This is part of Solutions Review’s Premium Content Series, a collection of columns written by industry experts in mature software categories. In this post, Rex Ahlstrom, CTO and EVP of Growth & Innovation at Syniti, outlines the key fundamentals of master data management and ways the technology can transform your business.
The modern business is made up of multiple systems, each storing data that the business needs to run its business, such as: B. Information about suppliers, customers, products and services. This is what’s known as master data, and it’s often stored in many places – independent of data from other systems – and changes made in one location can take time to appear in other systems.
This can happen due to natural growth. It could also be the product of a merger or purchase. Whatever the reason, master data management is critical to the performance of an organization, no matter how many data sources or systems are involved. Because data silos result in disjointed, inaccurate, and unreliable data sets, your organization’s business decisions are based on guesswork. This is undoubtedly a problem.
Missing or poor-quality data leads to decisions that can lead to the failure of an initiative or an entire company. This could include wasted marketing dollars, degraded consumer experiences, reduced compliance, and missed opportunities. Productivity, revenue, and consumer confidence can all suffer from poor data quality.
All of these problems point to the need for master data management.
Benefits of master data management
Master data management, at its most basic level, is about getting the data right before something breaks. Master data management also ensures that a company’s most important data is based on “one version of the truth”. Master data includes items such as vendors, partners, customers, products, vendors, workers, and materials. In most cases, master data differs from transaction data. To create, update, delete, and distribute these data items across key business systems, master data management uses a collection of processes and software tools.
When you begin master data management, your primary goal is to establish a single source of truth for your organization’s most important data and the processes that support it. To do this, data from marketing, sales, supply chain management, manufacturing and all other processes connected to the entities listed above must be combined and made available as a single point of reference for all business systems and domains.
The following advantages result from a successful implementation of master data management:
- More Innovation: Creating new products is more efficient when accurate supplier, supplier, material and customer data is readily available.
- Reduced time to market: Using real-time data, rather than depending on people and tools to deduplicate and manage key master data elements, significantly reduces time to market for new products.
- Improved customer service: With a personalized and consistent customer experience across all channels, customer loyalty and sales are increased.
- Increased sales: Accurate data ensures that the right orders are sent to the right people at the right time.
Getting buy-in is crucial
Despite all the obvious benefits, many organizations continue to struggle with data management. One of the main reasons is that master data management requires a significant level of change management.
Typically, someone in a company decides to develop a new master data management system that includes the introduction of all rules and forms for creating, updating and deleting master data. Then they introduce users to the new system and tell them, “Here – use this.” But then things grind to a halt: users suddenly find they don’t have all the information they need or don’t understand how to interact effectively with it with the system, resulting in delays in the effective use of the system.
You must have the right processes in place to ensure data providers understand how the processes improve business performance and simplify their day-to-day interactions with key business systems. In order to properly execute the software and change management processes required for success, organizations need to engage with business users to find out how they’re doing things now.
Implementing master data management also requires broad business, IT, and executive support. Otherwise, data providers might disagree, arguing, “If it ain’t broke, don’t fix it.” People in the organization can be content with relying on spreadsheets because they’re used to them and don’t want to try anything new. This hesitation is often related to a failure to understand how poor-quality data impacts virtually every aspect of the business—and how individuals can help solve the problem.
The vital role of education
Getting approval for master data management – and then implementing it successfully – requires training. Organizations need to help employees understand the significant impact of erroneous data and the benefits that can be achieved through proper master data management. This includes knowing how it improves their daily work and how it benefits the organization as a whole.
Typically, people are unaware of the long-term consequences of incorrect data entry. It’s not that they’re intentionally trying to make bad dates; They just don’t see how something that seems insignificant at the beginning of a process – e.g. B. a bad description of a material – can have a significant impact on the business and how much that can cost later. The key is to show them how they can contribute to the solution.
Embrace the iterative process
Another point to keep in mind when setting up master data management is that companies should avoid doing too much too soon. Organizations want to see immediate results after implementation and be able to monetize business from them. But you can’t expect to completely redesign the process, roll it out, and have error-free data from there. That’s not how it works. Instead, start by focusing on one component that has a measurable business key performance indicator (KPI) and that is quickly showing improvement. Start by focusing 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 evolves over time.
Worth the effort
Master data management is not a panacea and certainly not easy. However, those who have walked this path can attest to its value. You can be assured that your master data is accurate and reliable if you continually strive to orchestrate operations and enforce data quality. It may be difficult to implement master data management across an organization, but with the right transitions, it can be done successfully. It must start with education and stakeholder consent, while recognizing that as with most things, it is an ongoing process and not a one-off endeavor.