To understand what is meant by describing a Master Data Management (MDM) solution as the 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 having multiple sources of truth is that, when the data is input into these various solutions from different entry points, it will move between the systems and then exit from whichever system it happens to be in at the time.
This is an issue because it means there’s a lot of different information flowing around within your organisation between different siloes and systems.
Multiple sources of truth creates a lack of clarity
A supplier’s information could be entered into your 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 clarity 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 infrastructure, given that different business processes may be using it at the same time.
The question is, how can you get around this? The answer is, by implementing a Master Data Management (MDM) platform.
Why you need a Master Data Management solution
The reason why you should look to do this is because, as alluded to earlier, Supplier Master Data Management (SMDM) allows you to move towards establishing a single source of truth, rather than multiple. 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 on (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 organisation, and also when it leaves.
Moving towards Data Nirvana
Once you have gone through these steps you’ll be in a stronger position, and better able to measure and control your quality of 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.