BANGALORE: Master data management (MDM) is a vital success factor in constructing optimal customer relationship management (CRM) processes, as stated by Gartner, Inc. Gartner held that- through 2017, CRM leaders who avoid MDM will derive erroneous results that will annoy clienteles, resulting in a 25 percent reduction in potential revenue gains.
According to Bill O’Kane, research director at Gartner “Over the last several years, CRM software sales have outstripped overall IT spending. CRM leaders must understand the benefits of the MDM discipline to CRM and make it part of their CRM strategy. MDM is critical to enabling CRM leaders to create the 360-degree view of the customer required for an optimized customer experience.”
O’Kane alleged that organizations are moving to a more integrated CRM approach that focuses on the customer experience through improved customer engagement, across marketing, sales, customer service, e-commerce and all other customer-facing channels. This approach requires an understanding of the customer’s entire relationship and interactions with the company at any point during the customer journey.
Volumnising that – “This single or ‘360-degree’ view of the customer requires that all the operational master data pertaining to the customer – and often to product and service as well – be combined from all of the data silos where it currently resides,” said Mr. O’Kane. “This data is then checked and cleansed for duplicates while selecting the highest quality values across all data sources for each master data attribute. The result is a ‘single version of the truth’ for the master data that can then be integrated in different ways with those remaining data elements specific to transactions and interactions in the operational systems.”
In organizations applying best practices, this integration is most often done in a real-time service-oriented architecture (SOA) environment, with the MDM hub acting as a peer to the other mission-critical operational systems (such as CRM and ERP). This characteristically results in a virtual (federated), rather than a physical 360-degree view of the underlying data. A typical use case in this scenario is for the operational systems (typically including one or more CRM systems) that create or maintain customer master data to check the MDM hub for current instances of the customer data being entered or changed, and to alert the end user (as appropriate) to prevent the creation of duplicate customers or erroneous master data values. This process proactively protects the quality of the customer master data, facilitating a 360-degree view.
Once this all-inclusive, multichannel view of the customer’s activity within the organization has been accurately assembled, then the only limit to its usage is the imagination and creativity of business and IT management working as a team. As a case in point, buying patterns can be accurately aggregated across product types to enable creative cross-selling and upselling. Identification of customers more likely to cease doing business with the organization in the near term is expedited, so that they can be engaged earlier for retention purposes.
“In this scenario, customer segmentation becomes far easier and more accurate, giving organizations a better understanding of their customers and their likely patterns of behavior,” believed Kimberly Collins, research vice president at Gartner. Rhetoricising that – “Moreover, the MDM hub can be used to support these operations during real-time customer interactions, as well as to accurately populate analytics platforms – such as data warehouses or data marts – to support larger scale customer analysis efforts.”
MDM also delivers novel opportunities for CRM leaders to effectively utilize big data sources – such as social networks – and external data enrichment providers. Organizations have long made use of commercial data enrichment providers for applications such as customer segmentation, customer acquisition and prospecting. On the other hand, the past usage has most often occurred within a single system silo or business function such as marketing or sales, with no coordinated reuse across the organization.
“Companies are using social data to help them understand customer sentiment and behaviors, either in aggregate, for areas such as customer segmentation or issue resolution, or at the individual level to personalize campaigns and offers,” reportedly said Ms. Collins. Supplementing that – “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.”
A further emerging area of MDM-driven enhancement to CRM is business operations. As the pertinent master data in an organization is identified and integrated under the MDM umbrella, it often becomes clear to organizations that they have an opportunity to both consolidate and substantially advance the scope of responsibility within their CRM-related business functions such as customer service, sales, marketing and e-commerce. An MDM approach across these functions can provide a 360-degree customer view to the entire organization, ensuring consistency of the customer experience.