Business runs on data, and today’s companies typically rely on digital systems to keep information organized. While the transition to electronic records has made it easier to collect and store data, it has also increased the amount of documentation retained for each interaction. Your organization’s ability to manage the vast amount of information moving through your systems each day will determine your long-term success. Fortunately, master data management (MDM) tools are specifically designed to meet this challenge. However, what is master data management and why should you learn about it? Read on to find out what data management is and how it can help your company succeed.
What is Master Data Management (MDM)?
What is master data management? MDM is the process of creating one authoritative data source. After passing through a rigorous sorting and scrubbing process, business-critical information is contained in a master file. The method involves standardizing, consolidating and quality-controlling key elements of an organization’s data. For example:
- Deleting duplicate data
- Eliminating incorrect data
- Identifying and classifying data consistently and accurately
- Creating a central repository to house data
Businesses that implement MDM processes enjoy a variety of benefits. Some of these include:
- Better-informed decision-making that is based on high-quality data and related reporting
- A deeper understanding of key players in business-critical processes, including the organization’s clients and partners
- An increase in the effectiveness of data management
- A decrease in the amount manual labor required to manage data
- Enhanced efficiency and process streamlining – particularly for complex forms and approvals that rely on data accuracy
Many business leaders believe that integrating master data is an issue of exclusive concern for the IT department. However, this perception is not correct. MDM impacts all areas of the business, as the information included in MDM processes range from customers and vendors to products, locations and more. A failure to properly manage data has widespread consequences, including missed sales opportunities and dissatisfied customers. For maximum success, roll out MDM enterprise-wide after obtaining buy-in from every department and every staff member.
The Risks of Unrestricted Data Access
The foundation of MDM is creating a simplified process for maintaining clean and reliable master data. Innovative organizations have determined that the key successful implementation of MDM methodology is to create a set of Master Data Change Management processes. Business experts can design processes to ensure that master data change requests pass through appropriate authorizations before altering any information.
For example, some data is accessed by multiple staff members on a regular basis. However, the ability to access the information should not automatically correspond with an ability to make modifications. Organizations that have not yet implemented appropriate controls often discover – too late – that a small change can lead to big problems. It is common for data sets to have complex relationships with other data sets. Altering one record may affect sub-assemblies, which subsequently impacts multiple products. For example, a single change that is not properly vetted could possibly disrupt your ERP software and bring down a full production line.
Implementing MDM Using BPM Software
A large percentage of data enters the organization through standard day-to-day processes. BPM software is a practical starting point for implementing MDM because master data should be generated and modified by well-designed business processes. BPM tools lay the groundwork for master data management by collecting and funneling data through the appropriate channels. Common examples of processes that require changes in master data include the Vendor Creation Process and Part Change Order Process. A solid process ensures that appropriate checks are performed before changes are authorized.
Use your BPM software to implement MDM in three steps:
- Create processes with standardized forms and authorizations throughout your organization. This prevents incomplete information and orients staff to common terminology, which prevents the misinterpretations of data later.
- Set up field validations to confirm that users enter the correct type of information into each field. The use of required fields also makes it less likely that your data will be incomplete.
- Use process variables to properly categorize and store the information entered in each case.
Eliminate Data Silos and Create Automatic Audit Trails
High-quality BPM platforms are nimble enough to connect to multiple external applications and eliminate data silos. This prevents duplication of data and acts as a central repository for data. For maximum success, the BPM software should also have connectors to your ERP, as this is where most of your master data will reside. The practice of using the same system across multiple departments or segments reduces the likelihood of misrepresenting or misinterpreting data. Most important, BPM software comes with built-in permission, so you can restrict data access on a need-to-know basis.
Finally, using automated workflows provides an audit trail of the information that enters your company. This makes it possible for you to locate the source of individual pieces of data, as well as pinpoint the source of any errors. With advanced BPM software, you can set up customized processes to automatically find and eliminate copies at timed intervals, and you can systematically update data and perform quality checks.
For more information on master data management and document workflow software, consult with the experts at ProcessMaker today