Why Master Data Management Should Be Included in Your Master Plan

Whether it's a cherished family heirloom or a brand-new pair of boots, we all have possessions that would leave us sobbing like the finale of a good tearjerker if they vanished. This is why they’re handled with care and stored somewhere safe to maintain their value — an approach businesses take with their data as well.

Sure, a business needs customers and quality products to thrive, but real success comes from handling critical data correctly. Collecting a great deal of it is great — but managing, analyzing, and utilizing it well is what really makes the difference. By doing so, companies can grow, leading them to success. However, if mishandled, major problems can occur such as duplicate customer information, inconsistent product data, and more.

Typically, businesses have critical data coming in from various sources and have them stored by different departments in different systems. When this is the case, even the simplest of questions about your customers or products become tricky to answer accurately.

That’s where Master Data Management (MDM) steps in. MDM tools are crucial for brands across all industries as they solve common product and customer data challenges while driving business growth. 

What is Master Data Management (MDM)?

Master Data Management (MDM) creates and manages a single, consistent, and accurate source of master data across an organization, ensuring accuracy and uniformity. MDM is the technology, tools, and processes that centralize and standardize different data types, processing them from multiple systems within an enterprise to build a “master record”. This master data is the essential information that is shared and reused across different systems and applications, including PIM tools.

Master data can be divided into four main data domains: 

• • Customer: Contains data related to customers, such as their names, contact information, purchase history, and demographic information. Keeping this data accurate and up-to-date means more effective communication with consumers, stronger marketing, and better customer service.
  • Product: Includes data like product descriptions, features, prices, and inventory levels. Product domain data helps businesses manage their product catalogs and streamline supply chain operations.
  • Locations: Contains data such as store addresses, warehouse locations, and shipping routes. It helps businesses optimize their logistics operations and ensure timely and efficient deliveries. 
  • Other: Make no mistake, “other” doesn’t mean “unimportant.” This contains data related to license, warranty, contract, employees, and other critical business information.

What Does an MDM Software Do?

Think of MDM software like a big, universal filing cabinet for all your company's info, from customer names and addresses to product descriptions and inventory levels. The software usually includes data integration, data quality, and data governance capabilities, and provides tools for managing the lifecycle of master data, from creation to retirement, ensuring data is up-to-date and relevant.

MDM platforms are IT-driven solutions that bring harmony to chaotic technology systems. Simply put, they provide a “golden record” (a.k.a. master record).

But what’s a master record? 

Don’t let its various names confuse you, they all mean the same thing!

A master record is a single version of essential business data that eliminates the potential for redundancy, duplication, and mistakes by synchronizing and standardizing data across the entire ecosystem, making MDM a valuable tool for establishing data policies and guidelines, regulatory compliance, and boosting efficiency in operations. A master record  contains critical data businesses need to know, like customer, product, location, and business data, and organizations are dependent on them to execute necessary tasks more effectively, like marketing campaigns, service calls, or sales conversations. 

MDM vs. PIM

A tool for centralizing data and making your teams’ lives easier… sound familiar? That’s because MDM and PIM (Product Information Management) are both software solutions that help organizations manage and organize their data into a universal source of truth. Both MDM and PIM make it easier for everyone in the company to make important business decisions based on accurate and consistent information.

But while there are similarities between the two, don’t assume they’re interchangeable. 

MDM tosses a wider data net, providing a single information source for all types of data. PIM, on the other hand, is technically a subset of MDM that specifically focuses on managing high-quality product information. PIM is typically used by marketing and sales teams to support their efforts in merchandising and advertising products.

I know what you're thinking – if MDM stores all data, and PIM stores only product data, why not forgo PIM for the “all-in-one” solution that MDM platforms appear to offer? 

Resist the temptation! 

MDM and PIM complement each other to create an incredibly efficient system for marketing and sales teams, and ultimately, an enhanced product experience. 

MDM platforms can aggregate product information from across the ecosystem into a single PIM system. This information is then enhanced by marketers and combined with assets within the PIM before being distributed across all of a company’s sales channels.