According to Gartner’s research, “the average financial impact of poor data quality on organizations is $9.7 million per year.” IBM also discovered that businesses lose $3.1 trillion annually due to poor data quality in the US.
Master data management is a way of improving data, significantly reducing inaccuracies, and enhancing the overall health of the data, which enables organisations to use data in their favour.
But what actually is master data management, and why is it so important? Let’s read on to find out more…
What is Master Data Management?
Imagine you have a customer’s email stored in your organisation’s system. Think of places where this information could be stored: probably in your ERP, CRM, invoicing platform, ticketing or support platform, marketing automation platform, etc.
Let’s say that a customer calls the sales team to update their email ID, which gets updated instantly in the CRM. Now, the email is updated in the CRM, but what about other departments?
What if the finance department sends notifications to the customer on their old email, which they think is correct? The customer won’t find that notification, and it’ll all be messed up.
Well, this is the problem master data management helps solve. This is a way of synchronising and integrating all the sources of master data to ensure every team accesses the most updated form of data.
Wondering what master data is? Master data is the first version or original information which acts as the single point of reference for all other sources. You can consider the customer’s email mentioned above as an example of master data. In fact, anything from the products, vendors, prices, employees, customers, or fixed assets is considered master data.
Why is Master Data Management Important?
1. Deals with Inconsistent Data
Data inconsistency means having multiple copies of the same data that differ from each other.
If all your departments/platforms aren’t interconnected, there will be a lot of inconsistent data within your organisation. And this will increase the data complexity, and you won’t be able to use the data in your organisation’s favour.
However, you can deal with this with the help of a master data management tool that’ll help integrate all the departments and ensure consistent data across all platforms.
2. Prevents Data Duplication and data silos
When different departments deal with large volumes of data at individual levels, the risk of data duplication increases. Sometimes, organisation acquisitions and mergers may also lead to data duplication. And this duplicate data can have a hazardous impact on your business processes.
Fortunately, an overarching master data management strategy that creates a data process, tool, RACI and culture that enables a single view of your data assets will eliminate data silos and propel productivity.
3. Data Governance
Lucidworks states that corporations these days collect over 7.5 sextillions GBs of data each day. But the question is how many organisations are able to use that data? Unfortunately, not many. And this happens because of the absence of the right tools to govern the data.
With a master data management tool in place, you can comfortably handle large volumes of data and store it securely and in an easily usable form. This way, you can make the most of the data and grow your firm exponentially.
How To Implement Master Data Management?
Well, just buying a master data management software is now how you’re going to solve the data issues. You need to abide by the PPT framework wherein the three Ps stand for People, Processes, and Technology.
You need people, aka employees, to steward the data and govern both the existing data and that’ll be stored each day. After that, you need robust processes that’ll tell how your organisation’s data should be dealt with. And in the end, you need a technology that is a master data management tool.
How much is your organisation losing because of poor data quality?
Organizations such as Google, Amazon, and Facebook (Meta) utilise data better than their competitors which is why they are leading the race among many others. Are you utilising data as a competitive edge? Does your data deliver value or derail progress?
Today, the best run companies are guided by data to a greater or lesser extent, data should be at your fingertips to consume on-demand. If you have to request data to make a decision or live in the Excel or Google sheet world, you are already way behind the curve.
Wrapping Up
Data means a lot more now than it used to a decade ago. It plays a monumental role in deciding the fate of any organisation. Therefore, it’s important to manage data properly, which you can do with the help of master data management.
Although you can use a master data management software (quite cumbersome) to solve the master data issues, there’s a better option: outsourcing to an organisation experienced in data strategy and governance. Organisations that specialise in this can help you easily implement MDG without you having to invest too much time or effort. This way you can focus on your core business competencies that drive and enable growth for your organisation.
The Inextricable Group understands local statutory requirements, business processes and technology enabling organisations to overcome their data challenges through a robust agile data governance strategy.
What are your data challenges? — Get in touch with Inextricable Group for a free consultation.