What is Master Data Management?
In the simplest sense, Master data is a record of information of different departments/individual processes of an organization made available at one single source of truth. Teams can access data that’s relevant to them from the master set without having to go through details not useful to them.
Master data management is the skill of managing master data for consistency and correctness that helps to make better business decisions.
What are the Advantages of Master Data Management?
The saying “garbage in, garbage out” holds in MDM. If data is inconsistent and erroneous, the resulting actions will be the same. It’s important to not put garbage in (badly managed data), in the first place. Statistics say, 77% of global consumers would stop doing business with a brand that lost their data or used it irresponsibly.
Managing a large amount of data is a humongous task. It’s a nightmare if the data is spread out in multiple places. Master data management helps you to draw quality results for daily functions and important business decisions from well-managed data across multiple data sets like Material, vendor, logistics, finance, HR, Customers, and so on.
Master data management is important for your business to
Generate high-quality data reports
Make better-informed decisions
Improve customer satisfaction
Improve employee productivity
Gain competitive advantage
Types of Master Data
Master data is information that is subjective to different businesses. For eCommerce, the most common types of master data are,
This contains details like customer name, address, contact information, customer ID, and so on. It helps to identify the customer based on a unique ID assigned by the company/ MDM system.
The Vendor Master data consists of information about the vendors who supply to a business. It has basic details like name, address, contact information, specifics like taxation, the currency of payment, payment terms, etc.
This contains product information like product number, description, unit of measure, weight, volume, EAN number, etc.
This master set has values that are fixed. For example, information about desktops, PCs, laptops owned by a company.
This has details like Employee ID, name, joining details, D.O.B, address, identity proof details, emergency contact details.
Disadvantages of Master Data Management
Master data Management comes with some problems of its own. Specific data for each type of transaction is to be made available, but usually, companies have siloed up such reports that do not guarantee the correctness of existing information. This requires huge investments for integration and consolidation of data for all departments.
Moreover, Master data management is not a one size fits all solution. It depends on the kind of data you want to consolidate. If you are a small business with fast-moving transactions like say, a small home construction company, you don’t need an MDM set up to manage your customer data. If you implement an MDM in such a scenario, it will only lead to unwanted expenses and infrastructure.
What Other Options Do You Have?
Master Data Management tools give large enterprise data a singular structure. But if you are looking to manage product information then MDM can be overkill. A PIM, Product Information Management solution is a simple solution to manage marketing data from a single platform.
Here’s how a PIM differs from an MDM solution,
PIM has an inbuilt categorization structure that helps you to create main and subcategories for your products.
With a PIM solution, you can manage hundreds and thousands of products and their related data. Whereas MDM is a more consolidated solution with all kinds of data related to different divisions of an organization.
Manage Marketing Information
A PIM solution is ideal for a company looking to streamline their marketing information like product descriptions, digital assets, etc. But an MDM is a more generic and technical process involving multiple data types.
Digital Asset Management
A PIM solution helps you enrich product information with images, videos, files, docs, and so on to increase the overall appeal of your products. No such functionality is seen within a Master data management solution.
A product Information management solution offers functionality that helps syndicate information to multiple sales channels, print media, supplier portals at once. An MDM makes all data available across multiple divisions in an organization or between organizations.
A Master Data Management Solution is suitable for enterprises looking to break down silos of data and maintain a single source of information across multiple divisions like Finance, SCM (supply chain management), materials, assets, and so on. This is a single source of truth for a large number of data sets that have interlinked functions.
An MDM solution is particularly good for large organizations, organizations that undergo mergers and acquisitions, organizations with global operations.
A PIM solution, like flexiPIM, is suitable for businesses who are looking to manage particularly product data. A PIM functions in the marketing and sales areas of products. It helps you set up role-based management for multiple users using a single interface. This acts as a single source of truth for your marketing information.
A PIM solution is ideal for small-medium, large businesses, and enterprises that want to establish a consistent customer experience across all their channels. For example, a distributor who has a physical store and an eCommerce website can use PIM to automate product information workflows and establish an omnichannel experience for his customers.
I hope this helps you get started on making an informed decision on investing in a system that suits your business needs.