We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 – 28. Join AI and data leaders for insightful talks and exciting networking opportunities. Register today!
Latest reports show that the global master data management (MDM) market is expected to reach $27.9 billion by 2025. Looking at the humongous amount of data that is being generated — 1.145 trillion MB per day — the growth of the MDM market is inevitable. Fueled by data-heavy new technologies like artificial intelligence (AI), machine learning (ML), internet of things (IoT), robotic process automation (RPA), augmented reality (AR), virtual reality (VR) and social media platforms, this market will continue to grow at an unimaginable rate in the coming days.
Why is a successful MDM strategy critical for your business?
Enterprises need robust data management capabilities to make better business decisions, improve operational efficiency and drive superior customer experience (CX). This is where MDM comes into the picture — it creates a single, consistent and reliable source of master data that you can use to your advantage — accurate reporting, reduced costs, ramped-up productivity, faster go-to-market (GTM) and more sales and revenues.
What does a successful MDM strategy look like?
Simply put, a sound MDM strategy is the hallmark of success for businesses across industries. So let us have a look at the five pillars of a successful MDM strategy:
- Data governance: The foundation for all successful MDM strategies, data governance provides a framework for defining the rules about data quality, access controls, regulations and privacy policies. Governance also helps identify who within your organization is responsible for ensuring the availability, usability, security and integrity of data.
- Data stewardship: Building on governance, it is important to get the right stakeholders on board and ensure that the regulations are implemented and policies enforced across the organization. This is essential to ensure that business users have access to clean and accurate data at all times.
- Process: The success of data stewardship rests on creating well-defined processes for monitoring adherence and elevating the value of data. An effective MDM strategy must outline the process for data consolidation, management and propagation.
- Standards: Once processes are defined, guardrails or standards — both internal and external — must be established around them. While external standards are essential for ensuring regulatory compliance, internal standards help maintain clean, accurate and consistent data across the organization.
- Technology: The fifth pillar of a successful MDM strategy, technology has graduated from being a mere enabler to a game-changer for organizations trying to realize the total value of data in driving business goals. Besides strategy, other important considerations such as organizational culture, data maturity, stakeholder consensus and in-house skills influence the selection of the right MDM technology.
How MDM makes a difference
Measure improvement in data quality or data silos issues
Studies reveal that poor data quality has resulted in at least 19% of businesses losing customers. Inaccurate and substandard data not only results in business losses, it also increases risks and lowers ROI, says Gartner. The challenge associated with low-quality data can be effectively tackled by implementing a robust MDM solution that checks data for completeness, accuracy, duplication, integrity, consistency and conformity and improves data portability in the process.
An effective MDM strategy is built around solving one of the inherent problems businesses face — eliminating enterprise data silos. Data locked in disparate databases leads to operational inefficiencies and 20-30% annual revenue loss. Implementing an efficient MDM system can plug this revenue leakage by removing data silos, facilitating data consolidation, reducing data retrieval time and making data available for collaboration between internal business functions and external partners.
Evaluate how your team is better utilizing the data
By breaking down data silos, MDM helps reduce data errors, duplication and inconsistencies and boosts productivity by providing a single source of truth that enables your team to utilize data better. While IT owners can optimize applications and systems with a consolidated view of enterprise infrastructure, the marketing and sales teams benefit from a 360-degree view of customer data to run more targeted campaigns for cross-selling and up-selling.
Using a centralized system and an enterprise-wide common set of methods for retrieving and analyzing data leads to performance improvements. Studies show that 80% of executives could enhance their performance and exceed business goals by leveraging a single, unified source of master data. Using an MDM not only improves data quality (65%) and portability (62%), it also helps in better data utilization, leading to accelerated delivery of information (62%).
Analyze before and after operational efficiency improvement
Despite growing demands for near real-time data-driven business insights, several organizations still use manual processes and rely heavily on emails, spreadsheets and calls to collect and share various types of data across business functions. This lengthens reconciliation cycles and results in skewed and unreliable data reporting. Without access to a centrally governed and dependable standard reference, it is difficult to maintain consistent data across the organization.
That is why 68% of business leaders are investing in data management solutions, according to Dun & Bradstreet. MDM amplifies performance agility by enhancing collaboration between people, applications and systems and integrating disconnected processes to manage workflows better. It ensures that business applications within an organization are completely aligned with each other to enable clean and usable data flow across multiple applications, resulting in a 28% reduction year-over-year (YoY) in operating costs.
Keep a tab on improvement in customer experience
Dealing with ‘rogue’ customer data — siloed, duplicate and out-of-sync customer information — is one of the top challenges global brands face today. Studies tell us that an organization will likely have 20% to 40% of duplicate customer records, resulting in million-dollar losses annually. In addition, such incorrect, fuzzy customer data inevitably results in a loss of sales and marketing efforts, poor customer service and a host of dissatisfied customers — a CX nightmare.
As 73% of customers make their purchasing decisions based on experience, data management emerges as a key differentiator. MDM allows sales teams to access clean, de-duplicated, holistic customer data that help rationalize account planning, improve sales and boost customer profitability. MDM allows marketing to drive hyper-personalized and targeted CX initiatives for improving customer satisfaction (CSAT) scores. With trusted customer records, brands can also explore cross-sell and upsell opportunities to improve customer lifetime value (CLV).
Measure impact on ROI and business growth
There is very little room for error in a world where businesses thrive on data-driven insights. But, unfortunately, incorrect data harms the return on investment (ROI) — bad data costs an alarming 15% to 25% of revenue for most organizations. Although quantifying the exact ROI is sometimes difficult, studies prove that best-in-class organizations leverage relevant and accurate data-driven insights to produce real business impact, achieving 28% revenue growth (YoY).
Analyzing business metrics correlated with financial outcomes before and after an MDM implementation helps you determine the value of managing data in realizing ROI. To realize this value — and the competitive advantage it brings — organizations need to master their existing data management challenges by investing in a sound MDM strategy that incorporates data quality standards, data governance and validation rules to reduce business performance risks and enable revenue growth.
The long-term MDM strategy
Reliable master data is the lifeblood of all successful businesses today. To up their ante, most organizations are actively exploring opportunities of incorporating more data to support key decisions. They demand increased data accessibility and lesser barriers to data sharing. Here, a long-term MDM strategy, in sync with business growth objectives, differentiates leaders from laggards.
Vandana Singal is the director of solution consulting at Pimcore Global Services
Welcome to the VentureBeat community!
DataDecisionMakers is where experts, including the technical people doing data work, can share data-related insights and innovation.
If you want to read about cutting-edge ideas and up-to-date information, best practices, and the future of data and data tech, join us at DataDecisionMakers.
You might even consider contributing an article of your own!
Read More From DataDecisionMakers
Source: Read Full Article