Master Data Management (MDM):
what is it and how does it work?

What Master Data Management (MDM) entails, why MDM is so important, and
the differences between MDM and Customer Data Management.

Nowadays, most organizations use many different applications and information systems, often spread across multiple departments. In these systems, large amounts of customer data are collected, making it inevitable that these data contain various spelling variations of the same customer name, occur double, or even contradict one another. The problem? The data are fragmented and quickly become polluted.

Incorrect information leads to wrong decisions and, eventually, to a loss of customer trust. Master Data Management (MDM) plays a crucial role in preventing this. In this article, we'll explain it in more detail.

Master Data Management: continuously recognizing customers

What is Master Data Management (MDM)? Simply put, MDM means an organization uses specific tools and processes to ensure that all essential company data are correct and in one place. This way, the organization lets everyone within the company work with the same accurate data.

In sum, Master Data Management goes beyond just data collection. MDM is the ideal solution when you must recognize your data and customers within all business processes and ensure the customer's identity is correct and accurate.

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Why Master Data Management is so important

Well-structured data is essential for a company to make the best decisions and achieve optimal results. Master Data Management forms the basis for this.

It focuses on all the essential data that serve a purpose in the functioning of an organization. It allows you to make decisions based on current and reliable information. Three additional benefits that Master Data Management delivers are:

1. With MDM, everyone speaks the same language

MDM guarantees one language within the entire organization. With a well-thought-out MDM strategy, all employees can use and understand the same data. This facilitates the cooperation between departments and accelerates the decision-making process.

2. MDM ensures reliable and qualitative data

We can’t stress it enough: working with one reliable version of reality is essential as it reduces inconsistencies and errors. Solid data quality is indispensable, especially when your daily routine involves trusting data, such as processing orders and sending invoices.

Offering effective customer service becomes a challenge when the correct data are missing. Similarly, a company can’t produce or sell efficiently without access to accurate product information.

3. With MDM, you’re building a future-proof foundation

Regulations and risk management are high on many organizations' priority lists. MDM contributes to this smartly handling sensitive information, which strengthens regulatory compliance. Simultaneously, a flexible MDM process allows companies to adapt to constantly changing business needs, laying a solid foundation for growth and a sustainable data infrastructure.

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Master Data Management vs. Customer Data Management: what are the differences?

Aside from using Master Data Management, there’s another way to manage each customer and meet the diverse needs of departments: Customer Data Management (CDM). CDM revolves around bundling and organizing all customer data into one central solution. A Customer Data Platform (CDP) is a convenient tool companies use to efficiently collect, manage, and centralize customer information.

A CDP focuses on creating a 360-degree customer profile, giving companies a complete view of customer interactions and preferences. It enables companies to make more goal-oriented decisions and engage in increasingly personal contact with customers. For example, analyses that explain customer choices and the creation of relevant campaigns with timely messaging. A good CDP improves data management and provides the tools for a refined customer approach.

Yet, when should you use Master Data Management and when to apply a Customer Data Platform? Do you need to decide, or could you go for both? The Invenna Customer Data Platform is the only CDP in the Benelux with MDM technology. Want to know more? Read here about what Invenna can do for you!

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Master Data Management in a nutshell

Master Data Management (MDM) is a solution for organizations that use various applications and systems. It ensures accurate and centralized data, prevents errors and inconsistencies, and offers benefits such as uniformity, reliable data quality, and a future-proof foundation for growth.

Next to MDM, there’s Customer Data Management (CDM), where customer data are centrally stored through tools such as a Customer Data Platform (CDP). This platform creates a 360-degree customer view that allows you to improve customer interactions and personalize campaigns.

Maximize the potential
of your data

MDM safeguards the quality of customer data and goes beyond simply collecting data. Discover Invenna's opportunities for your organization by requesting a demo or contacting us. We’re happy to help you make the right decisions. 

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