To learn more you can download the whitepaper at - http://go.onenetwork.com/master-data-management-wp
In this short video Chris Bennett, Head of New Business at One Network, talks about the how Master Data Management in the Cloud can improve your company’s financial health.
First, what is master data management?
MDM is a combination of technologies and information governance practices designed to confirm the integrity and accuracy of data across the supply network
What do traditional MDM strategies entail and how effective have they been?
Traditionally, ERP technologies and vendors have formulated most of the existing MDM strategies. Their typical approach is to maintain master data across an enterprises various and disconnected transactional systems. Yet this approach hasn’t worked very well.
The fact is today’s business executives don’t know which data records to trust and this makes it difficult to answer the fundamental business and financial questions which would allow them to manage their risk with data and information rather than physical assets and excess expense.
Just how much of an impact does MDM have on a company’s finances and overall business?
It’s very important. The simple fact is that most executives are completely oblivious to the data issues that are eroding the value of their organizations, which is in total contrast to their being up-to-date on most financial issues. Both are critical corporate assets with utmost visibility to both customers and shareholders, so why the gap?
Bad data management leads to a steady erosion of an organization’s credibility among customers and suppliers, as well as its inability to leverage business intelligence investments and make sound decisions based on accurate information is a primary causal factor in market share loss. It’s more than just a technical issue for the IT team.
What is the key underlying principle when formulating a MDM strategy that drives financial value for the business?
A MDM strategy enabled with today’s cloud-based network platforms begins with the basic premise that healthy financials are driven and sustained by a healthy relationship with our customers.
From a business performance perspective, fragmented and inconsistent data negatively affects cross-sell/up-sell, delays time to market, creates supply chain inefficiencies and weakens a corporation’s overall market penetration. When customer data has duplicates, is incomplete, or just generally inaccurate, companies will experience problems in revenue recognition, risk management, marketing and customer loyalty.
How can cloud technology help?
By bringing visibility and reliability to enterprise data, new MDM programs that are based on the latest cloud network platforms can improve business decision-making and drive improvements to both operating and financial metrics. MDM has been designed specifically to address the issues of visibility and reliability. More than just a technology platform, cloud-based network MDM provide all trading partners with a “Single Version of the Truth” to better answer important business questions. This enables internal teams and groups of trading partners to optimize their decision-making in unison.
For example, from a customer management perspective, many companies “maintain” mountains of customer data, but because the data is typically subjected to long lead times, lacks the right context due to poor process, or is inconsistent, they cannot apply the data effectively. As a result, companies miss opportunities to expand promotions or offer discounts and other incentives aimed at growing revenue. MDM can standardize and unify customer data across disparate systems, eliminating both latency and variation.
Is it true that MDM has been shown to improve earnings per share?
Absolutely. Earnings per share (EPS) is directly related to understanding customer level profitability. With the new MDM cloud platform that we’re talking about, business units are able to identify their highest and lowest profit customers by analyzing the amount of revenue each customer or customer segment generates, coupled with the cost of serving those customers or segments. Bundled with that segmentation analysis is a longitudinal analysis which allows us to understand the lifetime value of a customer. Knowing a customers’ total value allows companies to assign and deploy resources more efficiently.
Furthermore, real time consumer purchasing patterns and related causal variable analysis not only has the potential to significantly improve sales forecast accuracy, but also provides the ability to maximize consumer sell-through based on available supply. MDM enhanced sales and inventory planning lowers costs, increases revenues, and improve EPS.