In today’s business world, data is a valuable corporate asset which, when managed properly, can support a company’s ability to achieve strategic goals and financial results. A recent Hackett Group study revealed that over 70% of companies are planning on implementing a Business Intelligence or analytics application. In addition, these same companies are planning to establish data stewardship rules, standardize master data, and cleanse existing data, all components of a Master Data Management (MDM) strategy.
Executives can improve their ability to quickly access accurate data by adopting MDM best practices. MDM typically involves a series of consistent processes and policies with proper governance and oversight. Master Data Management is focused around several key and actionable business segments including, but not limited to, the material, customer, supplier, and employee master. Strong Master Data Management governance can drive greater consistency and accuracy of data, which can be an asset in driving world class operations, providing the ability to use data as a competitive advantage, and reducing unnecessary waste. In contrast, without proper governance, there is limited accountability and ownership of data, which creates compliance risk as well higher expenses and lost revenue.
A lack of sound master data processes and procedures can cause major issues that diminish the value of data and systems. Addressing these issues by implementing MDM ownership and governance can help resolve many of these concerns.
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In the case of customer data, an erroneous address can lead to a waste of marketing dollars. In a review of one client’s data, it was estimated that 20% of direct mail advertising was going to the wrong addresses at a cost of $1 per mailing. For a company mailing out millions of pieces of mail per year, that drives a significant amount of waste. Stay tuned as we continue to discuss Master Data Management best practices in future posts.
Andrew Solomon is a Senior Consultant in The Hackett Group's Strategy & Operations practice. His consulting experience comes from various projects at The Hackett Group, as well as two years spent at Accenture where he worked as a supply chain management consultant. He has worked on a variety of projects across multiple industries and service lines.