Why Master Data Management?
Posted by Bob Brauer on Wed, Feb 01, 2012
Master Data Management, also known as MDM, often comes up in conversation as a key information technology initiative for an enterprise, including considerations for leveraging the Cloud as an ideal environment for MDM. We can save Cloud considerations for a later post, so for now, a very basic MDM primer might be a good idea for those who scratch their head at the mere mention of the term. It's actually a much simpler concept than descriptions of it often entail.
MDM is simply about keeping non-transactional data, such as customer data, in a single place (logically or physically) to be shared across many different systems. When each system that uses this customer data, whether it is a CRM system, an accounting system, a support system, or a business intelligence system, updates or adds to data about a customer, all connected systems gain the benefit of that change.
This "master data" approach also eliminates inconsistencies of things like contact information and customer notes across different systems where customer data may be captured, and does a far better job of keeping customer data current. To use a few timeworn adages, with MDM we are keeping all of our customer data eggs in one basket, with the idea that the whole is greater than the sum of the parts.
The other key benefit to maintaining and managing customer data in one place for use across multiple line-of-business systems is that customer data-specific activities can be performed with that data, benefitting each connected system that makes use of the data. This includes customer data quality initiatives, not only validating and correcting customer data to keep it as current as possible, but also using external third party data sources to create a more vivid, detailed view of an organization's customers. Other activities include customer data consolidation (matching and eliminating redundancy), data governance, easing the distribution of customer data (the Cloud), better customer communication, and a foundation for richer analytics that utilize customer data.
At the end of the day, customer data is one of a company's most important assets. The MDM approach helps maximize the value of that data for use.