Master Data Management explained. All you need to know about master data management in five minutes!

It’s said that data is more valuable than oil. But as the case is with oil, the value is only there when you refine it and use it. However, while we all don’t have oil in our backyards, we all have access to an abundance of data. But as with oil, you’ll only realize the value once you refine it
 
In the old days you’d get the structure and overview of your data by consolidating it all into one large database – the big ‘source of truth’, but with the amount of data being generated every minute from so many different sources, this is no longer a viable option
 
You work with master data management to create trusted data for the firm to use. If you cannot trust your data, you cannot rely on the information you’re getting from the data. And if you cannot rely on the information your data is giving you, you cannot run the company effectively
 
Master data is not – as the word implies – the actual data, but a pointer to where the single source of truth for a specific dataset can be found. For example, your customer data may be stored in multiple locations; one database used for customer self-service online, another database holding information of past purchases and open orders, and one database used by sales to identify new sales opportunities. If the customer e-mail address is changed by the customer in the self-service portal, you need to ensure this change is reflected in all other databases as well
 
In old days, which is not so long ago in the digital age, you’d simply copy the change out to the databases but this is no longer a viable solution. With the speed of change and sheer volume of available data, your servers would spend all the time replicating data between each other instead of enabling the business to actively use them for insights and ‘next best actions’. You’d also face the problem of what data update is the right one. If your customer changes phone number in the self-service portal at the same time a sales representative is doing it in the CRM system, how will you know which is the right number to replicate in the databases?
 
Master data management solves this problem by holding information about the ‘golden record’ of in this case the customer. The golden record contains the essential information about the data the company relies on and is therefore the single source of truth for that dataset – this could for products, customers, locations, suppliers and so on. Remember, this golden record will not hold the actual data, but have all the information needed to retrieve the data from the right databases in the organization. The data required to complete a golden record, for example about a product, will in most cases be scattered across many databases which is perfectly okay because the golden record holds the information about where to find the correct version of the data
 
Working with master data management and golden records makes it possible to add a central data governance function that will ensure consistency, accuracy and even accountability for the correctness of the data across the organization’s different business units and teams. It is not just a way of storing data, it is also a way of securing the firm works with the data in the right manner so the data is always updated, compliant and in the best possible quality
 
A master data management strategy consists of the definitions of the golden records for the critical core entities like customers, partners, products and so on, and it is at the same time a technology that the firm needs to implement to work with the golden records
 
I don’t think I need to stress the importance of having access to the right data at the right time today. Master data management helps you with just that

--
Visit my personal website https://www.frederikbisbjerg.com
Here's a link to my book http://insurancenext.tech/
See my LinkedIn profile   / frederikbisbjerg  

SHORT BIOGRAPHY

Frederik Bisbjerg (born 1973 in Denmark) is a highly respected international business developer with expertise in digital transformation and business model innovation. His proven and numerous successes with worldwide business transformations comes from his belief in enabling and empowering people to execute on the change strategies

He is Executive Director, Digitization at Daman National Health Insurance company, one of the largest insurers in the GCC countries, where he oversees the company’s digital transformation initiatives, building a ‘digital-first’ flexible and resilient insurance company

Besides Daman, he holds the position as Head of MENA and Digital Transformation specialist with the Digital Insurer

He’s an author of Insurance _Next, a practical guide on how to transform an incumbent insurer to a flexible, agile and resilient insurance company, prepared for the New Normal following the COIVD-19 outbreak