Guest Author: Ashleigh Bradley, Sr. Consultant at enVista
Master data is the sleeping giant for most companies. It’s crucial to making business decisions but not valued enough to ensure its accuracy and proper management. Data management is seen as a non-revenue generating part of a business, so it’s ignored or bits and pieces of it are assigned to different business functions to manage it, creating little data silos. In APQC’s 2020 data management survey, only 60 percent of participants said their business has a centralized data management program. The majority of participants also said there is more than one owner of data management and only 41 percent of participants said there are well-defined data owners. These survey results highlight the lack of importance most businesses put on ensuring their data is monitored and accurate.
The Consequences of Ignoring Master Data
It’s not until a major business project or system implementation that turning a blind eye to this sleeping giant comes back to haunt a business. When the request for data comes, it’s either unavailable or incomplete. The project either stops dead in its tracks until the business can provide the data the project needs, or it will move forward with a lackluster result due to the known inaccuracy of the data used. Don’t let this happen to your business.
The Cost of Poor Data Quality
In a 2020 Gartner survey, only 25% of organizations said they measure the impacts of their key master data. With 75% of companies not validating that their data is working to help the business, it’s not surprising that in 2021, Gartner estimated that businesses lose on average 12.9 million dollars a year due to poor data quality.
Data: The Lifeline of Supply Chains
In the supply chain world, we all live in, data is our lifeline. In APQC’s 2023 Supply Chain Priorities and Challenges Survey, for the second year in a row participants predicted big data and advanced analytics as a top trend to impact supply chains over the next three years. Will your business’s supply chain get left behind the trend? Not using your data to your advantage can lead to poor market intelligence, incorrect forecasts, resulting in lost profitability, excess inventory and stockouts. Use your data as a valuable resource, don’t let it hold your business back.
Understanding Master Data
So, what is master data? When you look into your ERP system, is every field considered master data? Luckily the answer is no. There are a few criteria that can help to determine if a data attribute is master data. Some of these characteristics include if the data attribute defines a unique entity characteristic, if the data needs to be consistent and uniform, and if the data is used as a unique identifier. Gartner has created a master data evaluation process to help businesses determine what fields they should consider part of their master data. The most important data criteria is its importance or value to the overall business. If the data attribute is used in important business outcomes and it’s used widely across the organization, that attribute should be seen as master data.
Assessing Your Master Data
Unsure about the state of your business’s master data? Here are some questions on where to help determine the current state of your master data.
- Who are the key stakeholders in the quality of master data management?
- Are the master data fields identified and documented? Is the reason why the field has been identified as a master data field documented?
- Is the master data maintained at the appropriate level of detail?
- Is your master data management process clearly defined?
- Is it clear what team is responsible for managing and maintaining different areas of your data?
- Are permissions set up appropriately or can anyone edit and alter your data? When master data gets updated is there an approval process? Are key stakeholders notified?
- Is there a quality standard defined for master data?
- Are there KPIs in place to track data accuracy and its impacts on the overall business?
- Is reporting available to highlight data integrity issues?
Leveraging Data for Success
In summary, neglecting master data management can severely hinder supply chain operations, leading to project delays and significant financial losses. Despite the alarming statistics revealing the lack of measurement of master data impacts, businesses can still turn this around by prioritizing data integrity and implementing effective management strategies. By addressing key questions and focusing on data quality, businesses can unlock the full potential of their supply chains and stay ahead of the competition. Don’t let bad data management impede your progress – leverage your data as a strategic asset to propel your business towards success.
Want to learn more? Contact enVista today – let’s have a conversation.®
