Master Data Management (MDM): Putting Real Data at the Center of Omnichannel Efforts
Master Data Management (MDM) is a way of rethinking your data architecture, as well as a tool for helping you implement changes. In all likelihood, the architecture of your current corporate data is dictated by the data structure of the applications you use to run your business. If you have an accounting system or ERP, a POS, a web store and a CRM, they each have their version of a customer master. Moreover, it’s just as likely that each of those customer masters is different. The reason for that is simple – the data is architected to meet the needs of the application.
MDM is designed to give you a way to create a master customer file that meets the requirements of the whole company. It must also satisfy the needs of each of the respective applications, but rather than having multiple customer master files running in parallel with each other, it gives you a single source of truth that is feeding the appropriate data to each of your applications and receiving changes from those applications. The benefit to the company is that no matter where or how a customer interacts with you, the information will be the same, and a change of information in the master file updates all dependent applications automatically.
For example: Your ERP has no need to know a customer’s birthday, or the names of their spouse or their children, or essential dates like anniversaries. However, this may be critical information for a POS Web store, or CRM. By allowing the MDM to control your master data you can house all of this crucial master data in a central location and have it feed to and draw from the appropriate applications. Managing this master data in multiple locations is too time-consuming and error-prone to allow a company true growth opportunity. MDM allows you to have a complete picture of your customer instead of the fragmented view you currently have.
This mind shift around data is similar to Nicholas Copernicus and Galileo Galilei’s theory that the earth revolves around the sun – an argument that was none too popular at the time. However, today most people agree this is the case, although there are still a few holdouts. In the 1990s and early 2000s, a common belief was that applications were the center of the IT solar system and that data more-or-less revolved around and supported the applications. Today we have come to see data as the center of the IT solar system and applications as orbiting, dependent bodies. An argument more and more businesses are accepting as fact.
When we talk about master files such as the Customer Master, Product Master and Vendor Master, it is crucial to understand that this master data will be pushing into and pulling data from other applications. As an example, transactional data that is feeding the inventory module in your ERP may affect master data in your Product Master file such as QTY on Hand. Therefore, it is critical that when setting up an MDM you take some time to decide the following:
- Data you have today
- Goals and targets for the data you want to have
- A model defining the data you want to collect
- Rules highlighting any data that does not match your model
- Rules for exceptions
- A process to monitor data quality in relation to the data goals in step 3
The overwhelming advantage to a company that embraces this change is that they have a single source of truth for their master data. The result is that the sales and marketing departments, in particular, have detailed information about Customers, Products and Vendors that they can use for laser-focused, personalized marketing to clients and prospective clients. Moreover, IT only has to integrate into a single source.