Why is Master Data Management Important?

Master Data Management MDM continues to gain prominence because it concentrates on specific business-led initiatives.

According to Gartner, MDM is critical to realizing information governance. If you don’t have the right MDM strategy, you will waste crucial resources to deploy business solutions that depend on data. Failure to manage your data accurately can also expose your organization to information leaks.

What Exactly is Master Data Management?

What Exactly is Master Data Management?

Master Data Management MDM is a comprehensive method of enabling an enterprise to link all of its critical data to one file, called a master file, that provides a common point of reference. – Wikipedia

An MDM program is more of a commitment by a company to cash in on data for reuse to transform business processes outcome than it is a project. Bearing this in mind, you must address key stumbling blocks, which include organizational change, change management, measurement of business value and governance framework if you want to realize the full potential of MDM. The following are several reasons why you need master data management.

Why Master Data Management is Important

1. To integrate information across multiple platforms

Having accurate and consistent data is critical to providing your customers with a customized shopping experience and differentiating your business in the market. MDM generates a master file of accurate, high-quality product information for proper delivery through all sales avenues.

In most organizations without Master Data Management, business information usually lies in different silos, where each department or business unit manages its data. Sometimes, the data is available in multiple formats. As such, redundancy is almost unavoidable. MDM scores here by bringing together all data from different platforms such as online, physical, cloud and other places. This way, information users will no longer have to go through information from multiple channels to generate reports since all the data will be presented in a single unified view with specifics and complete coherence.

2. Creates a better understanding of customer and business

Through Master Data Management, you can synchronize all customer data across multiple channels and information chain to maintain a single view. The program helps you have an integrated view of materials, customers, products, suppliers and other data sets. When you have all the business information available in a single view, you can approach decision making in a timely manner.

3. Increases the credibility of data

Businesses rely on data to maximize their operational efficiency. Every time you generate a report, you are more likely to rely on data within your system. If you are working with incomplete data, your reports will not reflect the reality of the business, and you may only get half the benefits. Even worse is that poor quality data will negatively affect your decision making. Without trusted and consistent master data, your organization might suffer in the following ways:

  • Damaged reputation with key stakeholders, which include suppliers, customers, and partners.
  • Loss of competitive advantage.
  • Wastage of resource in managing data.
  • Lower revenue and profits.

Successful implementation of MDM simplifies data governance. Relevant stakeholders will be more accountable for the accuracy of the data. MDM prunes confusions and creates a consistent and simplified workflow. It allows users to choose the data that is useful for management.

4. Flexibility and data edits

One challenge of keeping multiple data channels is that changes made to data in one location will not be reflected across all channels. This approach is more likely to lead to data discrepancies. MDM lets you perform master edits in a way that it updates the affected records in all the locations thus guaranteeing data consistency. Besides this, data flexibility is higher with MDM when compared with other data management strategies.


A master data management initiative will help you derive maximum value from your business data thus improving business process, which lead to business growth and better customer experience.


Author Bio: Douglas Pitassi is a small business blogger and freelance writer. You can connect with him on his personal website.

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