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Industry News Organizations use master data management to improve sales and business visibility 2011-03-08 Master data management has long been a technology that experts tout as improving institution-wide efficiency and, thus, customer loyalty for both major financial institutions and large corporations. A recent study from Aberdeen Group, called "Turning Pain into Productivity with Master Data Managament," studied users of MDM to find that top performers keep their systems clean, accurate and available to meet customers' needs, create greater transparency and boost company-wide productivity. However, the study did find that across all industries, the level of accuracy was extremely low, with nearly a quarter of organizations reporting no more than 50 percent of their master data was correct and properly classified. "When master data is incorrect or incomplete, it negatively impacts business decisions and day-to-day operations. Even worse, by the time such errors are discovered, the damage is usually already done," the company noted in a statement. Top-performing organizations, however, not only circumvented such problems with accuracy, but saw business benefits, such as boosting product sales by 8 percent over underachieving organizations. "Having a formal master data management program was perhaps the single largest contributor to success," said Nathaniel Rowe, research analyst for Aberdeen. "Ninety-four percent of top performing companies either reported that they currently have a program, or were in the process of implementing one. Conversely, only one out of every five laggard organizations had a master Data management initiative," added Rowe. The survey additionally noted that 57 percent of "Best-in-Class" companies have discovered, identified and classified all of their data, compared to 16 percent of "Laggards." Furthermore, top-performing companies that have adopted MDM best practices experienced a 23 percent reduction in their time-to-information since implementing the technology, while Laggards saw a 4 percent increase. Perhaps most important, however, was the effect that properly managed MDM systems had on customer loyalty, improving satisfaction and retention rates by more than 15 percent in 2010 for Best-in-Class institutions. Laggards saw these rates decrease by up to 6 percent. Once MDM systems have been implemented, Loraine Lawson, a blogger for IT Business Edge, argues that institutions should think more broadly about the technology. For example, she says that businesses and organizations should consider how this information can be shared with suppliers and partners to help customers and drive greater returns-on-investment.
FIs will need to transform underlying processes to accommodate digitization of banking
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