If you’re considering investing in a master data management (MDM) solution, what are the basic features it should contain, and why? And more crucially, how will each of these elements come together to benefit you and your organization?
In this blog post, learn about six master data management tool capabilities that you should look for before investing in such a solution.
1) Master data matching and linking
As well as pulling together all your diverse sources of data, your Master Data Management solution should contain a matching and linking feature.
For most organizations, their data has been captured using different systems and applications. For some, acquisitions have increased the number of silos in which data resides. Therefore, duplications and variations of information are inevitable.
The matching and linking feature uses algorithms that automatically identify duplications and help resolve multiple entries into a single, accurate record.
Without this functionality you, for example, run the risk of contacting the same customer twice or listing the same product multiple times. This not only alienates your customers, it also skews any analytical results—as you can’t hope to obtain accurate insights if the data being examined is full of inaccuracies.
Transforming data from a multitude of systems into one single, accurate record is a critical part of any master data management solution. In addition, the master data matching and linking feature will ensure you:
Eliminate duplicated data
Feed accurate information into all your systems
Are able to monitor the integrity of your source systems
Have the foundation from which to enrich your records with third-party data
Can automate a number of otherwise resource-demanding tasks
2) Applying master data business rules
As part of your master data management solution, you should be able to introduce conditions or actions that modify data accordingly—enter business rules.
Business rules should be shareable across different use cases, such as when importing data or doing approval processes.
They should be centralized, allowing the rules to be changed once for the effect to be applied everywhere. Business rules should be implemented directly in the user interface without having to wait for backend development.
The benefit of business rules is that they allow you to create, apply and manage a companywide data governance policy. Your chosen policy will enable you to define the data lifecycle for each relevant object type, define the workflow for decision and approval processes on key data situations and define business rules that enforce integrity on data.
Business rules should play a vital role in your data strategy, helping you introduce data quality and governance strategies quickly and accurately, thus reducing risk.
3) The ability to manage location data
Under law, certain customer data must remain within the borders of a particular region or country. Data localization is when data is stored on any device that’s physically present within the borders of the country where the data was generated.
The free flow of digital data is restricted by some governments, and data localization is encouraged in an attempt to promote security across borders. The General Data Protection Regulation (GDPR) states personal data can only be transferred to countries outside the EU when an adequate level of protection is guaranteed. As the cost of non-compliance is so high, many organizations want to ensure their customer data remains within the EU, or even within the country of its origin.
Managing location data can be a challenge as you need to be certain of its geographical origin and have parameters in place to restrict its usage in other countries, if necessary. However, a master data management solution should enable you to standardize your location data with integration and data quality tools. You should be able to connect centralized location data with other domains to discover relationships and link relevant documents and assets to master records.
Your location data could overlap with other data sources within areas of your business and, by analyzing it, you may be able to refine your operational information.
4) Supporting the security of data
As the amount of data your organization handles increases, it becomes even more vital to establish efficient data privacy policies and processes.
Role-based security policies within a master data management solution should help you define access rights to any data. These rights can be applied to restrict actions. This helps to protect sensitive and private data, particularly relevant for those in the financial services sector, but of growing concern to any business given the stringent requirements of the GDPR.
An MDM solution should offer the ability to encrypt data attributes with business-defined cryptographic keys, so users will be prompted for a password before they can view attribute values. This feature ensures your company has no vulnerabilities that could be exploited by external parties trying to gain access to the data you hold.
5) Refining your records with data enrichment
Data enrichment refers to the tools and processes that improve the quality of data coming from any number of different inbound sources. It’s a crucial element to achieving a true 360-degree view of your data.
Cleansing and streamlining data can lead to significant operational and customer-related benefits as you can identify incomplete, incorrect or irrelevant data and modify or delete where necessary to give you a more accurate view of your customers. However, by integrating with third-party sources, you can enhance and refine your data even further.
Data enrichment should start by validating the data you already have and then cleansing it. Once you’ve done this, you can combine it with external data sources to further broaden your insight.
As a result, you’ll have richer customer and product records, giving you better insights that will allow you to make proactive business decisions that have a greater degree of success. You’ll also gain higher confidence in your business data enabling better risk management.
This enriched data can be used to analyze trends, show emerging patterns and reduce your exposure to risk. With a deeper understanding of your customers, including their behavior and lifestyle, you can specifically tailor products to their needs.
6) Laying the foundation for consent management
Due to data legislation such as the GDPR, you need to have a clear framework for how you handle personal information, such as customer data. You need to provide clear reasons as to why you’re holding someone’s data, whether they’ve agreed to your obtaining and keeping it, and proof that they’ve consented to this.
With MDM, you should be able to consolidate you customer data into a single place, which makes collaboration between business and technical staff much easier, as they can work together on one set of data to meet governance rules.
This centralized repository allows you to monitor and better protect sensitive data across all source types thus reducing the risk of personal data exposure. And, with a single view of data subjects, you can manage their consent.
With a 360-degree view of each individual it becomes easier to facilitate consent marketing and adhere to consumer rights such as "right to access" and "right to object."
And, as the amount of data you handle grows, it becomes more critical to establish efficient data privacy policies. However, data governance shouldn’t be considered a burden. Done properly, it can be used to provide insights into the usability, integrity, security and privacy of your data.
It should be noted: data privacy must be entrenched in existing legacy systems and networks as well as new ones—a master data management solution can help you ensure all data repositories are covered.
Choosing a Master Data Management solution that fits your business needs
While we’ve outlined—in our experience—six valuable features of an MDM platform, your solution should, of course, be designed with your business objectives at its core.
You need to identify your biggest business pains related to data. The features most relevant to those will then follow, naturally. This will help you make a compelling business case for Master Data Management.
Reviewing your business objectives and mapping out how managing your data can help you achieve them gives you the foundation for identifying the master data management solution that’s perfect for you.
Need tools and framework to determine the ROI of MDM? You may find this on-demand webinar helpful.