Master data management (MDM) is the discipline and/or technology that provides a trustworthy view of a company’s data and makes that data readily available to other business functions. To understand MDM, it is important to first define master data; master data is the critical business data of an organization that includes product, supplier, and customer information.
Master data management solutions help ensure that a company’s data is accurate and governed across enterprise applications, such as enterprise resource planning (ERP), customer relationship management (CRM), product lifecycle management (PLM), enterprise performance management (EPM), and more.
Master data management software is the combination of applications and technologies that consolidates, cleanses, and augments this master data and synchronizes it with applications, business processes, and analytical tools. MDM software provides a simplified master data management process to help solve many of the challenges businesses face when dealing with managing enterprise, product, and customer data.
When master data is incorrect or scattered and hidden throughout the organization, it can negatively impact all aspects of the business. Often, having inaccurate master data results in conflicting figures for the same metric, excess inventory, late-to-market acquisitions and company reorganizations, and inaccurate demand forecasts. In short, without master data management software, there is no unified focus on aligning master data with the organization’s business needs and strategy.
Although everyone in the business uses master data, few people have visibility into its full lifecycle. Key stakeholders often don’t know the data source, how accurate it is, or how to increase its value. This lack of visibility is more often than not due to the many disparate enterprise solutions and business functions that author and consume data.
When you consider the number of stakeholders in an organization—both internal and external—it can quickly become clear why it can be difficult to access current, accurate, and complete information stored across the business. Factor in mergers, growth, and globalization, and information can end up located across multiple, disconnected systems and databases, each of which are most likely housing different versions of the same information and of varying quality. Because of this, reporting and analytic solutions cannot be relied upon to help inform strategic and confident business decisions. To keep this data in sync, many organizations rely on master data management software.
The benefits of master data management software is that it can provide transparency, accuracy, and efficiencies to the manual processes most businesses use when dealing with managing enterprise, product, and customer data.