In a modern fast-changing business environment data management can both cause a great failure and lead to a great victory. Which path you will go down totally depends on master data management (MDM) you practice in your organization. There is some good advice from Synopps company on master data governance that is applicable for any entity.
Attach MDM to General Strategy
It’s obvious but should be said: an MDM strategy must be aligned with a general corporate strategy, be an organic part of it like a wheel is part of a car. Otherwise, there will be no synergy, instead you will face a situation where various components of the general strategy clash with each other.
Master data management has two aspects. The first concerns failures which are caused by a lack of MDM strategy or flaws in it. The second is about benefits which the proper MDM can bring.
Absence of MDM Strategy Means Problems
There are a few major challenges that organizations that ignore master data management tools face.
Various units across an entity collect data needed for their operations. Often it’s the same data. For example, information about a piece of equipment is held in a production unit, financial unit, and maintenance unit. And there is staff that handles this information — inputs it into a database and renews it. All these operations require resources which means some time and money are spent.
This information can change over time. It’s good if the records are changed simultaneously in all databases and thus remain synchronized. But in practice this doesn’t occur this way. While a factory’s machine is dismantled and sold for scrap, it may still be present in a financial department’s records, and a supply unit may be buying dispensable materials for it to be running.
Duplicates and inconsistencies outlined above are typical and most common downsides of the absence or lack of MDM. In their turn, they lead to a number of risks that can cost a lot of money.
Inconsistencies in records across corporate databases may cause incompliance with regulation or controversies in reports. For example, a license for operations with hazardous materials requires regular prolongation for a certain period, normally five years. In a situation when information about a license is contained in various departments, it’s easy to get into a mess about which one is responsible for renewal of the permission.
Getting Your Data Right With Master Data Management
No matter which organization you have, be it a commercial company or a government body, the main method for bringing master data records is the same — the creation of the “golden record”, or a single source of truth (SSoT). This is a database where records are right and renewed in time and which serves as a reference for all other databases. It can come in different forms. There is a variant when an SSoT is the only MDM database, and all units take it for information. Another option envisages that all corporate units have their own databases, but periodically refer to the SSoT to check their records with the right ones. The third model combines these two.
Whichever one you choose, that’s your first step to a proper MDM strategy. With such a strategy in place, you will face no duplicates, inconsistencies and the risks associated with it.
There are more benefits to it. Even young organizations with a relatively short business life have a lot of different data formats which they keep their records in. That happens because of the diversity of software tools an entity implements. While this is normal and to some degree unavoidable, this makes the exchange of data within an organization more complicated. Establishing an SSoT makes an entity select a unified format to store master data which turns data transfer from one corporate unit to another into a smoother process. With a much less possibility for a mistake or having an inconsistent or incomplete or outdated piece of information.
A single source of truth is an answer to a question about how to manage your data in the right way. That’s enough. You can stop here being satisfied with the fact that you will not face an unpleasant failure.
But there is more to it.
MDM: Going to Level Up
A solid master data management is a foundation on which you can build a system providing insights into your business.
As any data, master data can be aggregated and analyzed. An artist has a pair of steps back to have a glance at his picture and evaluate how things look. The same is right here too. Often one look at an aggregated data is enough to see opportunities. For instance, pieces of information accumulated in one report, previously separated, reveals excessive stocks of expendable materials suggesting that the purchase of them can be significantly reduced.
Other sources of insights are more sophisticated. It requires drawing correlations between seemingly unrelated chunks of data and finding hidden relations. For example, records can help discover the fact that a segment of consumers prefer a certain type of product.
Are there higher levels in the art of master data management? Perhaps there are. With the help of Synopps company you will successfully lay the foundation for a right management of data and will be able to further build the skills.