Incidentally this is my 100th blog on this site. Since some time I was reading on Master Data Management and in this blog I wish to explain the Need of Master Data Management (MDM).
Imagine you are a bank with a huge clientele. You want to know how many clients you have? Is it enough to count the number of credit card customers, saving account customers and loan account customers? What if there is an overlap? What if you have information in one account that will help you to serve the customer better in the another account? For example a customer with gold account in Credit card calls but this time as a loan account customer and we fail to recognize this and treat him as ordinary customer? So wouldn’t it be nice for the bank to have a consolidate view of each of the customer? That’s where master data management (MDM) comes in. MDM makes it possible to distill a single view of the client—or of the patient, supplier, partner, account or other critical ‘entity’—from the incomplete or inconsistent bits of data that are scattered across the enterprise. The resulting view, now unified across disparate silos, provides the insight that you need to make better decisions and create superior outcomes.
Master data is the information about customers, products, materials, accounts and other entities that is critical to the operation of the business. But companies hold pieces of master data in many different applications, such as enterprise resource planning (ERP) and customer relationship management (CRM) systems. Each of those source systems creates and holds the data in its own unique way. As a result, information does not match from one system to the next. Critical data elements may be missing, duplicated or inconsistent. Further, each department can only operate from within its own compartmentalized view.
MDM software manages the creation, maintenance, delivery and use of master data, both to ensure that it is consistent and trustworthy, and to make it possible to see the data in an organization-wide context. Consider an insurance company with multiple divisions: Without MDM, an agent in the auto division will offer rates to a prospective client based on the home address and ages of drivers in the household. These standard rates might be higher than those offered by a competitor. What if the company had an MDM “hub” pulling together customer data from across divisions? Then, the agent could see that the customer already owns a homeowner’s policy, and could offer them discounted, more competitive auto rates. In this simple example, MDM provides a single view of the client that empowers the agent to secure a better business outcome.
So to summarize, MDM delivers a single, unified, trusted version of truth about an organization’s critical entities—customer, supplier, product and more. Armed with this single, trusted view, organizations can make better decisions and improve business outcomes— which can lead to higher revenue, better customer satisfaction, lower cost and lower risk.