Understanding Master Data Management

Master data management (MDM) is a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, semantic consistency, and accountability of the enterprise’s official shared master data assets.

In practice, master data management helps organizations create a trusted foundation for analytics, reporting, and operational processes. It becomes especially valuable when multiple systems hold conflicting versions of the same customer or product data.

In other terms, MDM is a comprehensive process of linking all data critical to the enterprise into a master file, hence streamlining data sharing across the enterprise.

Data-Driven Challenges:

Poorly-managed customer data can result in unnecessary risk and can put significant cost savings out of reach. There are a number of critical challenges an organization faces to derive meaningful value from customer data managed within its source systems.

These challenges are also a major reason organizations begin to think about MDM as a long-term data governance and integration strategy. Without it, data quality issues tend to grow as the business expands.

Some key challenges are:

• Customer data is managed in disparate source systems
• Delayed updates from source systems result in outdated and stale data being fed into marketing and customer touch points
• Management does not get a single version of the truth
• Compliance regulations like FACTA, FDA-GUDID, and GDSN are not adhered to due to factors such as…
  Data decay
  Multiple versions of customer data across different source systems
• Legacy CIF with rigid architecture, out of sync with agile environments
• Mergers and acquisitions compound existing challenges by bringing in more source systems along with customer data
• Exponential growth of data results in bad data quality, affecting decision-making

A strong master data management process helps reduce these issues by creating consistent rules for data creation, maintenance, and synchronization across systems. 

Why Master Data Management?

Master Data Management addresses core data challenges every enterprise faces and ensures effective management of data as an enterprise asset.

A modern master data management technology stack also supports better collaboration between business and IT by making shared data easier to govern and distribute. This improves both speed and confidence in decision-making.

The following are the key benefits of implementing a Master Data Management solution for an enterprise:

• Golden Copy of the Master Record sourced from multiple data providing systems.
• Process-driven, real-time data updates ensure improved data accuracy
• Accurate and reliable internal and external reporting with reduced compliance risk
• Streamlined data operations and efficient data architecture ensure the right data is available for the right system at the right time
• Reduced complexity in retrieving data from multiple systems, thus supporting agile environments
• Reduced cost of ownership (personnel and infrastructure) since data is centrally managed
• Faster management decisions since data required for management information reports are centrally available in the master data management repository

MDM Implementation Challenges:

There are a number of challenges faced by teams implementing MDM solutions.

These challenges are often less about technology and more about alignment, ownership, and change management. That is why an MDM program should be treated as an enterprise initiative rather than a pure IT project.

Some key challenges are:

1. Stakeholder Engagement – Like the problems faced by any back-end system, MDM programs are impacted by a lack of stakeholder commitment, as MDM is seen as a pure IT initiative. It is very important for any MDM implementation project to develop a plan to engage business users very early to make them understand the benefits MDM will bring to their daily functions.
2. Executive Sponsorship – Since MDM involves a lot of change management, obtaining and sustaining executive sponsorship throughout the implementation phase is key to adoption. It is necessary to show quick wins by integrating reporting and CRM systems as a priority.

Quick wins are especially important in the early stages of any master data management program because they build trust and demonstrate value. Common starting points include customer reporting, CRM alignment, and duplicate reduction. 

2016 Analyst Quadrant on Master Data Management Solutions

Informatica has been identified as the market leader, offering niche solutions that satisfy the ever-changing MDM landscape. Mastech Digital is an Informatica partner, offering premier MDM implementation services to leading technology enterprises.

While the market has evolved significantly since then, the core need remains the same: organizations still require scalable master data management capabilities that can support multiple business domains and changing operating models.

Conclusion

Today, master data management is no longer limited to customer data alone. It now supports broader enterprise goals by improving consistency, compliance, and decision-making across the business. Mastech Digital is here to facilitate that management, efficiently and effectively.

Rajkumar Selvam
Director, Technology – Mastech InfoTrellis