Without high-quality data, your business decisions are based on inaccurate information! Boost your overall business performance with best practices for master data governance.
As technology improves over time, businesses who adapt and acquired that technology are better informed and connected than ever. They leverage the high volume of available business information to gain actionable insights. Business data and analytics are important to business operations, especially for wise decision-making; however, companies are making bad decisions based on poor data.
According to Gartner research in 2019, the average financial impact of poor data on companies is at least $15 million per year. Unfortunately, companies don’t recognize whether the decisions they’re making is a good one until later.
So, how can your company avoid poor decision-making? By ensuring your data is valid and accurate!
In this post, we’ll tackle the basics of master data governance, how it relates to SAP and the supply chain, and its best practices. Read on!
Before getting into master data governance, let’s understand what the master data is. The master data is the core information within an enterprise that describes how business in conducted. Master data can include pieces of information on customers, products, locations, etc.
While there’s a high volume of available data, you don’t need all pieces of information to continue doing business. It’s up to the company to decide which data are reusable and most valuable to maintain.
Because the data crosses various divisions, it can become duplicated, fragmented, and out-of-date. The decrease in quality of business information eventually leads to the need for accurate and consistent data.
That’s where Master Data Governance (MDG) comes in. MDG refers to the management or handling of data within a system that are shared across organizational departments.
To improve data quality, MDG standardizes definitions of data terms and usage, eliminate duplicate information, and update fragmented data to provide a “single view of truth” across all departments.
The common issues caused by poor-quality data include high maintenance costs, loss of revenue, dissatisfied customers, and compliance issues. Sounds familiar?
Improving your data quality will streamline your processes and boost your overall business productivity and performance. Clean up your data to ensure that your company has a good foundation for future decision-making.
The benefits above apply to all companies. High-quality data isn’t limited to just a few industries. All companies rely on business data to successfully operate and plan accordingly for the future. With governance, you improve productivity and operational efficiencies by providing consistent and reliable master data across your company.
MDG should be at the core of your supply chain and logistics strategy. Supply chain performance depends on consistent definitions of customers, products, locations, and more.
The importance of master data in logistics is only growing. First, supply chain performance face pressures from competition, compliance, and social responsibility. Second, companies are increasingly expected to understand their customers’ needs and, therefore, rely on behavior data. Third, a focus on collaboration between partners require data consistency for improved performance.
So, what kind of logistics data should you pay attention to? For starters, we suggest:
With high-quality and easily accessible data, your supply chains become competitive and efficient which allows resources to be allocated to innovation rather than solving problems that would’ve been avoidable.
For SAP functional personnel, integration projects are crucial to execute well. Both small and large products, first and foremost, require standard and consistent data.
If you’re moving to an ERP system like SAP S/4HANA, understand that a common misconception is that the ERP system would provide standard, consistent data across your network. On the contrary, an ERP tool is not a one-stop solution for data management. Conducting an audit of your business data is the most important step to prepare for a S/4HANA migration. You want to migrate to a new environment with clean data for a fresh start.
Not only does SAP projects require high-quality data, SAP itself offers a Master Data Governance solution. With a single solution, you gain a single, trusted view of your data to address any operational challenges head on.
If you’re strategizing a digital transformation with SAP products, it’s pivotal for you to get your fractured and inconsistent data under control before you do so!
Having accurate and consistent information on products, suppliers, customers, etc. helps optimize your processes. Here’s a few best practices for master data governance: