How to Monetize Data in Five Steps
Master data management (MDM) isn’t what it used to be. It’s so much more, according to Forrester Analyst Michele Goetz, who wrote about it in a 2014 first quarter report, “The Forrester Wave™: Master Data Management Solutions.”
“Prior to 2011, MDM helped enterprises solve challenges pertaining to data quality and data integration that manifested as duplicate records in application systems and data warehouses,” Goetz writes.
At that time, it was basically a way to purge excess or defective data from customer or product data, depending on its heritage. It couldn’t really handle scale, complex relationships or hierarchies, she added. Then came Big Data, with new challenges related to “hyper-federated data landscapes,” as she calls it. Vendors adapted quickly.
“New releases of MDM technology emphasized data modeling, data linkage, and master profile orchestration over data integration, cleansing, and the golden record,” she states. “Today, organizations face an altered vendor landscape.”
Not surprisingly, this has led to use cases beyond the basic “master product or customer data.” Here are two uses I’ve seen highlighted recently:
Householding: Householding is the practice of grouping like data from multiple sources, and it’s not new. Back in the day, it was accomplished by ETL. Now householding is “one of the most prominent aspects of selling by many industries today,” according to MDMGeek.com blogger, Prashant Chan, a technical solution architect specializing in multiple MDM and data quality tools.
In that use, the goal is to link or group all the data about a specific person or household across multiple sources.
“What house holding information allows is the ability to find out the aggregated relationship of a family as a whole with the organization,” Chan writes. “For example, a retailer may want to group customers from the same family unit to reduce cost of marketing and also cater to the preferences of the household versus individual customer preferences.”
Even with MDM, householding comes with unique challenges, Chan writes. For instance, you have to figure out how the information is derived. You also have to periodically regroup if the individuals have status changes such as birth, marriage or divorce. Finally, it can be difficult to ascertain who in the household is a customer and which individuals haven’t even dealt with the company yet.
“Grouping of customers seems like a simple process but in reality is one of complex exertion,” Chan states.
If you succeed, however, the benefits will extend beyond marketing to customer service, sales and business efficiency, according to a DataMentors column:
For companies that rely heavily on direct mail, marketers can now send one piece of mail to a household, saving considerable dollars and resources and gaining a higher ROI (Return on Investment). Additionally, by gaining a sophisticated view of a household, marketers can better understand how a household changes over time.
Optimizing Brand Value. Enterprises with multiple brands face major headaches when it comes to managing their data. The VP of marketing at Stibo Systems, Terry Stickler, explains how MDM helps companies gain control of this data before customers jump ship. His advice targets the competitive consumer package goods (CPG) market, but the problems are applicable to any large supply chain or enterprise.
Already, some CPG manufacturers are using multi-domain MDM “to gain better control of the widespread information needed to promote their brand throughout the value chain,” Stickler writes.
How does MDM help build brand? Stickler offers some specific examples:
- Reducing labeling errors: “Publishing accurate information for brand managers, business units and value chain partners is a complex task, and many companies have come to rely on MDM technology to eliminate errors and redundancies,” he explains.
- Storing and tracking raw ingredients: The data is typically part of a bill of materials or a recipe for making the product. “Now, visualize taking that ingredient through the entire manufacturing process at all production sites, and then taking the end product through the value chain of distributors and retailers on to store shelves and into the hands of consumers,” he adds.
If you’d like to read the full Forrester report for free, a few places offer it as a free download with basic registration. I obtained a copy from Informatica, simply because it appeared first in my search.
Loraine Lawson is a veteran technology reporter and blogger. She currently writes the Integration blog for IT Business Edge, which covers all aspects of integration technology, including data governance and best practices. She has also covered IT/Business Alignment and IT Security for IT Business Edge. Before becoming a freelance writer, Lawson worked at TechRepublic as a site editor and writer, covering mobile, IT management, IT security and other technology trends. Previously, she was a webmaster at the Kentucky Transportation Cabinet and a newspaper journalist. Follow Lawson at Google+ and on Twitter.
