Research firm Gartner has indicated that the implementation of master data management (MDM) is critical to the success of constructing the optimal customer relation management (CRM) processes.
The company indicated that CRM leaders who opt to avoid MDM will derive incorrect or erroneous results that will impact their company's relationship with consumers, which has the potential to result in a 25 per cent reduction in potential revenue gains.
Bill O'Kane, research director at Gartner, explained that CRM leaders must understand the varying benefits that come from MDM in terms of CRM and make it part of their strategy going forward.
He added: "MDM is critical to enabling CRM leaders to create the 360-degree view of the customer required for an optimized customer experience."
In recent years spending on CRM has increased dramatically and businesses are increasingly integrating the discipline into their organisation's operations in a bid to improve the overall customer experience, utilising it to boost engagement across the marketing, customer service, sales, e-commerce and any other consumer-facing channels they operate.
To be successful in this endeavour, businesses need to understand the entire relationship between the customer and the company throughout the buying journey and afterwards.
MDM is an important factor in this, with the data used to create a "single version of the truth" that can be integrated in different ways. In organisations applying best practice, this integration is done in a real-time service-oriented architecture (SOA) environment, with MDM acting as a peer to other mission-critical operational systems, such as ERP and CRM.
MDM can also provide new opportunities for CRM leaders to make use of big data sources, such as social media, with the ability to coordinate reuse across the entire organisation, rather than in a single system silo.
Kimberly Collins, research vice president at Gartner, said: "As interest in the corporate use of big data sources like social network data has increased, so issues with master data of suboptimal quality are being raised that are virtually identical to those previously described with commercial data enrichment, and similar benefits are being achieved by those organizations that implement MDM to resolve those issues. Without MDM, attempting to identify a customer will result in the same issues of inaccuracy and expense as those using the more traditional commercial data providers with fragmented or unmanaged master data."
By Gary Cooper