How Master Data Management Can Keep Big Companies from Drowning in Useless Data

An article from McKinsey & Company identifies a process called master data management (MDM) and maintains that it’s become essential, especially for big companies. MDM capabilities “can make or break an organization’s efficiency and reliability,” says the article, “particularly in complex organizations with multiple business units, where data silos can lead to inefficiencies and errors.”

Building on survey results of 80 international organizations, the writers discuss where and how master data management can be optimized and the challenges companies commonly face when trying to apply it.

One of the biggest benefits of MDM is that it’s a single repository that integrates the most recent data from every business unit and becomes a unique and trusted source. For example, marketing and sales could use it to formulate strategies for identifying prospects, understanding customers, and enabling cross-selling and personalized sales initiatives.

The first challenge will likely be making the business case for a process whose return on investment is difficult to quantify. Challenges in the actual application include bridging data silos and avoiding a tendency to treat MDM as just a technological function, under the IT budget, rather than an organization-wide strategic program that is informed by input from heads of all business units. 

When trying to integrate MDM into multiple existing systems, problems with the data, including incompleteness, inconsistency, and more fundamental problems, can also arise. 

The writers acknowledge that applying MDM can seem daunting, especially for large organizations with numerous complex systems to integrate.

But it’s becoming more intuitive, they say, in part because of tools enabled by AI, and they make their case that it’s worth the effort. “MDM,” they maintain, “can ensure that high-quality data is available for strategic decision-making, leading to cost savings and revenue opportunities across an organization.”