What is Master Data Management?
Large companies, especially global ones, have quite a few systems in place in order to make everything run smoothly. Sometimes the data becomes duplicated or fragmented, resulting in inaccurate answers to important questions. That’s where master data management comes in.
This information has been de-duplicated, reconciled, and enriched, becoming a consistent, reliable source for an organization. Once created, this master data serves as a trusted view of business-critical data that can be managed and shared across the business to; promote accurate reporting, reduce data errors, remove redundancy, and help workers make better-informed business decisions.
Master data management (MDM) involves creating a single master record for all critical business data from across internal and external data sources and applications, such as your Inventory Optimization program.
A master data management tool can be used to support master data management by removing duplicates, standardizing data (mass maintaining), and incorporating rules to eliminate incorrect data from entering the system in order to create an authoritative source of master data. d.
Why is Master Data Management Important?
This real-life story of why Master Data Management is important, really resonated with me how important it is to have a program that will keep your data organized and cohesive.
A credit card customer moves from 2847 North 9th St. to 1001 11th St. North. The customer changed his billing address immediately but did not receive a bill for several months. One day, the customer received a threatening phone call from the credit card billing department asking why the bill has not been paid. The customer verifies that they have the new address and the billing department verifies that the address on file is 1001 11th St. North. The customer asks for a copy of the bill to settle the account.
After two more weeks without a bill, the customer calls back and finds the account has been turned over to a collection agency. This time, the customer finds out that even though the address in the file was 1001 11th St. North, the billing address is listed as 101 11th St. North. After several phone calls and letters between lawyers, the bill finally gets resolved and the credit card company has lost a customer for life.
So What Happened?
Profisee explains:
In this case, the master copy of the data was accurate, but another copy of it was flawed. Master data must be both correct and consistent. Even if the master data has no errors, few organizations have just one set of master data. Many companies grow through mergers and acquisitions, and each company that the parent organization acquires comes with its own customer master, item master, and so forth.
The Perks of Creating a Master Data List:
- A single, consolidated bill, which saves money and improves customer satisfaction
- No concerns about sending the same marketing literature (ads) to a customer from multiple customer lists, which wastes money and irritates the customers!
- A consolidated view of items to eliminate wasted money and shelf space as well as the risk of artificial shortages that come from stocking the same item under different part numbers.
Disclosure of Material Connection: This is a "sponsored post." The company who sponsored it compensated me via a cash payment, gift, or something else of value to write it. Regardless, I only recommend products or services I use personally and believe will be good for my readers. I am disclosing this in accordance with the Federal Trade Commission's 16 CFR, Part 255: "Guides Concerning the Use of Endorsements and Testimonials in Advertising."