Every business and organization creates massive amounts of data. Product data, customer data, and transactional data all play significant roles in your company’s business processes. It is likely that you already have some sort of data organization structure in place, like a CRM for customer relations. However, there are potential usages for all types of data that your company produces.
What is master data?
You are likely familiar with the types of data mentioned above, but you may not be familiar with master data. Master data is best described as a single source of truth. It is the core data that all other data sets refer back to. This type of data contains a consistent set of attributes and identifiers that determine the essential entities of a business. Master data provides context and checks the validity of all sets of data so that it can be useful to analytical processes. This data type is essential because there is no precise way to share and compare data across different systems without it. So what is master data management?
What is MDM?
MDM, or master data management, is the organization and storage of core data. An MDM strategy ensures high data quality by creating and maintaining a system of record. This system of record makes certain that any inconsistencies or errors within a single one of your applications do not spread to other data entities within your organization. For example, suppose you own a floral arrangement business that operates both in-store and online. In that case, you will want to make sure your in-store data management system can efficiently communicate with your online system of record.
If a customer has made previous orders in-store, it is likely that their address has been stored in the POS system. Should this customer decide to order online next time, the online ordering system should be able to recognize their address and acknowledge that they are an existing customer. Now, if an address is incorrectly entered into one of the systems, it may result in shipping delays or communication issues. With an MDM system, each data set will be able to compare itself to the “single source of truth,” ensuring that the correct address is confirmed and the wrong address does not interfere.
Why is MDM important?
The amount of data your business produces is near-impossible to imagine. Aside from the easily visible data like customer contact information, inventory levels, and transactions, there are many less-detectable data types that are valuable when adequately monitored and analyzed. For example, hierarchical data is crucial for data interpretation. It identifies the causal relationships between data sets.
If there have been dips in your revenue or other scenarios requiring an explanation, hierarchical data will help make sense of it. The many types of data that a business produces can be intricately intertwined and difficult to monitor. For this reason, a master data management system is an essential step for your company to take. Not only do each of your data sources need to be able to store data correctly, but they need to communicate that data with one another to avoid repetition or inconsistencies.
Every business from small to enterprise-level can benefit from master data management. Making your data work for you can improve your business processes and guide company leaders in the decision-making process. For a more in-depth analysis of master data and how it can help your business, consider consulting with a leader in data science software technology. Companies like TIBCO can provide insights, products, and services that will help your business make the most out of the data it generates.