Master Data Management Strategy: How to Create One

Introduction

Experiencing data corruption or loss during a migration process can be frustrating and disappointing, but also very dangerous. It can have grave consequences and affect both your reputation and financial standing badly and irreversibly.

If you’re experiencing problems with business-critical data during or after migration, the master data management strategy can be just what you need. The ultimate goal of implementing the MDM strategy is building and using a single source of master data – and thus achieving crucial business objectives, with operational improvement topping the list. 

Data – one of the most valuable assets that drives business growth – is something many organizations don’t put enough emphasis on. But data management should be a vital part of any business strategy, streamlining processes and making business goals easier to achieve.

Data-driven decision-making – the area MDM strategies enhance – is way better than working in the dark. But to make it happen, data needs to be consistent and reliable. To achieve this goal, they have to be transformed – cleansed and repaired beforehand.

Master data management strategy – key aspects

Maximally effective data management – the essence of both data governance and master data management – is something more and more organizations focus on to benefit from the data they already gather and collect – but in a very chaotic way. MDM – a centralized platform for managing various types of master data coming from multiple domains – is chosen by companies that want to improve their data strategy. This approach is comprehensive and covers all the company departments, with data integrated across many functional areas.There are several aspects of the master data management strategy that need to be taken into account, such as data governance, data quality, data stewardship, data integration, and data security. Master data governance is a crucial and all-encompassing aspect, which can be boiled down to:

<span class="colorbox1" fs-test-element="box1"><p>“the process of ensuring the integrity, security, usability, and availability of data in your business systems. It establishes definitions, sources, methods, policies, rules, measurements, and people to improve data management. Thus, it creates an important master record of vital business aspects in the form of a ‘single version of the truth’ or the golden record."</p></span>

Why do you need MDM strategies? Major benefits

Implementing the MDM strategy can enhance your business in a variety of ways. Some of them include:

• improving data quality and eliminating data discrepancies,
• reducing data maintenance costs,
• streamlining business processes,
• promoting collaboration and transparent communication across the company,
• building customer trust and competitive advantage,
• improving key business performance metrics and reducing business risk,
• limiting necessary resources (with process automation),
• conducting accurate data analysis,
• getting reliable actionable insights and improving decision-making.

In turn, poor data quality – and poor data management – can lead to inaccurate analyses and forecasts, missed leads, wasted resources, operational issues, and reduced productivity, to name but a few possible problems that can affect your business severely. Lost income is in the cards, too – organizations face a staggering $15 million of an average annual revenue loss, according to Gartner’s Data Quality Market Survey. The same report shows that businesses don’t do enough to tackle the financial cost of poor-quality data – almost 60% of companies don’t even measure it. It’s high time to do more – and make data your ally. In a highly competitive landscape, it’s vital to use data potential to the fullest and don’t let chaotic data drag you down anymore. And that’s something a well-adopted MDM strategy can help you with. Making sure the data is well-structured, and regularly updated, has yet another advantage – getting ready for challenges related to the Artificial Intelligence boom. 

<blockquote>“Everyone is going to be adding AI capabilities to their products, and many legacy data stacks and applications do not have a good way to export or stream data in a format that you can use to train AI.” - (Sam McAfee, Founder and Managing Director at Startup Patterns LLC, State of Software Modernization 2024 Report by Brainhub) </blockquote>

In brief, choosing to follow MDM strategies can be one of the steps on the way to the company’s comprehensive modernization. 

MDM implementation plan – 5 steps 

Investing in high-quality data management solutions can be a turning point for any organization, making it stronger here and now, but also better prepared for the challenges of tomorrow. But how to implement MDM strategies? What to start with? Let’s see. 

‍Step 1: Picking the right consultant

MDM is not an easy, one-off procedure, but a vast and complex territory, “comprising of a set of methodologies, strategies, disciplines, and technologies”, when you could get lost easily. For this reason, MDM implementation should only be designed and executed by full-fledged consultants who can handle this multi-faceted task and choose the right architecture type or MDM framework.

