The Next Big Thing in Why Master Data Management Is So Important!
Today we are writing history. Once and for all, we will answer the question of why Master Data Management is that important. And let me be frank. Master Data Management is a topic with a bad reputation. Boring, unsexy, not needed are just a few things people tell me when we discuss Master Data Management.
However, if you are dealing with that topic, this grey image can be a massive advantage. Because, besides being considered as boring, Master Data Management is usually wholly underrated. Moreover, many companies still don’t know the vast potential of Master Data Management. That’s exactly why so many people ask me the question, “Why Master Data Management is important?”
We genuinely think that master information is a vital driver that allows businesses to use the huge number of data that is dynamic. Master information represents the power of the very valuable advice a business possesses. Afterward, master information helps every section to deliver their occupation.
What Is Master Data Management About?
Master Data Management aims to provide a seamless process of providing master data to all relevant processes along a process chain.
Collecting master data in a central repository
Providing transparent data maintenance processes
Provision of master data to systems and stakeholders
Defining data governance procedures
Why’s Master Data Management Important — Here Are The Reasons
Accordingly, the identical master information is accumulated twice and more frequently. And much worse, the identical master information is preserved by more than 1 department.
What is that? Because a substantial portion of an organization's master information is not department-specific. To the contrary, it's --quite frequently -- demanded on a corporate-wide degree.
That means every object of master information is gathered only once. For that reason, it reduces the workload in company departments because of this decreased or removed attempt to keep master data by themselves.
2 - Master Data Management Improves Data Quality
One of the main deficits of unstructured, decentralized data management is about quality. Every department is maintaining its own truth. And this inevitably leads to problems in terms of reporting or cross-functional processes.
On the contrary, a thorough Master Data Management acts as one single source of truth. A source that provides all relevant master data and directly leads to the benefit of superior data quality. Data quality in this context isn’t only about the correct data but also the most up-to-date.
3 - Data Compliance & Governance Processes
Having all master data in one central place enables companies to set up dedicated data compliance and governance processes. State-of-the-art master data systems provide the possibility to define clearly structured data responsibilities.
A structure that answers the question of “Who is allowed to change and maintain master data at certain stages.” Thereby, responsibilities are clearly documented to ensure only the responsible department/person maintains data. Again, this directly leads to improved data quality.
4 - Reduces time-to-market
When introducing new systems and applications, a central master data program lessens the installation effort hugely. Rather than manually setting up master data inside the new alternative, linking it to the key master data system right supplies the essential master information.
Consequently, the time-to-market for new systems, alternatives, or functionalities is hastened immediately and sustainably. A significant reason that's often underrated yet so significant!
5 - Improved Business Processes Efficiency
Master data management represents the perfect single-source-of-truth to support business processes. Since many master data systems offer easy to use (mobile) applications, employees can access the latest and high-quality master data whenever needed to support their processes. Accordingly, employees quickly access a vast knowledge base. Ultimately, that helps to drive process efficiency.
6 - Improves Decision Making
Master data management offers the possibility to provide a holistic, comprehensive, and complete view of a company’s master data across the organization. As a result, company-wide decision processes rely on the identical and latest set of master data. Subsequently, it helps executives, senior management, and all other employees to make informed and fact-based decisions.
Actually, this is a very important aspect you have to understand. When it comes to decision making, dynamic data is most often in the spotlight. However, as mentioned in my initial statement, master data is actually the powerhouse that drives your dynamic data.
7 - Master Data Management Eliminates Manual Processes
At many companies, maintaining master data still reflects a highly manual task. Moreover, Excel spreadsheets are a prominent tool when it comes to master data maintenance.
Why is this a benefit? First of all, manual processes are always a source of failures and a driver of inefficiency. Secondly, and although Excel sheets are easy-to-use, they show massive disadvantages when it comes to exchanging data with other systems.
A centralized and system-based Master Data Management eliminates both of the issues. There’s no longer a need for creating and maintaining personal Excel files. On the contrary, data governance processes should even restrict that approach. On top of that, a master data system —usually— offers a broad range of integration possibilities.
