Answering the question of “what is a Customer MDM?”
Across the globe, in all industry segments, data drives business processes, and systems.
The overall organization, its employees, and its customers benefit when this data is shared and accessible across all business units. A unified single point of access for the same customer lists and data used to run the business. On the whole, business data users within the organization generally assume that the customer data that they have access to is consistent across the whole business until they identify anomalies.
The reality though, is that customer data evolves in a more organic and somewhat haphazard way than data management professionals would prefer. This is especially true in larger organizations. Mergers and business acquisitions, projects and initiatives, and other general business activities often result in multiple systems being created, that often perform a similar or exact same function but for a variety of reasons, these redundancies must coexist.
The result is that these conditions inevitably lead to inconsistencies in the overall data structures and the data values between the various systems. This variance leads to increased data management costs and organizational risks.
The general consensus is that both data management and organizational costs and risk can be reduced through the dual strategies of Master Data Management and Reference Data Management.
Master Data Management is about the management of data that relates to organizational entities. These organizational entities are objects like logical financial structures, assets, locations, products, customers, suppliers, and employees.
These same structures provide the necessary context for smoothing of business transactions and transactional and business activity analysis.
Within them, are entities, real-world persons, organizations, places, and things as virtual objects. These same entities are represented by entity instances. In digital forms, they are effectively digital entities but really they are data records. Master Data should represent the authoritative, most accurate data available about key business entities.
When managed well, Master Data entities are trustworthy and can be used by employees in partner engagement with confidence. Surrounding these entities, are business rules that dictate formats, allowable ranges, and characteristics that should be applied to appropriately frame the master data values held.
Common organizational master data may include data that relates to partners that are made up of private individuals, organizations, and their employees. That same data may describe their role, their relationships, and essential attributes that might be useful for engaging with them as an organization.
Typical people-based master data entities are objects like customer, citizen, patient, vendor, supplier, agent, business partner, competitor, employee, or student.
Seeking the truth
When multiple repositories of these entities exist, there are potentially different versions of ‘the truth’ and it becomes difficult to work out which one is correct and whether in fact, two or more entities are referring to the same thing.
In order to do so, one must have an understanding of the origins of the data. A defined System of Record (SoR) is often considered an authoritative system where that data is created/captured and maintained in a disciplined and controlled way.
The capture and maintenance are undertaken with defined rules and expected outcomes. Historically this would mean that the Point of Sale system is there to support selling activities, ERP to support make-to-sell or buy-to-sell, and CRM to support selling, service, and support of customers.
For any of these systems to be deemed trustworthy sources, they need to be generally recognized as holding “the best version of the truth” in relation to records they hold, based on automated and manual data curation. That trusted source is sometimes also referred to as a Single View. Within that system, the entities are often referred to as Golden Records.
Systems of Reference similarly, are authoritative systems where reliable data is held and maintained to support proper transaction processing and analysis. Those systems of reference may or may not originate their own data.
Historically, Master Data Management (MDM) applications, Data Sharing Hubs, and Data Warehouses have often served as systems of reference.
The challenge is that different systems have different purposes and often no single system describing the same entity, needs to be describing the exact same characteristics of that entity. The question then becomes, can any of these systems truly be “the single source of truth”?
Master data management efforts often pursue the consolidation of entities from the many sources that create and contain them and then formulate a composite record that may be incomplete and only a partially accurate representation of all the entities held. For different entity users that can mean that they have less faith in the “golden records” that the system presents. When this is the situation, the representation may switch from “Single Source” to “Trusted Source” suggesting that measures are in place to drive consistency, accuracy, and completeness in the entity records with minimal ambiguity and contentiousness.
Gartner defines Master Data Management as “a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency, and accountability of the enterprise’s official shared Master Data assets.”
MDM is therefore a discipline, made up of people, processes, and technology. There is often no specific application solution despite the fact that vendors will often use the acronym to describe their products, systems, and platforms that manage master data but that does not mean that they are effectively managing the master data, simply that they have characteristics that, when used correctly. can assist in proper master data management.
As you can imagine then, when something is described as a Customer MDM, it is a practice that relates to the management of digital customer entities. That practice could be paper-based also but we’re assuming that at scale you’re more interested in digital record-keeping.
The CMDM systems then, are the people processes and technology that support the customer master data management practice. The CMDM platform concept is therefore a composite software application on-premise or in the cloud, that provides metadata and data that relates to the management of the customer entities.
CMDM Platforms and related technologies for Customer Master Data Management are offered by many of the leading global software brands as parts of multidomain MDM like SAP, Oracle, IBM, and Informatica but there are some specialist offerings that you might not have heard like Ataccama, Pretectum, Profisee, Reltio, Riversand, Semarchy and Stibo Systems