Master Data Management: Beyond Housekeeping to Intense Customer Satisfaction with Less Waste

Jason Lovinger

Master data management—what’s revolutionary about that, you may ask. The concept has been around for a long time. You’re right it has. However, many companies haven’t implemented it. And if they have, it’s typically within the scope of a single application or they view it as a type of record/housekeeping activity.

But master data management—especially when it comes to master customer records—has a significant impact on the business. Think of it as connect-the-dots for business. The more dots you connect, the easier it is to see the entire picture. And when is a complete picture a bad thing in business?

The Downside of Not Having Master Customer Records

My wife and I use the same company for banking, insurance, and a lot of our investments, so it should have been a no-brainer to update them on our move from Boston to Denver. Not so. My wife spent 45 minutes on the phone with them just to change our address because the various systems weren’t tied together.

Needless to say, this irritated her, which in turn irritated me and made me much less likely to do business with them in the future. But that’s only a small part of the problem. Since they look at me as nineteen different records, not one highly engaged customer, they don’t understand my total value to them nor all the ways that I’m engaged with them, and thus can’t:

  • Present new relevant offers to me
  • Determine whether they should spent a lot of time, effort, and money to remediate any problem I have

The Upside of Tapping Master Data Management to Service Customers

Let’s look at a simple process like order to cash, where customers often go through multiple sales channels. Customers create a profile and enter an order, which you must then process (packing, shipping, invoicing, and payment processing).

This simple process crosses multiple systems, and master data management gives you insight into all of it—even really complex processes—with outstanding results, such as:

  • Improve net revenues four to five percent, by leveraging a more complete understanding of their customers to target them with the right offers and deliver graduated levels of service
  • Cut costs per order 20 to 40 percent, by eliminating a lot of manual processing and reducing errors
  • Reduce cycle time per order 20 to 50 percent, by allowing an activity in one system to trigger activity in other systems, complete with all the data—automatically
  • Decrease labor costs 15 to 20 percent, again by eliminating manual processes

Clearly, master data management isn’t just a housekeeping activity. It’s about customer satisfaction and the tangible business impact of connecting the dots across all of your systems internally and externally. And it’s something that few, if any, companies can afford to ignore. Wouldn’t you agree?


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