The advent of innovative technologies like video and social media is pushing the volumes of information that companies store skyward. In addition to increasing in size, data is also growing in complexity and variety. According to a new study by Aberdeen Research, the number of files businesses house is expanding at an average annual rate of 36 percent.
Free-form text, the format used for things like product descriptions, emails and catalogs, is a contributor to the growing complexity, especially as nearly half of survey respondents use it for master data. Even though the research firm found that master data is essential to improving internal business operations and giving decision-makers the ability to make informed judgments, only 7 percent of organizations use effective solutions to track progress and ensure they achieve a positive return on investment.
"Master data, or critical information on customers, products, suppliers or similar categories, provides the foundation for many key business processes," report author Nathaniel Rowe said.
Master data quality
is essential if businesses choose to leverage this information to make more informed decisions. The report noted that nearly two-thirds of best-in-class companies utilize master data management systems.
The study noted that businesses with MDM programs are able to perform better because of their ability to leverage important information to improve customer satisfaction and make fewer errors with data-centric processes. These organizations are also able to improve employee efficiency because they generally make fewer mistakes than companies that don't have data quality tools in place, giving them a competitive advantage over rival firms.
Cloud computing is predicted to be a major disruptor to the MDM market. The cost-saving benefits of the cloud are enticing to many businesses but the need to ensure quality master data is protected is slowing the adoption of the cloud, according to a Computer Weekly report.
By taking the proper precautions and implementing effective security tools, organizations can reduce the chances of public cloud environments corrupting or exposing master data.
"When this information is accurate, consistent and up to date, organizations have better visibility into internal operations, interactions with their business partners and the behavior of their customers," Rowe said. "When it is missing, incorrect or hard to find, organizations experience inefficiencies, delays, errors and poor business decisions."
Businesses should consider deploying MDM technologies to ensure they remain competitive and don't make errors that could have otherwise been avoided if the proper data quality tools were in place.