In today’s world, “data” has become an integral part of our lives. Whether a step we take during our morning walks, a click on the mouse of our personal computers, or a tap on our smartphones, practically everything we do from sunup to sundown generates data.
The amount of data being generated has reached gargantuan proportions; it comes in all shapes, forms, and sizes. In fact, data analysts have zeroed-in on four important terms called the ‘4 Vs’ to characterize data: Volume (the amount of data generated, from a single byte to exabytes), Velocity (the rate at which data is generated/consumed), Variety (different types of data: emails, voicemails, videos, pictures, etc.), and Veracity (the quality and accuracy of the data).
This data phenomenon has given birth to a new buzzword: “Data Explosion.” To put things into perspective here is a graphic of what One Internet Minute does to the data world.
Source: Wikipedia, Statista
In businesses, organizations, and enterprises, data from this explosion is distributed and scattered across different lines of businesses, silos, domains, and IT application systems. The current evolution and omnipresent use of mobile, IoT, and the cloud has created a data-goldmine. However, the sheer scale of the data sets, complexities of the business processes, and the many applications on which the data is stored or used make it difficult to maintain high-quality data and nearly impossible to gain a complete view of actionable business insights.
More often than not, this valuable information ends up becoming a thorn in a company’s side rather than a catalyst that drives their business forward. Managing these overwhelming amounts of data and utilizing them effectively to foster business growth has become a herculean task. This is where “Master Data” comes in.
Master Data represents the business objects that contain the most valuable, agreed-upon information shared across an organization. Master Data gives context to business activities and transactions, answering questions like who, what, when, and how, as well as expanding the ability to make sense of these activities through categorizations, groupings, and hierarchies. Master Data essentially contains a consistent and uniform set of identifiers for enterprise products, suppliers, locations, etc.
The kinds of information treated as master data vary from one industry to another, and even from one company to another within the same industry. This could be data on customers, products, suppliers, locations, patients, or equipment. Master Data that is mastered and governed often becomes the core data that is essential to operations in a specific business or business unit.
Master data is often referred to by various synonyms such as Trusted Data, Golden Record, Best Version of Truth (BVT), Single Version of Truth, Reference Data, Foundational Data, and Federated Data.
On the other hand, Master Data Management (MDM) is a controlled process that defines, creates and manages various business-critical data of an organization to provide a single point of reference. Master Data Management removes duplicates, standardizes data and incorporates rules to eliminate incorrect data from entering the system. This creates an authoritative source of master data. It is a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency, and accountability of the enterprise’s official shared master data assets.
According to Harvard Business Review, only three percent of companies’ data meets basic quality standards. This number is shocking especially given the fact that data is the nucleus of anything and everything that happens in businesses. Data quality issues lead to data errors, incomplete information, and unreliable data. Subsequently, analytics projects executed on this data run the risk of producing incomplete, error-prone, and non-standardized results. Needless to say, business decisions made on these bad results will have inherent flaws.
Poor customer data won’t just annoy the existing customers, it may turn prospects and buyers away from the organization’s brand, costing them sales, damaging profits, and eroding the brand’s reputation. Distributing an email that includes an incorrect name or other personal details, offering irrelevant discounts based on incorrect purchase history or geography, or emailing an offering twice to the same person are some embarrassing acts MDM can prevent.
Bad data can also get the organizations in bad books of regulatory and compliance authorities, resulting in hefty fines and irreparable damage to companies’ reputations. Therefore, data quality improvement, mastering data, and managing data should be among the top priorities of any company looking to stay relevant.
Curious how exactly MDM supports compliance efforts? > >
MDM isn’t simply a data management system. MDM is a complete package complete with numerous milestones of data integration, data mastering, data management, and data governance. These data milestones often are broken down into: Discover, Model, Cleanse, Enrich, Recognize, Resolve, Relate, Govern, Access and Deliver.
MDM acts as a central repository providing a single version of the truth and equips organizations with a complete, end-to-end solution that drives innovation, achieves better business outcomes, and addresses most of the challenges mentioned thus far. MDM also empowers organizations to embark on a data-driven digital transformation journey.
Various Aspects of MDM and its Capabilities
Source: Informatica
A few tangible impacts seen in most MDM implementations across industries right off the bat, are:
With all this, would implementing an MDM-program guarantee positive outcomes in your organization? The answer is ‘yes,’ but with a caveat. Merely implementing a master data management program doesn’t solve all data conundrums. An effective master data management strategy entails an end-to-end, comprehensive view of trusted, relevant, governed, and authoritative data.
This approach can be modular based on your needs and can span across multiple data domains–including customer, product, supplier and potentially dozens more. A complete master data management strategy addresses the critical business objectives for today’s customer-centric and data-driven business. Without a complete strategy, MDM will produce limited benefits.
In order to be successful, an MDM implementation needs to be approached strategically, with active participation from all stakeholders. It’s paramount the right kind of experts are working with the MDM tools that fit the organization’s needs, irrespective of the project methodologies used. And of course, the involved project teams, business owners, data stewards, data owners, and various other stakeholders should work in unison to make the program successful.
All these years, enterprises have been collecting the attributes that contribute to master data without even realizing it. Since the data was disorganized and dispersed, management didn’t see the data as the asset, failing to realize its full potential. But the evolution of the digital world has changed the perception of data and the lens it’s looked through. Data is an innate and quintessential part and everything that goes on, so much so that it can make or break an enterprise.
The emergence of social media giant tech companies such as Facebook, Twitter, Instagram, and defunct Cambridge Analytica respectively are a testament to the role that data plays. In fact, it looks as though all roads are leading to one eventuality: where data, sooner or later, will be recorded as a tangible asset. Gartner predicts that by 2022, companies will be valued on their information portfolios.
Gartner even advises using its Information Valuation Method to value information assets much like other enterprise assets. As they stated, “Those in the business of valuing corporate investments, including equity analysts, will be compelled to consider a company’s wealth of information in properly valuing the company itself.”
In today’s new world order, the need for a single source of the truth is more prevalent than ever before because “Trusted Data Leads to Trusted Insights.”
Data that’s mastered is an invaluable asset to an organization that fast-track insights, empowers employees, gives a roadmap for mergers or acquisitions to realize growth potential, and improves end-to-end organization business processes.
Whatever domain your organization is in or whatever types of customers you cater to, in this data-driven world, if you ask yourself: should your organization implement a Master Data Management Strategy? the answer will have to be a resounding ‘Yes.’ That’s the Golden Truth.
