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Master data management

Effective solutions for managing high volumes of master data

Keel offers turnkey solutions for managing enterprise master data in asset-intensive industries. Our comprehensive range of master data management services includes cleansing, governance, control, and more. With over 15 years of experience, we have the professional expertise to help our clients gain a competitive edge and step confidently into the era of Industry 4.0.

Below, you can learn more about what master data management is and the benefits of having your data managed and maintained through a robust master data management solution.

What is master data management – and why is it important?

“You can have data without information, but you cannot have information without data.”

Daniel Keys Moran

One of the most critical aspects of running a business today is ensuring the integrity of your data. The complexity of the 21st-century global economy is ever-growing, making it essential for organizations to create, manage, and deliver a single, trusted version of the truth. This enables the optimization of products, customer relationships, and digital experiences – all of which are key drivers of true digital transformation.

Many businesses – especially global enterprises – operate hundreds of different applications and systems, such as CRM and ERP. As data moves between departments or divisions, it can easily become duplicated, fragmented, or, most commonly, outdated. This is where master data management comes into play.

Master data management has become a necessity. It is a vital solution that ensures complete and consistent access to data relating to products, customers, suppliers, employees, locations, and assets. Most importantly, it empowers your entire organization to make informed, data-driven decisions – generating value, revenue, and operational agility.

So, what exactly is master data management, and why is it so important? In this section, you will learn everything you need to know about master data and master data management – and why it stands among your most valuable corporate resources.

What is master data?

As the name suggests, master data management deals with the management of master data. Master data describes objects around which business is conducted and corresponds to the subject of the data being mastered.

The categories into which master data is classified are called domains. Common master data domains include:

Customer data
Product data
Supplier data
Reference data
Location data
Asset data
Employee data

However, master data domains vary from industry to industry. For example, the data domains that banks focus on might include customers, accounts and financial products, while manufacturers might focus on customers, products, suppliers and materials. And within healthcare organizations, data domains include patients, equipment, and suppliers.

Some domains apply across most industries. Examples include employees, locations, and assets. Another universal domain is reference data – a special type of master data used to categorize other data or link it to information outside the organization. Reference data includes country and state codes, currencies, time zones, payment terms, and more..

The data domains that can be mastered can also be even more specific to your industry. For example, you can master elements from beneficiary, contract, and claims to projects, movies, and characters. It depends entirely on the business challenges with which you want to align your data.

Master data management defined

No matter which data domains a business or organization focuses on, some of these domains contain information that is absolutely essential. This is why master data management (MDM) is so important.

Master data management is the set of technologies, tools, and processes that ensure master data is coordinated across the organization. It delivers precise, up-to-date, consistent, and complete master data not only within the business but also to its partners.

Master data management creates a record of the vital information upon which the business or organization relies. A master record contains everything the organization needs to know about its most important data domains.

The master data record does not include transactions processed in the various data domains that the business or organization focuses on. Instead, it functions as a master file of attributes such as names, dates, addresses, customer IDs, item numbers, product specifications and other elements important to the business or organization. These attributes are used in transaction processing systems and analytics applications. This is why a well-maintained master record is often referred to as the “golden record” or the “single source of truth.”

There are two things you should also note regarding MDM:

Master data management is not an exclusively technological issue. It is as much an organizational and people-focused process as it is a technical one. In many cases, maintaining clean master data requires fundamental changes to business processes. Often, the biggest challenges are related to organizational politics and culture rather than the technology itself.
Master data management is not only a tool for the creation of master records: it also includes maintaining master data. MDM is an investment of time, money, and effort. Without ongoing practices to keep master data clean and consistent, that investment can be wasted. This is why MDM solutions include a wide range of tools and processes for data cleansing, transformation, and integration, ensuring that master data is continuously updated and expanded over time.

What the master data management process looks like:

When data sources are added to the system, the master data management solution initiates processes to identify, collect, transform, and repair the data.

Once the data meets the quality requirements, MDM creates schemas and taxonomies to ensure that a high-quality master reference is maintained.

This means that in using a master data management solution, businesses and organizations can rest assured in the knowledge that data throughout their respective entity is precise, up to date and consistent.

Why should you implement master data management solutions?

In businesses or organizations – especially large ones – having multiple sources of information is a widespread issue that can easily result in very high costs. Data changes over time, and this makes it easy for it to get out of sync. Once this happens, it begins to degrade, becoming fragmented, inaccurate, incomplete, and inconsistent.

As the data degrades, the people who use it will begin to lose trust in it. If they continue to use inaccurate data, it can lead to costly errors with serious consequences for the business.

For instance, imagine the effect that poor customer data can have not only on your work, but also on your relationship with your customers. Among other issues, poor customer data can result in:

Sending the same email offer multiple times to the same person
Distributing emails containing incorrect names, customer details, or other personal information
Offering irrelevant discounts based on incorrect location or purchase history

These errors won’t just irritate your customers: they are likely to eventually turn them away from what you have to offer. This will cost you sales, which will damage your profits. Ultimately, it will also mar the reputation of your business.

But mismanaged or poorly maintained master data does not only affect your customers directly: it can also affect them indirectly by having a negative impact on your business or organization internally. For instance, poor master data management in the energy sector can pose a great risk to your deliveries and logistics.

Instead of allowing backload and transfer processes to run smoothly, incorrect data at the procurement stage can lead to:

Increased manual tracking and transfers
Numerous verification phone calls to the responsible parties
Customs-related logistics issues

And much more – the more manual inputs, the more room for error.

Further, we know that deliveries of large items are always visible and well-monitored. However, issues arise when poorly managed master data causes the small parts to not be delivered on time. This can cause significant delays – especially if expensive helicopter deliveries are not an option.

These are only a few examples of the negative impacts poorly managed master data can have. Therefore, having the correct data from the very beginning of the procurement process is key to running a successful business or organization within this industry.

The benefits: what master data management services can do

There are numerous benefits to implementing a master data management (MDM) solution. Common business initiatives supported by MDM include:

Analytics
Customer experience
Governance and compliance
Mergers and acquisitions
Operational efficiency
Product experience
Supplier optimization

Returning to the risks posed by mismanaged or poorly maintained data, particularly in industries such as energy, the benefits of implementing an MDM solution include preventing these issues before they arise.

An effective MDM solution ensures that the data your business or organization depends on is accurate, up to date, and trustworthy. This eliminates the need for unnecessary man-hours spent on tracking, transfers, and verification.

Your deliveries will run smoothly without avoidable delays caused by inaccurate data. You also won’t need to allocate extra financial resources to facilitate urgent, last-minute deliveries to compensate for lost time.

Together, these benefits strengthen both internal logistics and customer relationships—not only in the energy sector but across industries. This is what makes master data management such an invaluable asset to any successful business or organization.

Conclusion

It has never been more important for businesses and organizations to lead digital transformation, deliver superior products, and meet customer expectations. Master data management is the comprehensive, flexible tool that makes it possible to realize these ambitions.

Master data management software and services allow you to replace costly manual data methods with a solution that continually evolves alongside the business. It scales to include multiple domains, and it can be leveraged to develop new models and processes for your business. It allows you to make decisions based on the best version of the truth – and this makes for better, more sustainable business decisions.

We hope this article has given you a better understanding of master data management and the many benefits of implementing a master data management solution.

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