This is an op-ed contributed by Shashin Shah, CEO of Pimcore.
Companies are often at a disadvantage for not having a single, 360-degree view of their most valuable data assets (i.e. product data, customer data, and location data, among others). This information encompasses all business facets: from customers and suppliers to products, inventories, employees, and the inter-relationships between them. As a result, an error in one place can catalyze inaccuracies throughout the system.
The most common issues caused by companies’ use of multiple information management applications are data fragmentation, duplication and expiry. This often leads to higher maintenance costs, revenue losses, customer dissatisfaction, and compliance issues. Companies need to collect and maintain data in a form that is complete and accurate in order to function smoothly and derive insights from their information. That’s the reason the creation of a single, unified view of an organization— via master data management (MDM) — continues to grow in importance.
4 Key Signs Your Enterprise Needs MDM
If you have observed these general signs across various operations, it is probably time to mull over putting an MDM strategy in place.
1. Unstructured data
Unstructured data is usually not easily searchable or discoverable since it’s scattered across systems and applications. It might get generated by machines and/or humans, and reside in data lakes or other disparate sources. Having unstructured data in the organization drastically affects the overall efficiency of business processes, particularly when companies add new enterprise applications, which can invariably contribute to the confusion.
2. High degree of shopping cart abandonment
Cart abandonment is a clear sign that you are not delivering the product consumers are asking for or you’re not doing it fast enough. Do your employees across customer service touchpoints have problems providing the right service that customers crave? Your customer service is directly linked to your data strategy. Effective data management can help you analyze every step of your buyer journey, better segment customer views, optimize merchandising, and ultimately improve conversion rate. It introduces the required agility to your customer relationship approach — not only giving you an edge over competitors but also boosting revenue generation.
3. Fragmented data sources
Maybe your company has grown in share, revenue, geographic presence, etc., yet its data has become highly decentralized, stored in myriad applications and tools that span multiple systems and locations. Moreover, there are legacy systems that do not interact with each other. This is a highly complicated scenario. You need to link all these sources and form a consolidated, centralized platform. Only then can you best analyze the information collected and offer personalized products and services while getting valuable insights.
4. Lagging analytics and business intelligence
Another important motive of collecting, segregating, storing, and processing data is to analyze market trends, customer expectations, internal operations, and utilize the results in your favor. With MDM, you can ensure foundational data authenticity by establishing a single source and a trusted view of your data across the entire organization.
The Road to MDM: Getting There and Beyond
Assuming you understand your customers, products and suppliers well, you need to answer key questions such as: What do you want to achieve with your data? What’s the project’s mission, how does it link to actionable insights and your ultimate business goals? How do you plan to achieve it — incrementally or in a time-phased manner? Which platform do you want to use and why?
Once these questions are settled, building a master data repository begins. Here are some key points to keep in mind:
Organizations must know that creating a master repository of data isn’t the be-all and end-all to solving enterprise data management. In the absence of precise planning, synchronization, functional integration, and maintenance, your IT department might risk creating a new data silo.
Depending on algorithms built by IT staff for determining which data values to keep, or cast aside, based on the judgment of the IT department, or any other single group, has the enormous potential to go south. Again, these processes might neglect the business processes that convey specific contexts for the data. As a result, while merging records, key information might get lost.
When MDM activities are confined to specific groups within an enterprise, a mismatch between the enterprise’s long-term goals and those of the data team(s) can take place, rendering the whole exercise futile.
Data originating outside the enterprise is often managed by 3rd parties, which can be in various IT environments. In such cases, corporations can’t exercise their administrative control over that data fully, making automatic synchronization difficult or impossible, opening up potential for errors.
Any of these factors sneaking in can jeopardize data consistency, harmonization and governance — threatening the very purpose of a master data management strategy in the first place. It can hurt enterprises’ capabilities, inflate costs and put unnecessary strain on several departments.
However, when executed well, MDM solutions combine process, governance, technology, and architecture capabilities to deliver business-enabled technology solutions that transform a complex, redundant, inconsistent data landscape into one that is reliable, and cost-effective.
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