When Master Data Management (MDM) is brought up as an action item on the company to-do list, it's often met with a room full of heavy sighs and groans. Management teams understand that not having an MDM process has negative effects, including severe delays in daily processes, lack of confidence in master files, and uncertainty in providing regulatory reporting. However, nobody jumps at the chance to put one in place.
In an era where mergers and acquisitions are on the rise, organizations must put in the time to get MDM in check to minimize the impacts of unreliable master data.
Undoubtedly, an MDM process makes life easier. MDM encompasses the procedures and technology put in place to maintain and protect the integrity of critical data sets. A well-defined process helps facilitate the distribution of shared attribute data between source systems, providing one version of the truth. Quality control checks embedded in data management practices instill confidence in data used by the business for day-to-day operations. They ultimately minimize the confusion that comes with data inconsistencies.
Proactively managing master data also has a positive, direct impact on company reporting. Having access to reliable and timely data reduces hours spent researching data idiosyncrasies in order to provide accurate asset counts and regulatory information.
While there's no question regarding the benefits of MDM controls, investing in and developing a process is not free. To realize results, businesses must create a well-defined process for the entire lifecycle of the data sets being used. Additionally, they must budget for a dedicated team of resources to manage the flow of data. This team should be carefully selected as it is critical they are familiar with all data elements.
After solidifying processes and selecting an MDM team, master data files must be analyzed and cleansed. This exercise can be painful and time consuming depending on the state of the data, but it's necessary to see positive results. Custom built reports can be created to quickly identify data discrepancies for cleanup.
It is important to note, even after all master files are scrubbed, data gaps will be an ongoing issue. Sometimes specific data points, such as legacy effective dates and pre-acquisition contact information, are not available or do not exist. Implement an MDM organization now to avoid creating unnecessary data gaps in the future.
For organizations operating without a formalized way to manage company master data files, getting information is ugly. Think of unorganized vendor files causing payments sent to incorrect addresses and contradictions in product codes living in multiple systems. Without a clean foundation of master data and a process to manage updates, day-to-day business operations become sluggish. The lack of confidence in data often results in users working in offline, self-managed workbooks.
Too many organizations struggle to conduct standard business processes due to the lack of access to reliable master files. This issue is only magnified as acquisitions are made and customer bases grow.
Regardless of industry, all organizations are susceptible to the nightmare of disorganized master data. If businesses identify lack of critical data as a pain point now, it will only become more problematic as data grows. Stop perpetuating the cycle of bad data and implement MDM comprised of a robust process, clean master data, and a team that knows what they’re doing.
