Why Implement an MDM Solution?

Today most organizations are complex in nature. Many organizations have grown in size either organically or through M&A. In addition companies have multiple silo application systems that have been built by various teams or purchased from different application vendors. In the last decade, due to the proliferation of cloud-based applications, many businesses have deployed point solutions (such as CRMs and other marketing / procurement services) to obtain efficiencies and effectiveness in operations. This results in numerous point systems, ideal to meet specific needs, but which create challenges in bridging multiple departments or divisions. For example, when senior management wants to create better sales targets, more effective marketing campaigns or more advantageous negotiations with vendors, it is very difficult to do so. The requisite information is stored across multiple systems or in different vendor applications resulting in loss of opportunities, reduced customer retention and increased bureaucracy.

Master Data Management (MDM) solutions provide the means to overcome these challenges in a systematic and holistic manner. 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 business intelligence system, with each customer update, all connected systems gain the benefit of that change.

This "master data" approach also eliminates inconsistencies like contact information and customer notes across different systems where customer data may be captured, and does a far better job of keeping that data current. To use an age-old adage, 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 / contact / vendor data-specific activities can be performed with that data, benefitting each connected system that makes use of it. This includes master data quality initiatives, not only validating and correcting master 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, contacts, vendors, etc... Other activities include master 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 master data.