When to use Master Data Management and a Customer Data Platform? And do you even need to choose?

Every organization dealing with substantial amounts of (customer) data, has most likely considered establishing a data warehouse structure. The main reasons to do so, often include:

• Making sure that customer data are uniformly and readily available for a diversity of systems. For example, when invoicing and logistics are involved.
• Enabling the data streams to be integrated into reports. For example, when aiming for dashboard-related solutions.

However, reality proves that the amount, complexity, and application of all data are growing fast. An (in-house developed) data warehouse lacks the ability to process these streams.

Why a data warehouse isn’t always the solution
Every day, (customer) data flows in from all angles through a variety of channels. It ranges from new data, such as first party cookies and device IDs, to merges of existing data like customer groups. A data warehouse fails to convert all this data into useful information. So, without intelligent software in place, it’s difficult to connect the whole and identify new and existing customers. On top of that, there’s a gap between the needs of marketers and departments such as IT and BI. Marketers aim to capture, apply, and analyze customer knowledge to the fullest extent, whereas IT and BI prefer to use an accurate customer view.

In order to monitor each customer and meet the different departmental needs, stronger platforms like Master Data Management (MDM) and Customer Data Platforms (CDP) exist as a possible solution.

Master Data Management: continuously identify customers
When you’re focused on continuously identifying data and customers across all organizational processes, a Master Data Management platform serves as a solution. This type of platform is particularly useful when the identity of a customer must be targeted correctly and ‘mistakes’ are unacceptable. Agencies that use this platform in their daily operations are the Dutch Tax and Customs Administration and the Dutch National Police.

There are plenty of MDM platforms, each with their own strengths and assets. Human Inference, which is also part of The Data Agency, has developed a solution that specifically solves this aspect of data management. This solution is already being used by the BKR Foundation and others.

Customer Data Platform: achieve more with your customer data
Marketers always strive for more. They search for solutions that enable them to capture, interpret and apply customer data along the entire customer journey – and preferably by means of a platform that is easy to work with. Gartner® describes this as easy-to-use marketer-management solutions. We know it as Customer Data Platform technology.

A Customer Data Platform allows you to effortlessly gather customer data, interpret the information and use it again whenever required. This means that it provides you with everything you need to swiftly apply customer data, for example when working with campaigns, analyses, reports and dashboarding.

The strengths and weaknesses of both platforms. Our insights from the Gartner® report
Gartner® has studied both platforms, compared their features, and identified the strengths and weakness of each individual platform. An overview, as drawn from this study, indicates clear differences.

Yet, technology pushes forward. Apart from the fact that these platforms grow closer to one another, Customer Data Platforms are increasingly equipped with MDM functionalities. The Invenna Customer Data Platform is a great example of this development. The other way around, there are Master Data Management platforms that focus on creating CDP features.

Do I need to choose between the platforms? And how do I make the right choice?
The straight answer to the first question is: no. Organizations dealing with a diversity of complex (customer) data streams can benefit from both platforms. In other words, one doesn’t exclude the other – especially in a time when an increasing number of platforms are being developed to unite the best of both worlds.

In making your choice, consider:

• Whether you need to be able to define a unique customer with 100% certainty. Is accuracy a prime requirement? If so, then look for a suitable Master Data Management platform.
• If you want to capture and apply customer data for a variety of purposes. Are you planning on using whatever data, whenever and in whichever way you desire? Then look into options for a Customer Data Platform.
• Whether you are required to define a unique customer as well as capture and apply customer data for a variety of purposes. In that case, consider acquiring both platforms or one complete platform that encompasses all functionalities.

_{Gartner®, We Have MDM Software, So Why Would We Need a CDP, Malcolm Hawker, 12 August 2021. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. The used graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document.}