MDM as a Basis for Digital Business

As much as business goals may differ, one thing always remains the same: Data is the basis for companies to achieve them. If the goal is to increase sales, a closer look at the data helps to understand which products represent the most lucrative business in which context. If new target markets are to be developed, consumer behavior must first be analysed in detail. If companies want to save costs, data provides the necessary insights into the efficiency of internal processes and supply chains. In short, data helps companies obtain insights that serve as the basis for strategic decisions and which thus enable companies to act in the first place.

But How Do You Get Access to the Data Anyway?

That's all well and good, you might be thinking – but which data helps to optimize business processes and how can they be operationalized? First of all, the type of data depends very much on the individual company's business. For some companies, product data is the only relevant source of information, but for many others, customer data and other information, such as locations and suppliers, also play a major role. It is therefore important to first understand what the focus is.

The second step is to check where this data is generated everywhere, where and by whom it is used and possibly processed, and where it then flows. In most companies, the various types of data are stored in separate systems, and the processes related to procurement, enrichment and distribution are also often fundamentally different. There is therefore a lack of a comprehensive authority that has access to all this data and at the same time is able to consolidate and use it to gain valuable insights, optimize processes and ensure data quality at all relevant points. This overarching instance is called Master Data Management (MDM) and it ensures the meaningful networking of all important domains such as customer data, supplier data, location data, product data or even data from external parties such as competitors or business partners. To this end, the data is networked together, made available to all parties involved centrally and without redundancy, and transformed into insights using business rules.

A Single Source of Truth

The goal of MDM is therefore to create a single source of truth that gives all beneficiaries access to the same golden record and thus ensures transparency and trust in a company's data. By networking the different domains, it is also possible to achieve a contextualization of the data, which in turn leads to insights that would not have existed in this way. This gives companies a powerful tool to effectively align their product and communication strategy with corporate goals, optimize internal processes, increase customer satisfaction and create new innovations.

Business partners and suppliers also have access to reliable data, which significantly strengthens business relationships. Last but not least, potential and existing customers also benefit from a single source of truth, as reliable, up-to-date and consistent data provides the necessary transparency for well-founded purchasing decisions.

MDM Lays the Foundation for the Future

This solves MDM not only a whole series of current challenges, but also forms the basis for future ones. Because only those who are able to address the issue of master data holistically, securely and strategically can react flexibly enough when it comes to digitization to react quickly to market developments. For example, the number of sales channels is constantly growing – from online shops to online marketplaces to social commerce, the publication of product content is already highly diversified today. Each of these channels has specific requirements for product information and digital content, such as images or videos. MDM supports the implementation of these rules and thus enables companies to develop and use new channels quickly, effectively and in a quality-conscious manner.

This ability is particularly important in competitive markets with global competition – a quick go-to-market before competitors have claimed the largest market shares provides an important advantage. Being transparent, personalized and consistent at the same time in cross-channel product communication ensures sales success in the long term.

But it is not only when it comes to distributing data that MDM gives companies the flexibility they need to be able to act. MDM also helps to efficiently expand the digital ecosystem, connect new data sources quickly and securely, and consolidate the data with the existing single source of truth. This is important for connecting new suppliers as well as for expanding the company by taking over new business areas.