Many companies work with a large number of systems and applications, in which all kinds of basic data are stored. Information about customers, products and suppliers, for example. However, this ‘master data’ is almost never exactly the same in the various systems. And the data is usually not synchronized either. With all the adverse consequences this entails.

Risks of incorrect and inconsistent data

In addition to causing an uncontrolled growth of information, manually correcting errors and inconsistencies is costly. Moreover, companies that do not have the right information run the risk of making wrong decisions, which can lead to disastrous consequences. Think declining sales and walking away customers.

Master Data Management

Thus, for good business operations, correct master data is crucial. This can be achieved by storing and maintaining the master data in a centralized location. The business-critical processes of an organization will use this master data and therefore always draw on this central domain storage, because this contains one version of the truth. Master Data Management encompasses the entire process around this, including monitoring, follow-up, control, governance and compliance.

Technology and business processes

Master Data Management consists of two parts. On the one hand, the technology needed to centralize the data and the means to monitor the correct quality of this data, and on the other hand, all business processes that must be adapted to this. It is important to implement this in the organization in a controlled way. MDM is not something you can pick up as a project and implement once, it is a ‘continuing story’.

Key to success

For an MDM initiative to succeed, it is essential that it be supported by management. Moreover, the domains and the business processes that need to be adapted to them must be known. If the organization has no vision to optimize the existing business processes to the current requirements of the market and the organization, MDM is doomed to fail.

Step by Step

Finally, it is wise not to start with a’ big bang’ scenario all at once, but to tackle MDM in phases per domain. For example, start with the ‘customer’ domain and start optimizing all associated processes. If that goes well, it’s the next domain’s turn. This makes it possible to optimize the process step by step and work as cost-effectively as possible. Moreover, the results of previous steps can be a driving force for the organization to tackle the next domains – paving the way towards a data-driven organization.

In our next blog you will read more about the myths and facts surrounding Master Data Management.