In digital businesses such as SaaS enterprises and e-commerce stores, data has a tendency of piling up over time. Without proper management, it will be difficult for the business to put it to good use. Again, when this data reaches certain levels of redundancy, the business begins to suffer from efficiency and operational challenges. The need for data accessibility, consistency, coherence, accuracy, uniqueness, and searchable storage highlights the need for master data management.
Why Master Data Management is One of the Most Important KPIs for a Digital Business
What Is MDM?
Master data management refers to the techniques used to streamline data across systems and departments within an enterprise. This streamlining of data, in turn, simplifies business operations thus making them much faster as well as cost-effective. With that, issues such as privacy regulations and government compliance become much easier to adhere to. This ensures that the business does not have to deal with costly fines and is instrumental in building the organization’s reputation.
MDM also assists in providing a consistent understanding of various master data entities and the relationships between them. As such, businesses are able to obtain better insight into consumer behavior and attitudes which are among the prerequisites for informed decision making. This depth of knowledge facilitates a deeper understanding of the business’s environment thus enabling enhanced customer service, satisfaction, and loyalty.
The implication here is that digital businesses need to ensure that their data is complete, accurate, contextual, and consistent at all times to allow for smoother processes and consequently, profitability.
MDM, therefore, is among the key performance indicators for any digital business due to the following reasons:
• Single Information Source Across the Business
An efficient MDM system eliminates any data integrity issues there might be in the company. You know that you need an MDM if you are constantly facing the following data problems:
- You have reports from different sources that do not match.
- You waste a lot of time running business processes and multiple apps using the same data domain but different data repositories.
- You need to combine different data to generate meaningful reports.
- One of your ivory towers is able to make their data better than others.
If this is the case, you need to consider using an MDM environment to see how much better your data can be.
• Accurate and Reliable Analytics
Accurate analytics can only be derived from data that is of high quality. MDM helps you identify potential data quality issues. Moreover, it allows you to focus on real problems by giving you an objective overview of your issues so that your subjective feelings are not involved in the process. And as you know, quality is not supposed to be a measurement, but rather, the design.
As such, in order to successfully implement an MDM system, you will first need to know which of your processes need an MDM touch so that you can have reliable analytics. Nevertheless, MDM works by reducing data errors, integrating data sets, and enforcing data management processes to allow it to generate more accurate and reliable analytics.
These enable you to have a better understanding of your customers’ needs in addition to knowing what you need to do to improve your marketing campaign success rate. In addition, an MDM system also allows you to improve the effectiveness of sales and distribution by giving you correct data that facilitates effective communication and collaboration.
• Data Governance
From a performance and management point of view, MDM reduces the enormous amount of effort that is put into manually identifying bad data. This enables management to have the correct data thus making risk management much easier. Again, digital businesses should not be data focused, but rather, process driven through MDM. This aligns the key aspects of any business i.e. people, processes, and technologies into a single unit that delivers value using effective data governance.
• Cost Optimization
Through consolidating and removing duplicate data sources across the organization, an MDM system is able to effectively reduce hardware and maintenance costs. And because data is an invaluable asset in your business, you need the best management solution handling it. Such a solution is designed to optimize business management so that the enterprise can achieve cost efficiency.
When evaluating their performance, digital businesses usually consider their operational efficiency to be the most important performance indicator. However, that is just scratching the surface because at the heart of operational efficiency lies effective data management. This is because digital businesses depend on data for every aspect of their operations. By utilizing the correct data management solution, therefore, they will be able to discover more opportunities for business growth while increasing customer satisfaction.
If you are looking for a Master Data Management solution, Profisee is a next-generation MDM software company that makes it easy and affordable for you to have a reliable data foundation across your business. The Profisee MDM system allows you access to all your users, records, domains, and data sources using any device.