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This is the second article in our Master Data Management series. If you missed the first article, you can read it here: What is CRM Master Data Management?
In this article, we focus on how Master Data Management (MDM) works alongside Data Governance (DG) and why organizations see the most value when both are implemented together.
We also offer a full series on Data Governance Best Practices, which can be found here.
Although MDM and Data Governance are closely connected, they serve different purposes.
Data Governance is a broad discipline, that sets the policies, processes, standards and roles to ensure your CRM data is managed consistently, effectively and used responsibly across the organization.
For more details, see our Data Governance White Paper or Full DG Series.
The DAMA Framework
DAMA (Data Management Association International) is a global non-profit dedicated to data management best practices. Their framework is a widely used reference for defining how data should be managed across the enterprise.
Data Governance sets the rules and policies, Master Data Management focuses on the data assets that are governed by those DG rules.
MDM ensures that an organizations' Master Data – such as customer, product, or vendor information is
According to DAMA, MDM shares several areas with Data Governance, shown in green in this framework.
Simply put,
Data Governance = the “Why” and the “What” of managing data – i.e., “Why do we need to manage our data and what are the rules and standards?”
Master Data Management = the “How” and “Where” – i.e., “How do we build the single source of the truth and where is the consolidated version of master data stored and maintained”.
The main goal is to achieve high quality CRM and enterprise data, a combined MDM and DG strategy brings many additional benefits.
1. Improved Security (Internal and External)
INTERNAL
EXTERNAL
MDM ensures data is stored and maintained in a controlled environment, while DG defines who can access it, how it is accessed and under what rules.
For more on this, see our article Cost of Poor CRM Data Quality.
2. Enhanced Customer Experience
MDM providesaa Single Customer View (SCV), enabling:
With all customer data consolidated and aligned, users can trust that what they see is correct.
3. Greater Consistency & Accuracy (Trust in the data)
A combined DG and MDM strategy creates a single source of truth across your CRM, ERP and other systems. This leads to:
Data Governance provides the policies and guardrails, while MDM enforces them at the data level.
4. Improved Data Quality
MDM includes processes for:
These processes ensure data quality is consistently maintained over time.
5. Better Decision Making
Accurate and complete master data provides:
6. Increased Efficiency
Centralized master data eliminates:
Users can access accurate data quickly and easily, reducing time wasted searching, verifying, or reconciling information.
7. Reduced Workload
With a unified MDM platform:
This reduces both operational workload and overall cost.
Master Data Management and Data Governance each provide value on their own. However, the real benefits emerge when the two work together.
Together, they drive better data quality, stronger security, improved customer experiences, more efficient operations, and better decision-making.
This closes the second article in our MDM series.
In the next article, we will cover the 7 Data Governance Deliverables needed for Successful Master Data Management.