One of the goals of master data management (MDM) is to maintain a single access point to specified data sets, thereby creating a single view of information. Whether customers, products, or other entities, organizations may struggle to measure the actual benefits of consolidating and centralizing data to have a single viewpoint of data. Beyond the ability to use a centralized access point to gain a better perspective of what is going on in the organization, organizations are always required to provide an account of the financial benefits of new IT initiatives. Within MDM, business intelligence (BI), business process management (BPM), etc. the immediate return on investment is not always seen. Unfortunately, some organizations choose not to look beyond immediate financial gains when looking to implement new solutions or change the way they currently do business.
The management of master data touches more than just the information that is maintained. By creating data repositories that reflect business functions, organizations can develop views of data that give users access to the information required to do their jobs effectively and efficiently.
To better understand the business benefits of MDM, it is important to recognize an organizations general information infrastructure and how silos of data have been formed within organizations creating a splintered view of what is occurring within the organization. Then it is possible to understand the benefits of the creation of a centralized repository of data regarding both the information accessed and the business benefits that go beyond data.
Fractured Information Views
Due to the nature of information architecture and the development of enterprise information systems, the general structure of data is that it exists in silos across the organization. Before the concept of centralized data stores, many systems were developed to meet a business function without taking into account the big picture. Consequently, with the addition of new systems, data storage volumes and the number of transactions grow exponentially. This means that in many organizations several disparate systems exist that contain similar information but that dont interact with other relevant systems within the organization. In addition to this lack of interaction, duplicate data may be processed in different systems, creating duplicate work for end users and different data structures. This adds to the difficulty of looking for and identifying like data across the organization.
The bottom line is that each system only gives a fractured view of what is occurring within the organization. For instance, a customer relationship management (CRM) system may not have all of the account information of their customers from buying habits and payment histories, to product preferences. Different bits of information that reside in disparate systems, when brought together, create a full view of the customer. Add to this data quality efforts to standardize data views and to create a consistent view of data across the organization and the beginnings of MDM are created.
Although MDM solutions give organizations central access points and a 360-degree view of data and entities, actual ROI is not always easy to quantify. After all, quantifying better customer service or identifying a decrease in product cycle times and tying that to an MDM initiative may not be intuitive for organizations.
MDM Benefits Explored
There are many benefits for organizations choosing to implement an MDM solution that result from creating a consolidated view of data. To identify the ROI associated with MDM, some key benefits should be highlighted that go beyond the consolidation of data towards increasing efficiencies within organizations and lowering the cost of doing business.
The most obvious benefit of customer data integration (CDI)/MDM solutions is the creation of a single customer view. By creating a centralized access point of contact to customer, product, or other forms of data, not only are organizations able to gain a better overall view of business entities and what is occurring with accounts, but also data quality efforts become consistent. For organizations trying to attain one view of entities, the ability to ensure data quality throughout the organization means that consistency of business rules, data cleansing and the standardization of business processes will become an ingrained process within the overall environment.
Despite the fact that there is a constant focus on business pains and a push to focus on business rather than data, an organizations healthy business environment depends upon the data that supports it. Therefore, having strong data quality efforts in place helps organizations maintain healthy information systems, identify how systems across the organization interconnect and enable better business process management. Although IT benefits are important, business benefits are also relevant. Using customer data as an example, end users can provide better service quicker thereby increasing customer retention and satisfaction.
Because of compliance and the need to maintain specific data sets and output on a regular basis, MDM enables organizations to manage the processes essential to meet compliance requirements. This in turn translates into the ability to plan and budget more efficiently. With a broader understanding of what is occurring within the organization, financial processes can offer a more complete view of the organization.
Finally, building an MDM solution enables organizations to develop and maintain a strong data governance program. Because all of the mechanisms have been put in place, data governance becomes a natural extension of an MDM implementation.
Focusing on Value
Whether by focusing on business or IT, the values of MDM are numerous. Actual implementation of an MDM solution is process and resource intensive as well as continual based on the need for constant data quality and business process improvements. However, these efforts enable organizations to have a synchronized and 360-degree view of the data that helps drive their business success.
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