5 Master Data Management Basics to Help Transform Your Business

This is part of Solutions Review’s Premium Content Series, a collection of contributed columns written by industry experts in maturing software categories. In this submission, Syniti CTO and EVP of Growth & Innovation Rex Ahlstrom outlines key Master Data Management basics, and ways the technology can help transform your business.

The modern business is made up of several systems, each storing data that the organization needs to run its operations, such as information about suppliers, customers, products, and services. This is what’s referred to as the master data, and it’s frequently stored in many locations—independent of the data of other systems—and changes made in one site can take time to show up in other systems.

This might happen because of natural growth. It could also be the product of a merger or purchase. Whatever the reason, master data management is critical to a company’s performance, regardless of how many data sources or systems are involved. Because data silos result in disjointed, incorrect, and unreliable data sets, your company’s business decisions will be based on guesswork. That is, without a doubt, a problem.

Data that is missing or of low quality leads to decisions that can lead to the failure of an initiative or an entire company. This could involve squandered marketing dollars, degraded consumer experiences, decreased compliance, and missed opportunities. Productivity, revenue, and consumer trust may all suffer due to poor data quality.

All these issues point to the need for master data management.

Benefits of Master Management of Data

Master data management, at its most basic level, is about getting the data correct before it wrecks something. Master data management also ensures that a company’s most vital data is based on “one version of the truth.” Master data includes items such as suppliers, partners, customers, products, vendors, workers, and materials. In most cases, master data is distinct from transactional data. To produce, update, delete and distribute these data items across essential business systems, master data management employs a collection of processes and software tools.

When you begin a master data management journey, your primary goal is to establish a single source of truth for your organization’s most significant data and the processes that support it. This entails combining data from marketing, sales, supply chain management, production, and any other processes connected to the entities listed above and making it available as a single point of reference for all business systems and domains.

The following are advantages to be gained by successfully implementing master data management:

• Increased innovation: New product creation is more efficient when precise supplier, vendor, material, and customer data is easily available.
• Reduced time to market: Using real-time data rather than depending on people and tools to deduplicate and manage important master data elements improves time-to-market for new products substantially.
• Improved customer service: With a personalized and consistent customer experience across channels, customer loyalty and sales increase.
• Greater revenue: Accurate data guarantees that the right orders are sent to the right people at the right time.

Getting Buy-In is Crucial

Despite all the apparent advantages, many businesses continue to struggle with data management. One of the main reasons is that master data management necessitates a significant amount of change management.

Typically, someone in a corporation will decide to develop a new master data management system, which entails putting in all the rules and forms for creating, updating, and deleting master data. Then they present the new system to users and tell them, “Here – use this.” But then things come to a halt: users suddenly discover they don’t have all the necessary information or don’t understand how to engage with the system effectively, causing delays in using the system effectively.

You’ll need to have the correct processes in place to ensure data contributors understand how the processes will improve corporate performance and simplify their interactions with key corporate systems on a day-to-day basis. To properly execute the software and change management processes required for success, organizations need engagement with business users to discover how they do things now.

Implementing master data management will also require broad business, IT, and executive support. Otherwise, data contributors may object and argue that “If it ain’t broke, don’t fix it.” People in the company may be content to rely on spreadsheets since it’s what they’re used to and they don’t want to try something new. This hesitancy is frequently related to a lack of knowledge of how poor-quality data affects practically every aspect of the business – and a lack of understanding of how individuals may help overcome this issue.

The Vital Role of Education

Getting buy-in for – and then successfully implementing – master data management requires education. Organizations must assist employees in comprehending the significant impact of faulty data and the benefits that may be gained via appropriate master data management. This includes knowledge of how it will improve their day-to-day work and how it will benefit the organization as a whole.

Typically, people are unaware of the long-term consequences of incorrect data entry. It’s not that they’re attempting to make bad data on purpose; they just don’t realize how something seemingly insignificant at the start of a process – e.g., a poor description of material – can have a significant influence on the business and how much that can cost down the road. The key is to show them how they can contribute to the solution.

Embrace the Iterative Process

Another point to remember when establishing master data management is that companies should avoid trying to do too much too soon. Organizations want to see immediate wins after implementing it and be able to demonstrate a business return as a result. But you can’t expect to perform a complete redesign of the process, roll it out, and have faultless data from then on.

That isn’t how it works. Instead, begin by focusing on one component that has a measurable business key performance indicator (KPI) and that quickly shows improvement. Begin by concentrating on one aspect at a time, and then iterate. Master data management is not a project that should be tackled all at once. It’s a process that unfolds over time.

Worth the Effort

Master data management isn’t a silver bullet, and it’s certainly not simple. Those who have taken this path, however, can attest to its worth. You can be confident that your master data is correct and reliable if you make a continual effort to orchestrate operations and enforce data quality. It might be difficult to implement master data management throughout a whole company, but with the right transitional steps, it can be done successfully. It must begin with education and stakeholder buy-in, while also acknowledging that, like most things, it is an ongoing process rather than a one-time undertaking.