MDM for Increased Economies of Scale: Top Benefits and Best Practices

Key Takeaways:

• Leverage multi-domain master data management (MDM) to achieve and increase economies of scale, driving accurate insights and operational efficiency.
• Implementing MDM provides advanced geospatial capabilities and cross-domain intelligence for benefits like optimized logistics and enhanced customer targeting.
• To build economies of scale, start small with high-value projects, focus on the larger data integrity journey, and utilize domain expertise to build a robust MDM framework for long-term success.

The demand for multi-domain master data management (MDM) is at an all-time high. With the explosion of data from customers, products, employees, and locations, businesses are under pressure to manage their golden records effectively to ensure accurate analytics, operational efficiency, and risk mitigation.

But how can you scale MDM to address these diverse needs?

Understanding Master Data and MDM

First, let’s begin with a quick definition of master data.

Master data is a single source of common business data used across multiple systems, applications, and processes. Think of it as your business’s “nouns” – the data that comprises everything that makes your business run; core elements like customers, products, vendors, and locations that describe your operations.

These elements are divided into five main domains:

1. Party master data: Everyone who interacts with the business and their relationship with it, including prospects, customers, suppliers, vendors, and employees.
2. Reference master data: List of values that provide context to master and transactional information. These are commonly accepted values, codes, and classifications across your organization that are critical to reporting and analysis. Examples include: country codes, state abbreviations, currency codes, industry/product classifications.
3. Location master data: Physical sites that support the business. This data covers geographical and spatial data related to an organization’s physical assets, including branch locations, distribution centers, etc. This domain also includes addresses, coordinates, zones, and other location-specific attributes that are essential for managing the operational footprint.
4. Financial master data: Reporting and accounting categories within the business, encompassing information related to financial transactions within the organizations. Example data includes chart of accounts (CoA), cost centers, and price lists.
5. Revenue sources master data: A flexible category that represents what the business produces or manages and is adapted to your industry and business model. This master data encompasses an organization’s products, assets, and services.

Understanding these domains, and the data that’s most critical to your business, helps you craft a robust MDM framework that best addresses your unique objectives.

Now, with a standard MDM solution, the platform aggregates and consolidates the domain data into unique or linked instances, creating an ongoing authoritative master data reference source.

With multi-domain MDM in place, organizations can adapt to different MDM use cases, such as Product Information Management (PIM), Digital Asset Management (DAM), Product Data Management (PDM), Customer Master Data Management (CMDM), and more.

A multi-domain MDM breaks down data silos into one powerful, holistic view of data across all master data domains – providing a “golden record” of master data that accelerates cross-domain intelligence from a single interface.

3 Key Benefits of Increasing Economies of Scale with MDM

It used to be that having a separate master data management solution to manage your different domains was adequate, but those days are gone. Multi-domain master data management is now a requirement for complex data-driven businesses to achieve or increase their economies of scale – enabling competitive edge through fast innovation, adaptability, and responding at market speed.

Here are three key benefits to economies of scale with multi-domain MDM:

1. Deliver advanced insights at market speed

High-quality data is the foundation of effective decision-making – and MDM solutions maintain that quality to ensure every business decision is consistent, accurate, and timely.

Many MDM solutions can benefit from advanced geospatial capabilities that enable you to transform location data into actionable insights. This helps you with top use cases including:

• optimizing logistics
• accurately predicting market trends
• enhancing customer targeting

Cross-domain intelligence is another area of great value. Integrating your customer, product, supplier, and location data gives you a holistic view, uncovering hidden opportunities and enhancing innovation.

2. Increase operational efficiencies

Managing data across different domains is a huge challenge, often leading to siloed information and increased operational costs.

With the golden record of data you gain with multi-domain MDM, you greatly reduce the time and resources spent on data reconciliation and quality control, as the data is cleansed, deduplicated, and standardized at its source.

This streamlined data management process not only cuts down operational costs, but accelerates time-to-market for products/service, giving business a new competitive edge. Additionally, enhancing customer satisfaction and loyalty, further driving revenue growth.

3. Minimize risk and improve compliance

As the complexity of data regulations continues to grow, so does the need for consistent data integrity and compliance. Multi-domain MDM offers a comprehensive view across all data domains, whether customer, product, employee, or supplier data.

This proactive oversight is key to identifying and mitigating risks before they escalate – safeguarding your organization from data breaches, financial losses, and reputational damage.

Additionally, leveraging a multi-domain MDM improves compliance by consistently enforcing data governance and stewardship practices across the entire organization.

By standardizing data policies, procedures, and quality across all domains, a multi-domain MDM ensures your organization’s data can meet rigorous standards, whether global standards (GDPR in Europe, for example) or local standards (like the CCPA in California). 

Moving Forward and Building a Business Case for MDM

Your MDM journey begins with building a solid business case.

Be sure to focus on identifying pain points and quantifying the benefits of improved data management. Highlighting the strategic, operational, and financial impacts will help secure buy-in from the appropriate stakeholders. Additionally, be sure to celebrate the successes as you go to further emphasize the value that MDM brings to your business.

With a multi-domain MDM, your organization can achieve economies of scale with advanced insights and cross-domain intelligence to increase your agility, operational efficiencies with data reconciliation to reduce your costs, and reduced risk with a comprehensive view across all data domains to improve compliance.  Looking for more inspiration? Read this real-world success story as you’re starting out: Graco Implements Precisely EnterWorks MDM for Business Agility and Efficiency.

Read our eBook Master Data Management (MDM) Checklist: 3 Keys to Success and learn more about how to roll out an effective MDM program in your organization and how master data management (MDM) can provide you with one powerful holistic view across all your critical data domains.