Master data is not only impacting internal business operations, but also has significant influence on how a company presents itself to customers, according to a new report.
But the research findings also indicate that there is a large disparity in how businesses are responding to the data that is at their disposal.
The Aberdeen Research report The State of Master Data Management 2012
, indicates that the amount of available business data is growing at an average rate of 36% a year. Unstructured, free-form text such as product descriptions for product catalogues, ecommerce platforms, emails and complaint tickets are just some of those contributing to this growing complexity
The survey of 163 organisations found that almost half of respondents (47%) currently use these data types in their master records, while almost one in five plan to expand to in the future.
Businesses that had an MDM solution reported dramatically better performance in data visibility, number of data errors, data accuracy and how much time employees were spending on data-centric business processes.
“Master data, or critical information on customers, products, suppliers or similar categories, provides the foundation for many key business processes,” said Nathaniel Rowe, enterprise data management research analyst, Aberdeen Group and author of the report. “When this information is accurate, consistent and up-to-date, organisations have better visibility into internal operations, interactions with their business partners, and the behaviour of their customers. When it is missing, incorrect, or hard to find, organisations experience inefficiencies, delays, errors and poor business decisions.”
More than three out of five (65%) of the best-in-class companies surveyed had a formal MDM system and are 1.4 times more likely than Laggards to have adopted a formal master data management solution.
Elsewhere, the research also revealed that while the reliability and accuracy of master data is instrumental to support critical business operations and strategic business decisions, less than one in ten (7%) are able to measure and track the return on investment resulting from their master data program.