What is master data?
Master data is the center of information for a company because it provides important core data about operationally relevant objects that do not change over a certain period of time. This includes master data about materials, products, customers, suppliers and employees. This data is essential for companies since every business process is mainly based on master data. Incomplete or incorrect master data hence results in faulty business processes.
In the best case, these are only minor errors with hardly noticeable effects. Nevertheless, even small errors lead to considerable additional costs. If, for example, the colour of the title description of an article in a web shop is different from the colour in the detailed descriptions below (classic article master data), this will most likely result in error costs in the form of complaints, returns or clarification of discrepancies via phone. If other business processes access the faulty database, the error costs are multiplied.
Master data can therefore be seen as the crucial elements of all business processes. Their quality significantly determines how successfully and efficiently business processes can be carried out.
Master data of customers, suppliers and employees usually consist of address, customer number, social security number etc. These master data are usually transferred to an IT program and are used to enable processes such as salary payments to be carried out automatically. Customers can be identified by customer numbers and it is also possible to record sales, shopping frequency and buying interests. This information can be used to offer customers a personalized shopping experience. Material or article master data of products include article numbers, product dimensions and weight.
Why is master data so important?
However, their maintenance is just as important as the entry of master data. Master data is only valuable if it is up to date and provides correct information for everyone involved along the supply chain. This also means that there should be a central database in which changes are permanently maintained and thus always shows the latest status. Otherwise there will be incorrect deliveries, advertising that will not reach anyone, delayed payments and many other problems.
In today’s world, the amount of data is increasing significantly and that offers a great potential for companies if the data is carefully maintained and usefully interconnected. In this way, the data can be used for targeted advertising, strategic corporate decisions based on customer interests and the further development of automation in companies.
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