About
Foundational Principles In the Community Diversity, Equity & Inclusion Technical Excellence Alumni TIAG Membership
Careers
Why Cohen & Company Our Culture Total Rewards & Benefits Intern & Entry Level Opportunities Experienced Opportunities
Contact
Akron, OH Baltimore, MD Chicago, IL Cleveland, OH Detroit, MI Milwaukee, WI New York, NY Philadelphia, PA Pittsburgh, PA St. Clair Shores, MI Youngstown, OH
Client Portal
Services Industries Knowledge Center People

About Our Services

We offer tailored solutions — whether private company or owner; public or private fund, adviser or fund service provider; or Fortune 1000 enterprise. Learn how we can help you.

Learn More

Assurance Services

Employee Benefit Plan Audits Internal Controls Investment Company Audits Private Company Audits SOC Readiness & Compliance

Tax Services

Federal Tax Planning & Compliance High Net Worth & Wealth Transfer International Filings & Structuring Investment Company Tax State & Local Tax Tax Credits & Incentives Transaction Tax Planning

Advisory Services

Business Valuations Data & Insights Digital Finance Solutions IT Strategy & Implementation M&A Advisory Outsourced Accounting Solutions Risk Assurance & Advisory Transaction Services Turnaround & Restructuring

Our Industry Expertise

Our industry experience means you can find professionals who speak your language and bring earned insights to the table. Learn how we can help you.

Learn More

Key Industries

Digital Assets Investment Companies Manufacturing Private Companies Private Equity Real Estate & Construction Technology & Life Science
VIEW THE COMPLETE LIST

Knowledge Center

Our team wants to help your team stay up to date. Browse our thought leadership, events and news for insights and a point of view on business-critical topics.

Learn More

Insights

Browse valuable articles and publications our experts have written to help you and your organization answer key questions — and consider new ones.

Read Our Insights

Events

Join us in person and online for events that address timely topics and key business considerations.

Explore Our Events

News

Find out what is happening at Cohen & Company, from industry recognitions and growth updates, to where we are contributing to important media stories.

Read Our News
People
Foundational Principles In the Community Diversity, Equity & Inclusion Technical Excellence Alumni TIAG Membership
Why Cohen & Company Our Culture Total Rewards & Benefits Intern & Entry Level Opportunities Experienced Opportunities
Akron, OH Baltimore, MD Chicago, IL Cleveland, OH Detroit, MI Milwaukee, WI New York, NY Philadelphia, PA Pittsburgh, PA St. Clair Shores, MI Youngstown, OH
Client Portal
Back to Insights

Making Your Master Data Work for You

September 26, 2017

Master data refers to the information that is essential to running your business. It is the core data used to build transactions and unique data combinations, such as bills of materials and quoted price lists, and orders and invoices. It’s critical that master data be as complete, accurate and consistent as possible across all users and systems to help reduce inefficiencies and reporting errors, and minimize added costs.
 
Not surprisingly, Master Data Management (MDM) is the foundation of high-performing, data-driven organizations. So how can you manage your critical repository of data? One of the best ways is to establish an MDM strategy. If your business does not have one in place, you’re not alone. A recent global study found that 94% of U.S. organizations face data governance challenges. Consider the examples below that stem from master data issues: 

Scenario 1: A valuable customer has contacted your customer service department complaining that a recent order they received does not meet agreed-upon specifications — maybe the dimensions are off, or the part is made of the wrong material, or perhaps there were not enough items in the case they ordered.
 
Scenario 2: Your organization receives word that upon customs inspection of a recent order of raw materials, the Harmonized Tariff Code filed at the port of entry did not accurately reflect the true material composition of the order, and now your organization is facing fines for the mistake.
 
Scenario 3: During the production scheduling process, a scheduler notices that there are not enough pieces of a particular sub-component available in inventory to complete the next production run. It seems that those responsible for demand planning did not have minimum inventory coverage levels for the item set up in the planning system. Now the Sourcing Department must spend more to rush order the item, and production will fall behind schedule. 

What Causes MDM Issues

All of the above scenarios can be traced back to less-than-ideal MDM. The source of such problems vary, but two reasons these challenges arise are rooted in how the organization manages its systems architecture and how they govern their data.
 
Systems Architecture
Many organizations struggle with master data due to their underlying systems architecture. If systems are disjointed and don’t have interface capabilities to “talk to each other,” master data is not easily transferred between systems. At best, master data may be manually keyed into each system by different areas of the organization, or, at worse, data is not shared at all between systems. This type of technology landscape leads to a greater risk of inaccuracies, inconsistencies, missing or duplicated records.
 
Master Data Governance
Another root cause of master data issues is lack of an MDM governance model. MDM governance involves: 

  1. An organizational structure to define, manage and execute policies and procedures that ensure data quality across the enterprise,
  2. Maintenance processes to standardize how data is created, maintained and archived,
  3. A data model defining what the data consists of,
  4. Security over who can approve changes, create, modify and delete data, and
  5. A monitoring function over data quality management. 

A data governance model ensures a plan is in place the can support the strategic direction, design, implementation and ongoing support for MDM across the organization. Without it, initiatives to address data issues and/or a disjointed technology landscape are short lived and fall short of achieving their desired objectives. 

Quick Ways to Enable MDM Capabilities

For businesses that are just beginning to enhance their MDM capabilities, there are some relatively quick and low-cost ways to add value. Most MDM issues arise not from technology challenges but from a lack of a clear process and human error. Consider addressing issues by: 

  • Optimizing the process for creating and updating master data. As processes are defined, establish stakeholder roles and responsibilities around the processes related to master data.
  • Creating a data dictionary for key master data attributes. By identifying the most critical data areas, developing clear and consistent definitions of what that data represents and how it is used, and making this data dictionary available to business users, you can often avoid simple errors and misunderstandings in data entry. Involving business stakeholders in creating and maintaining the data dictionary further enhances MDM ownership within the business. 

To achieve leading MDM practices, organizations must address process, people and technology. Best practices involve highly proactive data quality management processes, with documented and enforced policies and procedures around data creation and maintenance, supported by a defined data model and measurable key performance indicators (KPIs). It requires people taking ownership for defining and maintaining data at the right level of the organization and a cross-functional data governance team to continually monitor and address MDM processes and quality. Finally, successful MDM requires supporting technology to report on consistency in the use of master data across systems, and a systems architecture that allows for easier and reliable technology interactivity to share and update data.

Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts and circumstances.

Sign Up for Our Emails & Events

Receive insights from our specialists in a variety of areas and timely information on upcoming events directly to your inbox as they go live in our online Knowledge Center.

Subscribe Today
Subscribe to our newsletter
About Contact Submit RFP Privacy Policy
LinkedIn Twitter Facebook
© 2023 Cohen & Company