The complexity and diversity of systems in the modern enterprise often means that a good deal of information about customers, accounts, products, or equipment is trapped in information silos.
A2A integration is often used to share information between a myriad of systems such as Client Relationship Management (CRM), Enterprise Resource Planning (ERP), Product Lifecycle Management (PLM) and Data Warehouse (DW).
However, most organizations estimate that 10% to 20% of their systems contain duplicate or inconsistent data. Further to this a recent report by the Data Warehousing Institute found that 83% of organizations suffer from bad data because of inaccurate reporting, internal disagreements over which data to use and incorrect definitions that render the data unusable.
How can organizations effectively manage data that is duplicated or inconsistent across their systems? And what happens when there are complex relationships between customers, accounts and their products?
Creating a single view of your customer and products with all of the information across all systems can enable organisations to provide better service to clients and can lead to new business opportunities.
See the image below. Business users add, update and delete customer records in their day to day operations. These customer records are then updated in CRM, ERP, Data warehouse, PLM and other systems.
The MDM solution enables these updates/new records/deletes to be updated neatly across all systems without errors.
An example of how Master Data Management (MDM) can be used
A bank is running a campaign to sell home insurance and other products to its customers. The bank typically sends 10,000,000 mailings annually and determined that 15% of mailings were sent with at least one of the following errors:
The company decides that by using MDM data quality would increase to 99.99% from around 85%. Assuming it costs the bank 0.50p to send each letter, the bank would save ?749,500 annually by implementing MDM.
What is Master Data Management?
Master Data Management (MDM) comprises of a set of processes and tools that consistently defines and manages non-transactional data entities such as customers, securities, accounts, products, equipment or reference data.
MDM can be used to continually improve data quality, store the ‘golden’ master record, a history of updates, and the relationship between master data items.
MDM can be applied to many business situations, however the following are the most common:
- Purchasing Data Consolidation. Increase your global purchasing power and provide visibility on spending
- Product Data Management. Reduce production outages and provide significant cost savings
- Data Quality. Continually improve data quality
- Single Customer View. Reduce sales costs and increase probability of a sale
Purchasing Data Consolidation
Many global organizations’ supply chain decisions are made from an individual business unit perspective. For larger organizations this provides limited opportunity to leverage size. Increase global purchasing leverage as a unified company, provide spend visibility across the group, optimize inventory by reducing duplication, identify ‘best fit’, suppliers, spend analysis in real-time.
Product Data Management
According to Capgemini “Engineers can spend 50% to 80% of their time searching for or gathering data rather than creating value for the company”. Product Data Management tracks and controls the data relating to a particular product, such as technical details and manufacturing specifications, details of material types, tolerances and approved replacement parts. Without it, production can grind to a halt if the right component can’t be located. Furthermore product data management can also track the costs associated with the development and launch of a new product, enabling better products to be released to market quicker and more reliably.
Most organizations estimate that 10% to 20% of their systems contain duplicate or inconsistent data. In most cases the manual cleansing of this data would be too expensive and ineffective to consider. MDM can be used to clean your data to more than 99.99% accuracy without the need for manual intervention. In addition once MDM is in place the quality of data is continually improved to bring further value to your organization.
Single View of Customer
Imagine if in one CRM system, the same customer was included 4 times. That is 4 times the cost to mail him and a very frustrated recipient. Creating a single view of your customer can reduce issues and make your marketing activity more focused and less expensive.
If your business wants to increase purchasing power, boost sales, reduce production outages or simply improve data quality, why not book a free consultation with one of our MDM experts?