Master data is fundamental records in modern companies. Examples are Customers, Suppliers, Materials, Units of Measure, Employees, etc. MDM, Master Data Management, should not be summarized as just another method, but as a grouping of good management practices, aiming to increase efficiency in the execution of business activities.
Why Should We Adopt Master Data Management?
In the absence of correct governance of master data, a company has difficulties in carrying out new acquisitions, they lose money because they do not have updated customer records. The high volume of data and the complexity of a digital economy pushes companies to adopt new technologies and processes that allow them to improve their operations. The creation or alteration of a register is not a final activity, but it is a process that becomes essential to reach the business objectives.
A modern organization has numerous applicants for new registrations (sales, purchases, maintenance, etc.), in addition to a large number of agents participating in this process (tax, legal, marketing, etc.).
To organize all this flow, it is important that the registration center is governed by the master data governance discipline.
What is MDM?
With the digitization of the economy, it has become excessively expensive to maintain a central registry that operates without clear standards and non-compliance with data governance rules. A good set of master data allows us to carry out analyzes and determine our company’s strategy, so it is essential that the master data is unique, complete, and coherent.
According to Wikipedia, MDM comprises:
“A set of processes and tools that consistently define and manage an organization’s master (i.e. non-transactional) data (which may contain reference data). MDM aims to provide processes to collect, aggregate, combine, consolidate, ensure quality, persist and distribute this data throughout the organization to ensure consistency and control in future maintenance and use of this information.”
When we discuss master data, we can list the following pains:
– Due to systemic or training failures, new data are incorrectly entered into the registers, generating many operational problems.
– The records gradually become outdated, due to the absence of a periodic validation process.
– The volume of entries is very high, preventing manual adjustments.
– Governments require a series of actions to obtain and organize data, making the whole process even more complex.
For good governance of records, it is necessary to understand some fundamental aspects:
– IT is not responsible for data. The data is the responsibility of the business area.
– The business area must actively participate in the choice of MDM software, like the LucaNet.
– Your company’s ERP should not be your primary source of master data.
– Involve all users and departments in defining processes.
ESG (environmental, social and corporate governance) has arrived and the master data manager must rethink whether their processes are adequate for this new reality.
To improve governance, it is important to automate processes to ensure the fairness and suitability of business partners, as well as to implement the standardization of product registration. In addition, it is important that the master data is no longer considered as fixed data, that is, updated only at specific times, such as when a new customer is added. A modern company needs to ensure that its solutions keep records up to date, constantly, and with minimal manual intervention.
After all, the great difficulty of managing master data is that the attributes are scattered throughout the organization. Whether with structured data in different systems (ERP, CRM, etc.) or with unstructured data (in documents, emails, spreadsheets, etc.). We hope this post was helpful.
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