Step 2: Mapping the data landscape and gathering requirements

Such top consultants have the right amount of knowledge to make the whole process go as smoothly as it can. You should see through your current data management approach and also think about what direction you’d like to choose in the future. Industry-specific needs should be taken into consideration, too.

‍Step 3: Building infrastructure

Planing master data management, infrastructure development, and selecting the right MDM architecture style. Here, identifying data quality requirements is crucial, as well as embedding data quality controls. At this stage, everyone involved needs to always understand the business plan and keep business processes in mind – and not treat MDM as just technology.  

‍Step 4: System installation and configuration

The most efficient MDM implementation style should be chosen, based on your organization’s requirements and budget constraints. You need to be well-prepared – all software and hardware components must be in place before the actual system configuration begins. 

‍Step 5: Performance analysis

Regular check-ups, analyses, and updates of the chosen data management solution, are the last, but, actually, a never-ending phase of the process. Effectiveness metrics must be set and measured frequently. Also, the organization’s staff should be trained frequently, because data security or compliance areas undergo constant changes.

Successful MDM strategy by Brainhub: a use case

Master data management system was one of the projects that Brainhub completed for a leading global consulting entity – a Big Four company. Brainhub created a cloud-based data management tool for making scattered legal entity data a single source of information – a secure, reliable platform that streamlines and consolidates data from various sources.Some of the application’s highlights were:

• sensitive data security and isolation, with the data of different clients stored in separate databases,
• real-time data updates and tracking the history of data editing,
• data visualization in clear graphic reports,
• extensive access control, with roles and permissions customized,
• easy content management from the admin panel.

The bottom line was making the flow of information not only unified but also transparent, with data easily accessible across various organizational units. It’s also easily manageable, and report generation is automated – so that a lot of time, money, and other resources can be saved.

 Learn more about how the MDM system created by Brainhub helped The Big Four Client use its data to the fullest.

Master data management strategy – best practices

There are at least several things you should remember about to make MDM creation and implementation successful. Some of the best practices in this regard include:

Best practice 1: Collaboration

Multiple departments across the whole organization, as well as various stakeholders, need to be continuously involved in cooperation over the master data management.

Best practice 2: Maintaining data integrity

High-quality data means data that is complete, valid, accurate, and consistent – and thus reliable. Data integrity should always be on the radar, with procedures changed accordingly if it’s insufficient.

Best practice 3: Setting a benchmark

It’s good to set a specific measure to regularly assess if the MDM project is coming in the right direction as time goes by. 

MDM strategy wrapped up

Cutting corners is never a good idea and in the case of data migration, it will inevitably lead to disaster. The number of possible risks connected to data migration is significant, and concern: 

• data loss or corruption,
• data security vulnerabilities,
• performance drops,
• extended downtime,
• regulatory compliance,
• data quality issues,
• integration difficulties. 

If you want to avoid such a scenario, implementing the MDM strategy may be a very good idea. But you need to tread carefully if you don’t want to make things even worse. That’s because the MDM implementation is a long process that requires time, expertise, and vast experience. In too many organizations, data is a mess, but master data management can save the day and change everything for the better. However, it’s not a one-time procedure but a complex process that aims to create a central repository of data – or the single source of truth all the departments can refer to when needed. When successful, it can empower the company in many ways, including money-wise.

<blockquote>“System modernization can lead to an average revenue increase of 15%.” - (State of Software Modernization 2024 Report by Brainhub)</blockquote>

To make the most of the MDM strategy, and not miss chances it brings, you need to follow a thorough MDM implementation plan which covers things like setting data quality requirements and determining a measure to check if everything goes right.

Of course, experienced specialists are needed to execute the MDM strategy properly. Full-fledged Brainhub consultants know all the ins and outs, including cutting-edge technologies, efficient solutions, and best practices to make the process smooth, effective, and doomed to success.  

Still not sure how to create a master data management strategy right? If you want to be on the safe side when it comes to data migration, but don’t know what to start with, contact Brainhub now.  

‍