Master Data Management background
Enterprise data infrastructures are composed of multiple IT systems that track various domains of the business. To cover all these areas, enterprises may deploy complex application systems that number into the hundreds. Common systems include CRM software to manage customer data, or ERP software to manage product resources. Naturally these data sets complement each other and bolster the business, but historically, these systems needed integrations to achieve truly valuable insights through the shared use of data. More often they remained as siloed systems and created rifts in data access and ownership.
Generally, when siloed data remains, two main issues arise as a business grows, operational inefficiencies increase, and so do data conflicts. Firstly, closed systems make it difficult for departments to share significant amounts of data with ease—disparate systems may not be allowed or capable of talking to each other, and data owners can become territorial over their department’s data. Secondly, multiple systems with overlapping data domains will cause duplicate data stores and introduce opportunities for data inconsistencies.
An approach to solving these problems is to ensure greater cooperation between departments by establishing processes and technology that supports a Master Data Management (MDM) strategy.
What is Master Data Management?
Businesses that follow a master data approach accept the necessity of using multiple data systems in today’s fast paced digital world, but recognize the overall limitation of these systems to work together and support the needs of the business.
Generally, three types of data systems are used in enterprises: transactional data, analytical data, and master data systems. In short, transactional data is operational data that describes time and numbers around business events, think sales, ordering, billing data found in critical information systems. Businesses can then analyze their transactional data to determine business performance, refining it as analytical data. Master data is core business data that describes key organizational entities typically used across many systems, think customers, products, inventory, suppliers, employees, and site locations. These are important non-transactional data points that provide context to events described in transactional data (a purchase is made more significant when a customer’s information is attached to it). The ability of an organization to manage these different data sets directly impacts its competitiveness.
Gartner defines Master Data Management (MDM) as:
“a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise’s official shared master data assets. Master data is the consistent and uniform set of identifiers and extended attributes that describes the core entities of the enterprise including customers, prospects, citizens, suppliers, sites, hierarchies, and chart of accounts.”
Reltio is a next-generation MDM solution. It offers best in class Master Data Management system capabilities, including Identity Resolution, Data Quality, Dynamic Survivorship for contextual profiles, Universal ID across all your operational applications, Hierarchies, Enterprise Data Management Capabilities and Connected Graph to manage relationships, Progressive Stitching to create richer profiles over time, and Data Governance capabilities.
MDM Domains
Master Data Management (MDM) platforms are designed to pull together multiple domains of data as if it were one. Called multi-domain master data management, these solutions overcome the challenge of using purpose-built single domain MDM solutions traditionally used in legacy systems to manage each master data domain individually. The following single domain solutions are critical for most businesses and implementable under multi-domain platforms.
- B2B or B2C Customer master data management
- Product master data management
- Supplier master data management
- Reference data master data management
- Location master data management
- Asset master data management
- Employee data master data management
This list is limited, however. Most industries will have to track much more industry specific master data, for example, hospitals may keep master data on patients, insurance providers, contracts, beneficiaries, etc. while airlines keep master data on their fleet of planes, and their facilities and equipment. These complex enterprises are well suited to take advantage of MDM’s benefits.
Benefits of MDM
Integrating master data management across all domains grants enterprises the overarching benefit to enforce control over master data throughout the organization and thereby improve the overall quality and connectedness of data. This results in dramatically fewer data errors, reduced redundancy and overall increased operational performance.
Implementing a master data strategy lends the following benefits.
- Improved Data Quality
- Reduced Data Duplication
- Increased Business Efficiencies and Agility
- Revealed or Improved Business Insights and Decision Capabilities
- Reduced Time and Costs for Data Stakeholders
- Enhanced Regulatory Compliance
In particular, cloud MDM solutions benefit large, global enterprises reliant on highly distributed data across multiple locations and systems.
What differentiates Legacy Master Data Management from Reltio’s Cloud Master Data Management Solution?
The differentiation between the legacy master data management systems and Reltio’s cloud-native MDM solution can be boiled down to three areas. First, legacy MDM systems are too slow for demands today. Second, they lack the ability to scale effectively. Third, they are too rigid to respond to changing business needs in near real-time.
Reltio’s next-generation MDM solution is a highly secure and compliant cloud-native data management platform. It is available on day one and is easy to configure, so you can go live and gain business value very quickly. All updates are pushed without any disruptions.
Reltio’s MDM solution enables an MDM program with an API first approach, which allows you to quickly onboard new data sources or connect to new consuming systems. You can also add or remove attributes on a fly without downtime.
It enriches thousands of attributes with:
- Relationships and hierarchies across people, products, and places with connected graph technology.
- Omnichannel Transactions and Interactions including functions, channels brands, and geographies
- Actionable Insights from Data Science and Analytics including preferences, behavior and intent
Consent & Communication Preferences with configurable workflows, reference data, task management, granular audit trails, and support for regulations such as GDPR and CCPA.
Examples of MDM
MDM in Healthcare
Data errors and inconsistencies in the healthcare industry lead to patient stress and hospital frustration. In one case, a healthcare provider was overwhelmed by a mounting caseload of denied claims due to mismatching provider data in their own systems. After exploring the problem, the provider adopted the implementation of a MDM platform that created a single-source-of-truth so patient data was aligned across domains. Afterwards, there was new confidence and trust in the accurate data they maintained for their 10 million plus patients with an average visitation of 6.5 visits.
MDM for Insurance
Insurance providers rely on accurate data to make millions of claims decisions every year, resulting in billions of dollars in payouts. Without master data management technology and MDM processes in place, client data, premiums data, claim data, and payout data would accumulate separately in siloed departments, leaving a very real opportunity for over and underpayments, or abuse and fraud.
Master Data Management platforms guarantee the accuracy, integrity, and validity of shared data elements and ensure there is a single-source-of-truth (SSOT) representing an agreement of the critical values across all data domains. In the case of an insurance provider, the same client-based critical values would be shared across all systems. By “connecting” master data, providers then can be sure a client is caught up on their premiums before any payouts and then payout appropriately.
Learn how Reltio can help.
