To understand what we mean when we talk about using a Master Data Management (MDM) solution as your single source of truth, it’s probably easier to start by looking at the multiple sources of truth that many businesses currently try (and struggle) to manage – namely Supply Chain Management (SCM), Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM).
The problem with trying to manage multiple sources of truth is that – when the data is input into these various systems from different entry points – you will end up with a lot of data flowing around within your organisation, between different silos and systems, that is difficult to track, manage and consolidate.
Multiple sources of truth lead to a lack of clarity
A supplier’s information could be entered into your system infrastructure in one state, then change and fluctuate as it is moved between your sources of truth by different business functions, before exiting your infrastructure in a completely different state to that in which it entered.
This lack of visibility makes it hard to keep track of how information is changing as it moves between solutions such as ERP and CRM, and therefore this has the knock-on effect of making it hard to measure its impact or improve its quality once it’s already within the system infrastructure, given that different business processes may be using it at the same time.
Why you need a Master Data Management (MDM) solution
A Supplier Master Data Management (SMDM) platform allows you to move towards establishing a single source of truth, rather than trying to manage multiple. But what does that actually mean in practice?
Master Data Management essentially means that, when data is entered into your organisation’s IT infrastructure, you are taking the emphasis away from managing records on each different system you are using – whether it’s SCM, ERP or CRM – to instead relying on accurate information being stored in (and flowing from) your MDM platform.
This gives you the freedom and flexibility you require to change the way information flows internally within your organisation, ensuring that information is accurate both when it enters your business, and also when it leaves.
Moving towards Data Nirvana
Once you have gone through this process you’ll be in a stronger position, and better able to measure and control the quality of your data.
The next step to take in your journey towards data management nirvana is to go beyond just looking at the flows of supplier data within your organisation, but to also explore how you can work more effectively with your third-party data providers and business partners.
If you’re interested in finding out more about how you can reach the state of Data Nirvana, you’re in luck. We have a detailed report on this very subject, which you can access here!
This blog was first published in May 2019, updated in March 2020