Master data forms the core composition of any company. The management system creates a single point of reference for shared data, including suppliers, customers, products, organizations, and employees. This kind of critical data of a company can also be generated and consumed by internal users and systems, by business partners and stakeholders.
Inconsistency and fragmented data can affect selling abilities, delay time-to-market, create supply chain inefficiencies, and weaken market penetration. To maintain revenues, serve customers effectively, control costs, and comply with regulations, companies need to manage the data in a consistent, disciplined way that provides a single view for meeting targets throughout the enterprise.
Lack of master data management may have pronounced effects:
Lowered sale effectiveness: Limited viewership of consolidated customer data hinders customer transactions
Procurement decisions affected: Limited transparency of suppliers and their products cause companies to incur high costs
Missed market opportunities: Failure to capitalize on market opportunities when introducing new products, sometimes by hindering customer services
Ineffective business decisions: Inconsistent company information hampers business decisions
Challenges companies face
Root cause of data management not being in place depends on the approach a company takes for design and implementation of a project. Most of the time, data consolidation is considered unfeasible because subsystems don’t have a high level of consistency with each other’s data. It is extremely vital that application development tools are used to integrate data for a single system. The practice has proved to raise the industry benchmark.
From the financial side, challenges faced are:
- Discrepancy in financial master data across enterprise
- Human intervention required to update financial master data in financial systems
- Less transparency about changes in the financial system
From an IT point of view, the challenges are:
- High maintenance cost of master data
- Requirement for multiple systems to manage master data in various domains
- Low flexibility in changing business environments
From the sales & marketing point of view:
- Most of the times, customer transactions are compromised due to lack of visibility
- Limited view of consolidated data for customers to view across all lines of businesses.
The supply chain and planning part of companies faced other challenges, such as:
- Low levels of transparency related to suppliers and products.
- Insufficient data results in poor supplier selection, which then results in high cost
- Inadequate availability of updated master data in the business network
The shift from an IT-driven model to a more collaborative information governance system can help in saving the cost incurred by the IT department for oversight and maintenance. The journey from data consolidation to data governance helps domain-specific master data to centrally create, change, and distribute the same.
The master-data style of work is all about:
- Complete views of business entities
- Sharing of data across the enterprise
- Customer intelligence
- Data-driven decision making
- Reliable merger/acquisition calculations
- Compliance with regulatory standards
- Re-usability and extensibility of data
Process-driven applications help to achieve centralized management of various domains such as IT, Finance, SCM, and Sales and Marketing. That suggests the best way to manage master data is to develop an implementation plan that delivers the benefits of consistent shared data and also sets the stage for further improvisations, because master data management is not a tool to be installed and implemented; it is a process of transitioning to a full-utilization approach.
Author Bio:-
Amy Jackson is a lead technology writer and she has an array of experience in Technology and software industry. Currently, she has been writing about supply chain Optimization systems, Predictive Analytics Solutions and procurement solutions. Follow her on Google+ and learn more about the latest tech trends.