Master Data Management (MDM) has been an IT industry buzzword for the last ten years. Outside of the world of CIOs and IT managers, it has been associated with the worst trends in business management: 3-letter acronyms that don’t mean much to anyone not in the loop. This can make the initial task of generating interest in the benefits of MDM a difficult proposition.
MDM, however, has a lot to offer to a business in any industry and when implemented correctly, it can drastically improve marketing strategies, sales performance and stock management, whilst consolidating a company’s data to improve data integrity and accuracy. But before we analyse the benefits of MDM for the whole business, a quick overview of what it means.
What is Master Data Management?
Gartner defines MDM as:
“MDM is a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise’s official shared master data assets.
Master data is the consistent and uniform set of identifiers and extended attributes that describes the core entities of the enterprise including customers, prospects, citizens, suppliers, sites, hierarchies and chart of accounts.”
Master Data Management describes the process of consolidating and enriching company data, such as customer records, sales and employee data using technology to create a holistic infrastructure to house data sources. Data from customers can tell a business vital information such as when to stock up and how to tailor marketing messages to best appeal to an audience. Basing decisions on data improves the accuracy of those decisions and reduces risk.
MDM should be part of a wider ‘Data First’ agenda/culture shift within your company to encourage interdepartmental collaboration and greater clarity in decision-making across the organization. Data from the Operations department could be useful to the Sales and Marketing teams, but without the proper infrastructure and systems, this data is difficult to share, and opportunities can be lost.
Another challenge presented by departments working in silos, each with their own systems and data sets, is that data becomes inaccurate, or duplicated. This means that decisions are being made by departments that don’t have the whole picture in view, or the wrong picture entirely which can lead to loss of revenue. The idea with MDM is that every department has access to the most accurate and complete data to ensure cohesion, consistency and alignment with the company-wide strategy.
From a technology point of view, an MDM solution is important for consolidating data sources and creating a central hub to ensure all departments can use data as an advantage. Any system that holds data that is deemed important can connect to this central hub. From here, it is possible for teams and departments to access accurate, consistent and relevant data to give more precise decision-making and reduce financial risk.
For many companies, these systems are the lifeline to any organisation and have been tailor-made which makes them costly to replace. The systems that were initially designed to aid business clarity have become difficult to manage due to age and the complexity of overlapping systems and the duplication of data sets.
Here are some of the benefits of a Master Data Management solution and how this will benefit the whole organisation, not just the IT department.
Accuracy Ensures Success
The most important benefit of MDM solutions is the level of accuracy and consistency it brings, company-wide. Data precision is critical during the high-level decision-making process. Incorrect and untrustworthy data costs money and can set back projects, not to mention the financial implications to your share price and bottom line. Think back to a time when an incorrect data set has cost your own company weeks in project time, or thousands in a sub-optimal investment.
Data is central to the decision-making process because it is used to assess risk, decide stock levels, and it guides marketing strategies. Every aspect of a business relies on data to ensure success. MDM ensures that data is correct and up-to-date.
Target the Right Person, at the Right Time, Every Time
With this improved data, marketing and sales teams can create more precise audience segmentations. MDM solutions gather every aspect of customer data possible, including past purchases, preferences, and location to build individual customer profiles.
This information can be utilised by Sales and Marketing to ensure your customers are receiving the messages that appeal to them across multiple channels, improving the customer experience and leading to greater sales. Personalised marketing campaigns give greater returns on investments by delivering the right message to the right person, at the right time.
Data-proven marketing campaigns and omni-channel customer experiences lead to deeper market penetration and increased profits. Accenture’s Global Consumer Pulse highlighted that omnichannel customers deliver on average 3.2 times the sales of their store-only counterparts due to the 360-degree view of a customer provided through omni-channel purchasing MDM enables your marketing and sales teams to leverage these channels that consumers are now using, including mobile shopping, and Click-and-Collect services to maximize the returns on your marketing spend.
Improve Your Supply Chain
As well as data-based marketing campaigns, an MDM solution can improve a company’s supply chain and reduce stock wastage, by identifying sales performance to inform accurate stock forecasting in real-time. This simple change has the potential to drive efficiencies throughout the supply chain and reduce the impact of wastage on the company’s bottom line.
An MDM solution allows sales teams to discover cross-sale and up-sell opportunities, using data to highlight the products that are resonating with your customers. Sharing data in this way and removing siloed operations, through a central hub that is accessible by all teams will highlight previously unseen opportunities to increase profits and better serve your customers.
To highlight these benefits in a practical way, we will focus on a few of the industries that may benefit from a MDM solution and why.
Retail
In the Retail Industry, MDM solutions gather customer information, such as measurements, products of interest and whether the customer is a high value shopper. By gathering data every time ‘John Smith’ shops via any shopping channel, the database builds a customer profile. This profile can contain geographical location, John’s favourite type of shoes and the shoe size of John.
An MDM solution can then monitor the stock level of those shoes in John’s area, and in the case that there was a stock surplus, a personalized promotional message would be sent to John. This means that the customer is receiving promotional materials that will encourage a sale, and leaves a good impression on the customer, improving customer loyalty.
FMCG
The world of fast-moving consumer goods depends on accurate stock forecasts to secure a steady supply flow. That means accurate monitoring of data on demand is critical to success. An MDM solution provides this precision with its golden record management system, that filters your data and deduplicates results to ensure that every item is accounted for.
Through the central hub, data from both your WMS, KPI management and eCRM, and any other system that monitors orders, you can ensure a constant supply of products and forecast any potential wastage. Improving efficiency across the supply chain cuts costs and forces down cost per unit, meaning savings for the business and their clients.
Final Thoughts
Master Data Management benefits any organisation that deals with large volumes of data. By consolidating and unifying customer records, sales data, and company information under one central hub, and by deduplicating records and removing human error, MDM is a powerful tool for analytics and decision-making.
MDM solutions increase profits by streamlining operations, breaking down siloed teams that create inefficiencies, and drawing accurate customer records that can be used to increase sales and customer loyalty. Any industry can leverage these benefits because every organisation should be using their valuable data at every level and every department to increase profits and reduce wastage.
To find out more about Data Clarity’s omni-channel MDM solution, contact our team today.MDM has a lot to offer to a business because it is not just another acronym. Implemented correctly, it should greatly improve marketing strategies, sales performance and stock levelling, whilst consolidating a company’s data to improve accuracy and consistency.Master Data Management, MDM, Retail, Retail Solutions