Master Data Management is that ubiquitous headache for small, medium and enterprise businesses alike. Everyone knows it’s important, but few really know how to do it and fewer still know how to do it well. For those who don’t understand it, the typical response is to ignore it in the blind hope that it won’t be an issue. This is enabled by the somewhat insidious problem that the cost of poor master data management practices is notoriously difficult to quantify. And so, day after day, around the country and the world, businesses small and large find it easy to continue ignoring the issue. All the while though, the problem compounds and becomes more difficult to fix.
It all starts with Master Data
Nearly every decision a business leader makes is based on data. When to buy, what to buy, how much to buy, how much to make, how to price, how to discount. The list is nearly as long as there are business decisions to make. Doesn’t it seem odd then that so many decisions are made in an environment of poor data? Low confidence data, filled with errors and duplicates, out of date, multiple systems or record, unconnected, decentralised, rouge files and legacy data, 3rd Party data. Trying to make decisions in this environment is like trying to land a ping pong ball in a paper cup from 40,000 feet, in a cyclone. It’s no wonder so many business decisions have unintended consequences including lost sales, increased overheads, missed orders, stock-outs and so much more.
There has to be a better way.
Change your mental model
Before businesses even start looking at a master data approach, they must change their mental model. They must pivot from viewing data as a matter for technology, to recognising it as a new asset class, of which the product is the lifeblood of their operations and improvement initiatives. In this day and age, viewing master data as anything less is seriously undervaluing its place in the business.
There’s somewhat incongruous proof that businesses aren’t doing this in the difference in treatment between data from a cybersecurity perspective and data from a master data perspective. Most businesses rightly fight tooth and nail to protect their data from theft and corruption, but then they don’t fight nearly as hard to drive business value out of that same data.
Master Data Value Drivers
Effective Master Data Management opens up a huge amount of business value. It enables integrated planning which can typically achieve 18% – 30% savings through reduced wastage on maintenance and production activities. It enables end-to-end supply chain orchestration by increasing supply chain visibility and improving customer confidence. Good Master Data drives better compliance and higher rates of catalogue spend and also provides a 360-degree view of the customer, matching them with ordering habits and enabling dynamic optimisation. It drives improved inventory and network optimisation from SKU right up to network level and enhanced source to pay collaboration by reducing functional barriers and delivering faster and more accurate cycle times. Master data even drives an enhanced view of asset and product performance to enable key strategic improvement decisions and assist in asset lifecycle management.
Effective Master Data Management is a game changer to supply chain organisations.
Barriers to effective Master Data Management
The principal barrier to effective master data is extraneous systems of record. A system of record is the source of master data for a particular domain, such a product data and customer data. The more applications over which a business spreads its master data, the more difficult it is to keep it harmonised and connected. This drives greater data maintenance overhead to keep data cleansed and accurate, which often becomes an obstructive business overhead. When data cleansing stops, master data quickly degrades and the whole activity soon becomes too difficult to manage, and businesses find themselves back in that familiar position.
Addressing Master Data Management to Change the Game
There are a few ways for a business to take control of its Master Data. The traditional approach is to conduct a master data assessment to define the material lifecycle for the data domains, followed by the development and prioritisation of use-cases aligned to business requirements then develop an improvement roadmap. This enables the development of a master data management platform that is extensible to deal with high priority use cases as well as lower priority and more complex use-cases. Deploy the platform throughout the organisation starting with coverage across priority domains and then maintain master data maintenance through the ongoing application of standards, audit and data stewardship.
If that all sounds far too complicated and exhausting, deploying an integrated supply chain platform such as SAP BusinessOne or SAP Business ByDesign provides an out of the box environment in which Master Data Management is optimised and largely automated. By bringing the majority of systems of record into the one environment and maintaining connected data along the length of a businesses supply chain, genuine game-changing improvements to business value can be achieved with remarkable speed and maintained with a fraction of the effort. This creates an environment in which your business can concentrate on what matters most – your customers and their needs instead of trying to crunch through the mire of poor master data.
Book a consultation with our team at Ozone IT to find out if our local technical experts can help you and your business take control of and capitalise on your data through a fully integrated ERP system.
