M. Seelos” and “Maria Seelos” will become one “golden record” by defining an MDM process that maps fields such as a company email address between multiple records.

With one record, you don’t need to sift through duplicate records to analyze the information.

What’s the Difference Between Master Data Management and Customer Data Platform?

MDM and Customer Data Platforms (CDPs) both organize data, but they have different focuses:

• MDM: Master Data Management is the process of managing core data across the entire organization. Its goal is to ensure data accuracy, consistency, and reliability.
• CDP: Customer Data Platforms are designed to centralize and manage customer-related data, including personal details, purchase history, and interactions. CDPs primarily focus on improving customer experiences, targeting marketing efforts, and optimizing customer engagement.

While MDM is about maintaining the integrity of core business data, CDPs are more customer-centric, concentrating on leveraging customer data to enhance marketing and customer service.

Why is Master Data Management Important?

MDM is essential for delivering the necessary insights needed to make critical business decisions such as budgeting, sales and marketing strategy, or software usage.

You’ll also see the following benefits once you implement your MDM process.

• Data Accuracy: MDM ensures that your core data, such as customer, product, and employee information, is accurate and consistent across the organization. This leads to better decision-making and operational efficiency.
• Regulatory Compliance: Many industries have strict regulations governing data, such as GDPR in Europe or HIPAA in healthcare. MDM helps you maintain compliance by managing data securely and ensuring privacy.
• Improved Customer Experience: With accurate customer data, you can provide personalized experiences, better customer service, and targeted marketing, ultimately enhancing customer satisfaction and loyalty.
• Cost Reduction: MDM reduces data errors, duplicates, and inconsistencies, leading to cost savings through streamlined operations and reduced data cleanup efforts.
• Data Integration: It enables you to integrate data from disparate sources and systems, creating a single source of truth for better cross-functional collaboration.

How Do I Set Up a Master Data Management Process?

As with any process development, creating an MDM process is a labor of love. But, it will save you money and time in the long run.

Here are four steps to get you started:

• Form a Cross-Functional Team: Who needs to be involved? Assemble a dedicated team comprising IT experts, data stewards, business unit representatives, and data governance professionals. This team will oversee the MDM project.
• Define Objectives: What are your goals? Determine what specific data challenges you’re addressing and the benefits you aim to achieve, such as improved decision-making or compliance.
• Assess Current Data Landscape: Conduct a thorough analysis of your existing data sources, data quality issues, and where master data resides. Understand how data flows through your organization.
• Select MDM Technology: Choose an MDM platform or software that aligns with your objectives. Ensure it supports data integration, data quality management, and data governance.

You can start with a pilot phase to test MDM processes on a smaller scale, which will allow you to make the necessary adjustments needed to deploy your MDM process company-wide.

As you begin implementation, you will want to work with your cross-functional team to maintain the quality of your MDM process by:

• Developing data governance policies
• Implementing data quality checks
• Developing data security and access controls

Don’t forget to continuously improve your process! Establish a framework for ongoing MDM maintenance.