In pursuing cutting-edge enterprise technology, one unwavering truth stands out: achieving transformative data-powered innovation hinges on the foundation of comprehensive data management and governance. A robust master data management (MDM) strategy is the cornerstone of such a foundation.
But what is master data management, why is it important, and how does it affect enterprises at their core? Find out everything you need to know in the following pillar article!
Master Data Management: Table of Contents
What is Master Data Management
Master data management (MDM) is a method used to create and maintain a single master data record — the best version of truth — for each of the following entities related to an organization’s operations:
- Parties (e.g., customers, employees, healthcare providers, and suppliers).
- Places (e.g., offices, branches, and stores).
- Things (e.g., assets, materials, and products).
Many organizations manage enormous volumes of data, often resulting in fragmented, incomplete, or inconsistent information. A recent study shows that over 50% of enterprises manage at least 5 petabytes of data, and Gartner estimates that poor data management can cost businesses more than $1.2 million annually. The MDM single version of the truth (i.e., data golden record) mitigates these risks.
The data golden record is created by merging internal data sources, removing duplicates, and enriching it with external data for verification and validation. Once established, this master data record provides a trusted view across the entire enterprise, essential for:
- Promoting accurate reporting,
- Reducing data errors,
- Improving customer experience,
- Eradicating redundancy, and
- Facilitating informed, data-driven decision-making.
MDM is a cornerstone methodology and technology of data management. It empowers organizations to capitalize on their data for growth and innovation. Learn how to implement it correctly and discover the nine fundamental principles of a robust data management strategy in our MDM deep-dive article.
The Benefits of Mastering Data
Organizations basing their decisions on accurate data are significantly more likely to achieve growth. Data mastering, a pivotal component of MDM, enables businesses to extract actionable insights from their data by cleaning, standardizing, matching, and merging information from different sources.
What is Data Mastering?
Data mastering is a fundamental process within the broader discipline of master data management (MDM). It involves cleaning, standardizing, matching, and merging records from multiple sources within specific domains—such as customers, contacts, patients, products, and more—to create an accurate and consistent version of the truth that can be used as a central hub for:
- Data creation,
- Data access,
- Information updates and
- Reporting,
that are crucial for the success of the organization’s operations, analytics, and marketing teams.
Data Harmonization, a Key MDM Factor
Data harmonization aligns and integrates data from disparate sources and systems to achieve compatibility, consistency, coherence, and, as a result, informed decision-making.
When the pieces fit into one big picture, everyone within the organization can see and understand the information clearly without misinterpretation.
Challenges of Implementing Data Harmonization
Implementing data harmonization is not without challenges. Many enterprises face obstacles such as:
- Difficulty in securing executive buy-in for new data management practices,
- Inconsistent business definitions and naming conventions,
- Complex integration of legacy systems with modern technologies.
However, these obstacles aren’t impossible to overcome. With the right strategies, any organization – even those dealing with sprawling information – can get their data working together in harmony.
Data Domains
In today’s world, where organizations are buried in the weeds of complex data landscapes, effectively managing data domains has become more vital than ever.
A master data domain structures information for business operations and governance – including specific entities and attributes – for easy retrieval and accountability. It ensures accurate data handling and adherence to standards by logically grouping data elements following business functions like customer management, product tracking, or financial accounting. Common data domains in MDM include:
- Customer: Information like contact details, demographics, and purchase history.
- Product: Service or product descriptions, pricing, and technical specifications.
- Supplier: Vendor details, including contact information and contract terms.
- Location: Geographic data, such as addresses and coordinates.
- Employee: Data on job titles, responsibilities, compensation, and performance.
- Finance: Financial records like payments, budgets, and ledgers.
Data domains are quintessential categories within master data management, the process responsible for managing and controlling data entities across organizations.
Dig deeper into data domains. Discover the five key benefits of mastering data domains and how they influence the implementation of mastering data for accurate decision-making.
Multi-Domain Master Data Management (MDM)
In the actual data-driven business landscape, organizations struggle to manage and make the most of data from multiple domains. Traditional single-domain master data management (MDM) solutions are no longer sufficient for modern enterprises.
Multi-domain MDM goes beyond the limitations of single-domain MDM solutions and PIM. It provides a holistic framework to oversee, on a centralized platform, diverse data domains such as, among others:
- Product (e.g., catalogs, pricing, and inventory databases),
- Customer (e.g., profiles, purchase history, and preferences) and
- Supplier data (e.g., vendors and contracts).
A multi-domain MDM approach delivers a solid foundation for data-driven initiatives (e.g., supply chain optimization). It also offers numerous benefits, including a comprehensive customer 360 view and the ability to adapt to evolving business needs seamlessly. Moreover, putting data governance at the heart of your M&A strategy empowers you to integrate data across the business effectively.
What is PIM?
Product information management (PIM) is a specific data domain and leading component within master data management (MDM). It enables companies to automatically administrate, maintain, enrich, and distribute product information. A PIM platform makes product-related information more accessible across the whole organization. This approach:
- Guarantees accurate and consistent communication of product details across sales and marketing channels.
- Enables the incorporation of detailed product data into an organization’s data structure.
- Provides an enhanced and holistic view of master data.
Last but not least, the seamless processing and integration of product information through PIM allow effective multi-domain management.
Catalog Management
Catalog management is a structured process that strives to preserve accurate and consistent product data across sales channels. It’s a collaborative effort among data managers, product information specialists, IT teams, and C-level executives.
