With the explosion of data caused by social networks, mobile systems, digitization of paper documentation and great interest in service-oriented architecture (SOA) and software as a service (SaaS), the companies have trouble getting consistent reports and ensuring compliance with regulations and law. All this has aroused great interest in knowing what is MDM (Master Data Management) and why it is essential for an organization.
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Which is MDM
A MDM is a comprehensive method that enables a company to unify all its critical data in a single repository. That repository is called Master file and once implemented and put into operation, becomes the common benchmark, capable of erasing redundancies and inconsistencies in the different versions of the organization's data. When done correctly, an MDM:
- Simplify data sharing among the staff and the different departments, increasing the quality and consistency of information.
- Makes it easy to work with multiple systems, application platforms and architectures. Given the, most software systems have lists of data that are shared and used by various applications that compose them.
Even though there is a lot of confusion around master data and its definition, in business environments it is frequent that queries are launched asking “What is MDM? “, Master data is generally one of the key assets of an organization, so much so that they can even motivate large operations, such as mergers and acquisitions, which aims to have access to the customer's master data.
At the same time from the customer master data, there are several more; being the most typical: product, employee, location or asset. Despite this, how to identify the data items that should be managed by a master data management system is much more complex than these definitions and needs a more in-depth analysis.
The Relevance of Master Data Management
Today's companies strive to Be more agile through the implementation of information systems that support and facilitate changes in business requirements.. Due, managing product information, customers, etc. became more and more important. But there are two problems:
- There are still many companies that do not base their decisions on all their information, but in a very small percentage of your information assets. According to a recent report by Forrester:
- Most companies estimate that they are analyzing only the 12% of your data., so they could be losing the perspective that the other data would bring them, that 88% remaining.
- Institutions believe are losing more than 27% of your income due to inaccurate master data.
- Institutions work with many different information storage systems, resulting in overlapping data, redundant and inconsistent. As an example:
- Definitions of common terms that may differ between systems.
- Different rules for data validation and cleaning, etc. could be presented in the different systems.
Get consistent master data, complete and relevant it's not that easy. Not even today, when you are aware of its relevance. Because the existence of master data has been known for a long time, but until recently the institutions were not so aware that:
- They need MDM systems to manage their information.
- Master data is special data.
- Its relevance to the business is unquestionable.
The most critical information of a company must be well managed to Make sure the MDM system provides clean and consistent master data across the organization. The master data quality It is one of the main objectives of the MDM enablement of a company. It's about ensuring that the master data has all the necessary attributes:
- Accuracy
- Integrity
- Reliability
- Coherence
- Relevance
- Update
Answer the question “What is mdm?” it's about logic, simplification of information architecture and complexity. In an organization, the master data system must be flexible and well managed so that, acting as a system of record or a referral system, MDM can provide authorized data to all business users in their interaction with any application.
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