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Ventana Research: Master Data Management - Business and Technology Trends, Part 2

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The guiding principle of MDM is not open to quarrel: It seeks to establish and maintain a high level of consistency and reliability of data - a level that business can manage and IT can support across the organization. Using MDM, a company can put in place and then manage processes that give each line of business accountability for its data, regardless of its technological expertise, and enforces common business practices and rules for conducting business and analyzing information. Having a set of common definitions of data across the organization promotes efficiency of business processes, which in turn can improve customer service.

For all lines of business, including finance, MDM provides a way to automatically produce a unified definition and view of all customers and products without forcing every department and business unit to use the same application or format. For IT groups, it provides a way to ensure accuracy and consistency of data across the organization and to give all departments confidence in the reliability of the data they create and receive from other business units.

The research shows that companies take different approaches and go through different stages when adopting MDM. One-fifth of companies begin by addressing a specific business issue within a line of business. Almost half begin with a more widely based initiative affecting the whole company with the intention of making the initiative enterprise-wide. And 36 percent reported their initiative is enterprise wide.

MDM is Key to Business Success

The most often cited business benefit (34 percent) respondents expect to achieve from improved data consistency is the increased accuracy of reporting and business intelligence. 

However, another finding indicated that MDM has reached the next stage of adoption: More than half of organizations (58 percent) are focused on reducing the cost to the business from errors in their data - for example, identifying the cost of sending the wrong product to the wrong customers because of errors in product codes. We identify this as a best practice for early adopters building a business case for investing in MDM. These costs are not trivial for any company, regardless of size.

MDM is a Key Technology

As a technology that spans the organization, master data management interoperates with other technologies through direct interfaces to enterprise applications and information systems or through a service-oriented architectures.

Not surprisingly, most survey respondents (70 percent) said that a centralized MDM hub or repository is the most important technical component of their strategy, and 58 percent of respondents said MDM is now a required tool for data integration.

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