Since the introduction of the General Data Privacy Regulation (GDPR) in 2016, data privacy has become a hot topic for businesses across the world. The first US-based regulation, the California Consumer Privacy Act (CCPA) is now in effect, and similar bills are on the way in states across the country.
Master data management (MDM) is the best solution for any company required to abide by data privacy laws. At its core, MDM is a framework for systematic organization across all areas of a company. Everything related to data—infrastructure, processes, and people—is analyzed, organized, and continuously managed. This ongoing maintenance keeps the business well-positioned for any data subject requests or new regulations. However, adopters of the framework experience additional benefits as outlined below.
1. Managed data is reliable data.
A key part of master data management is establishing a dossier on how data moves through the business. This includes where data comes from, what it is, where it’s going, who has access, where it’s stored, and how/if it is deleted. As this information is diagrammed and catalogued, the organization can begin to refine its data consumption and use, resulting in cleaner and more secure practices. This leads to data that positions the company well for other new changes, including:
- Analytics hubs. With accurate data, organizations can confidently use tools like analytics hubs to understand the state of their business and quickly make decisions. Hubs can feature additional insights and forecasting from data science.
- Machine learning / Automation. When data is clean and organized, it becomes usable for artificial intelligence. Reducing human involvement lowers the risks of error and nefarious intent, further bolstering the company against privacy violations, but it also improves efficiency and employee experience, discussed further below.
- Potential mergers and acquisitions. As the world economy continues to shift in response to COVID, master data management helps companies prepare their assets for new opportunities and unexpected changes.
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2. Optimized processes save money and reduce risk.
Master data management involves detailed analysis of processes across lines of business. This transforms diverse stakeholders into active participants in the management of information, contributing to an improvement in:
- Efficiency. When people are aware of each stage in a process, they’re better able to identify redundancies and areas for improvement.
- Knowledge management. Documentation and governance create a data repository that is accessed securely and appropriately—regardless of employee turnover.
- Change management. With information organized and people informed, undertaking organizational change is faster and less disruptive.
3. Data governance improves the customer experience.
The potent combination of widespread internet culture, privacy regulations, and stay at home orders have made people more concerned than ever about their data. Master data management improves an organization’s relationship with its customers, specifically:
- Customer service. Service representatives can respond quickly and seamlessly, regardless of the customer’s preferred channel.
- Customer trust. Master data management increases customer confidence that personal data is being used ethically and appropriately.
- Customer involvement and retention. Consumers are more likely to stay with a brand—and help grow the brand’s community—if they’re confident that their data is managed properly.
If your organization is struggling with data privacy compliance and data management, you’re not alone. Some companies are overwhelmed and don’t know where to start, while others are intimidated by the perceived costs. Others are afraid that initial implementation would severely interrupt productivity. In reality, the master data management journey is different for every organization—but the basic ROI is the same: clarity, security, and opportunity.
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Evan Alkhas is a Strategy Manager at Logic20/20 with extensive knowledge in robotic process automation, virtual assistants, business process optimization, and technical product management.