Nevertheless, only 33% of product managers have implemented a formal product management approach. Unstructured models can lead to inefficient workflows, fragmented data, and missed opportunities for personalization and targeted marketing.
Enforcing a robust catalog management system is imperative for businesses striving to avoid the pitfalls of inconsistent product information across channels and departments, which can significantly undermine customer trust.
The Catalog Management Implementation Process at a Glance
When implementing catalog management, choose the best solution for your needs. 56% of businesses deploy catalog management systems on-premise, while 44% use cloud-based solutions.
Companies with complex operations and large-scale inventory often opt for on-premises systems. They have in-house servers to store data, offering heightened security measures and compliance.
Once you’ve chosen your implementation style and collected raw data from multiple sources, follow these steps:
- Consolidate raw data.
- Validate the consolidated product information.
- Distribute the validated information by synchronizing updates across all platforms.
- Monitor and update the catalog in case of discrepancies to maintain reliability.
Catalog management software prevents data errors and discrepancies, thereby reinforcing customer trust. It includes several practical applications, from multichannel retailing to product lifecycle management, that help businesses remain competitive while growing at safe, sustainable rates.
Multichannel Retailing and Its Relationship with Master Data Management
Multichannel retailing is a strategy that involves selling products or services through multiple independent channels, such as brick-and-mortar stores, online marketplaces, social media platforms, mobile apps, and more. By seamlessly integrating online and offline channels, retailers can provide a unified shopping experience that meets today’s consumers’ evolving needs and preferences.
In today’s fast-paced and digitally driven retail environment, mastering multichannel retailing is crucial for businesses looking to thrive. Embracing a multichannel approach allows retailers to meet customers where they are, offering smooth shopping experiences across various online and offline platforms. Businesses that want to excel in this competitive landscape must understand the intricacies of multichannel retailing and implement strategies that prioritize:
- Integration,
- Consistency, and
- Customer satisfaction.
How Can Businesses Succeed in Multichannel Retailing with a Customer-Centric Approach?
- Create Meaningful, Relevant, and Cohesive Experiences: Implement consistent branding and seamless integration across all channels to provide customers with a unified experience, regardless of how they engage with your brand.
- Gain Insights into Customers Across Channels and Segments: Understanding customer segments and their preferred shopping channels are critical for shaping an effective omnichannel strategy, allowing businesses to target specific audiences more accurately.
- Connect Customers to the Right Products: Leverage data analytics and customer feedback to align product offerings with customer preferences and buying habits, ensuring a successful multichannel strategy.
- Predict Customer Behavior, Patterns, and Trends: Analyze historical data and trends to predict future customer behavior. This foresight helps businesses align marketing, inventory, and engagement across platforms to meet customers where they are most active.
Successful multichannel retailing hinges on cardinal principles that put the customer experience first. By leading with a customer-centric approach, businesses can better understand and cater to their shoppers’ preferences and needs. Multichannel is not just a trend but a necessity for companies looking to stay competitive, drive growth, and build lasting relationships with their customers in the dynamic landscape of today’s retail landscape.
Unlock the power of a multichannel retailing approach. Gain insight into its advantages, obstacles, and ways to overcome them. Check out our latest article: “Multichannel Retailing: Benefits, Challenges, and Solutions.”
Omnichannel Customer Journey
According to a recent Salesforce report, 90% of consumers believe that a company’s customer experience (CX) is just as crucial as the quality of its products or services.
Businesses focusing on omnichannel customer journey mapping can better understand consumer behavior and make data-driven decisions to improve customer experience.
As consumers engage with brands across mixed digital and physical touchpoints, the omnichannel customer journey has become a key focus for businesses looking to enhance customer experience. MDM plays a critical role in ensuring a seamless and personalized customer journey by providing the data infrastructure needed to:
- Personalize interactions,
- Tailor offers and messaging,
- Streamline customer support and
- Create a cohesive brand experience across channels.
By using MDM to integrate customer data, organizations can better understand and predict customer needs, improving engagement and loyalty. Enhance your customer journey with data. Learn how to create successful omnichannel experiences – from start to finish in five easy steps.
Customer Touchpoint
The demand for personalized customer experiences is at an all-time high. 71% of consumers expect tailored touchpoints, and 76% feel disgruntled when brands fail to deliver that promise.
To fulfill such high expectations, modern businesses must collect and integrate fragmented customer information to build comprehensive profiles. By understanding how consumers respond to every ad click, product search, or inquiry, they can avoid disconnection and minimize disappointment.
Customer Touchpoints: A Definition
Touchpoints are interactions between a brand and its customers, from the first encounter to ongoing engagement. For example, a social media ad might direct a customer to a landing page, leading to a purchase or newsletter sign-up, followed by a personalized email.
The Touchpoint Blueprint
By integrating data across touchpoints, businesses can streamline interactions and create tailored, cohesive experiences, avoiding disjointed customer engagement.
Create a comprehensive customer profile and increase customer engagement. Follow our quick guide: Leveraging Customer Touchpoints for Better Engagement.
Conclusion
Master Data Management is an indispensable strategy for businesses aiming to harness the full potential of their data. From creating a single source of truth with the golden record to mastering data domains and harmonizing complex data sets, MDM is the key to improving decision-making, enhancing customer experiences, and driving growth.
Whether through catalog management, multichannel retailing, or orchestrating an omnichannel customer journey, MDM ensures that data becomes a strategic asset for the modern enterprise. Organizations with robust MDM practices pave the way to sustained success in an increasingly data-driven world.
