Have you ever been to a meeting about recent sales or financial results, where everyone came armed with their own reports but couldn’t agree on the facts? Did the conversation become a debate over the accuracy and meaning of information, rather than a discussion focused on business drivers and strategies to move forward?
We’ve experienced these debates, or listened to our clients complain about them:
- “Our total sales by product category don’t agree. How did you group the products in your numbers, or are you missing some data?”
- “Which store locations are included in the year-over-year comparative totals?”
- “What do you mean by Net Revenue? Does it include or exclude product returns not yet inspected, or the discounts offered through a particular promotion?”
- “Did you include TBH positions in your formula for Revenue per Sales Staff Employee? I wouldn’t do that so I don’t trust your calculation.”
These questions could be evidence of issues with Master Data – essentially, how your data is described and grouped.
On a basic level, Master Data represents the names and meanings of data elements (for example product SKU codes and descriptions, customer codes and names, etc.), their attributes (for example a customer’s size or industry, whether a retail store is inside a shopping mall or stand-alone), and their hierarchies (for example how products are grouped into product lines, families, divisions, etc.). The scope of Master Data can also cover calculated performance metrics, including what they’re called and their formulas.
As you can see, it’s important for your Master Data to have both uniform names as well as uniform meanings. This way your company’s data becomes useful and meaningful to users, eliminating confusion. It’s also fundamental for delivering highly effective analytics and planning.
What are the key benefits of having good Master Data? For one, it helps you bring data together from different systems for more accurate and enhanced analysis and reporting. For example, it becomes possible to combine data from your accounting system, sales system and supply system in a way that gets you a more informed picture of product profitability.
Good Master Data (as well as good, clean source data) enables common understanding around the company. It helps create “one version of the truth,” often cited as a goal of Business Intelligence. At the same time it enables many perspectives of the truth – by utilizing the hierarchies and attributes you’ve defined you can analyze your business from different angles.
In addition Good Master Data increases the speed, accuracy and nimbleness of Business Intelligence, delivering actionable information where and when it’s needed to help drive your company toward its goals.
Are you calling a spade a spade, or still comparing apples to oranges?