Master Data Management is an enterprise function. It is a dedicated initiative to make master data within the organization accessible, secure, transparent and trustworthy. Master data pertains to information related to customers, products, vendors etc.
Master data management is a core function of every company and these initiatives are critical for applications associated with business intelligence, customer support, regulatory compliance, lead generation, marketing campaigns, employee retention, brand management and many other business initiatives.
Master data is often combined with transaction data within the organization as part of business intelligence initiatives to provide a view of critical information to the management of the organization so that they can take strategic and tactical decisions necessary for running the business.
The three main activities involved in effectively managing enterprise master data are:
Consolidating customer data
Customer data from various data sources, both internal and external, is consolidated together to get a complete view of each customer.
- This involves associating the demographic data of customers with their behavioral, attitudinal and transactional data, to better understand customers.
- This also involves consolidating information of customers’ association with various business lines within the organization.
- It also involves associating customers together based on the fact that they belong to same family, corporation, organization etc.
- It also involves analyzing duplicate information from multiple data sources about customers to create a golden record for each customer.
- It also involves building broad customer segments based on numerous factors and building numerius clusters of customer records.
Building product hierarchies
The second most important data element within the master data segment is products data. Products, by definition is anything that results in revenue for the organization. This includes assets that are not necessarily related to the company’s line of business. It also includes various services that the company offers to its customers, in association with the core products.
- The task of building product hierarchies involves consolidating product information across the business lines and standardizing it.
- It involves creating a master definition of each product and building numerous product clusters based on their marketing styles, selling patterns, usage patterns etc.
- It involves building various hierarchies of products based on the selling and usage patterns.
- It involves identifying product owners and costs, and identifying various internal components that form the final product.
- It also involves mapping of products to existing and potential customers for helping the lead generation and marketing campaigns.
Consolidating vendor information
All costs to the company, including those on employees, are attributed to vendors to effectively analyze and optimize the costs.
- This includes consolidation of all vendors within the organization, and their data.
- This also includes identifying vendors who are existing or potential customers.
- This includes identifying the products that are bought from vendors and mapping them to the end products of the companies.
- This includes identifying critical costs and opportunities to reduce vendor costs.
- This includes clustering of vendors based on location, products, services and value and possible consolidation or diversification of vendors within the company.
- This includes consolidating highly sensitive employee information together to understand the employees better, reduce the attrition, improve productivity and employee engagement within the organization.