What is Master Data Management?
Master Data Management is a consolidated, single source of truth for business-critical data.
MDM requires departments to collaborate in order to assemble data held in multiple systems and platforms into one single source. Typically a technology-enabled process, MDM ensures that the master data is accurate, up to date and uniform across an enterprise.
For financial services, this could include customer and product information and Gartner provides further examples such as prospects, citizens, suppliers, sites, hierarchies and chart of accounts.
An example could be keeping an up to date address for a banking customer across departments, in order to maintain an accurate picture of the person for early fraud detection and sales and marketing purposes.
Maintaining a Master Data Management programme enables data to meet certain data quality dimensions, such as accuracy, consistency and timeliness, in order to reduce errors, non-compliance and dissatisfied customers.
How MDM overcomes three common data challenges businesses face by transparency:
Master Data Management is a critical driver for delivering a single, trustworthy view of critical business information. Trusted data sources help reduce costs of application integration, enhance customer experience and allow for actionable analytic insight. MDM delivers this by overcoming three key challenges:
• Siloed systems creating duplicates of data records
• Inaccurate data caused by manual data entry error
• Poor timeliness which means that data is inaccurate due to being untrustworthy
MDM defines and implements policies to establish the origin of data, the accuracy of that data and the accessibility of that data. To summarise, MDM enables organisations to eliminate duplicate customer records with mismatched data, which will provide a full comprehensive picture to the business user without having to manually piece together numerous entries.
Master Data Management must not be confused with enterprise data management (EDM). EDM consists of inventorying and governing your business’s data and seeking to get your organisation on board with the process. Not all organisations will need MDM and it is typically businesses with large or complex data sets – with an MDM solution in place, your critical data challenge needs will be able to be met.