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MDM in the Real World
Putting master data management into practice.
Posted Sep 17, 2008
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By now we all know about master data management (MDM) systems and how they can bring about stunning business results. We've heard how they generate and maintain an enterprise-wide "system of record" that contains the consistent, reliable information necessary to perform vital business functions across a large organization. And, we've heard how implementing a strong MDM strategy can increase revenue and profits, improve customer service, reduce time to market, enhance regulatory compliance, and simplify reporting and business intelligence.

While these potential business results are intriguing, exactly how are businesses achieving them? What examples demonstrate how MDM deployments are transforming how businesses manage data? What follows are real-world examples of how organizations in the consumer products, financial services, hospitality, retail and technology industries are using MDM solutions to manage their most important data while adding to the company bottom line.

Increasing Customer Recognition and Loyalty
In the hotel business, guests aren't just the bread and butter, they are everything. So, when an international hotel company with more than $500 million in annual revenues and approximately 15 million annual customers realized it didn't know enough about its guests, the company got serious about customer data.

Although it used multiple systems to track guests, the company was only able to follow those enrolled in its loyalty program -- about 10 percent of its customer base. This meant the company was potentially under-servicing 70 percent of frequent guests who did not have a loyalty program number. With mountains of complicated data from multiple systems, representing 5,000 global properties across eight brands, getting a handle on the data was a daunting task.

The company chose an MDM system that could easily aggregate complex customer data without disrupting source systems, and seamlessly integrate with its loyalty program system. Once the MDM system was deployed, it was no longer a problem to identify frequent guests, even if they registered under different identities (variations on names and addresses without a consistent identifier), did not use their loyalty program number, or stayed at a number of the company's brands for a variety of reasons. By accurately matching guest information according to demographic and historical information, the company was now able to recognize guests, across all brands in its portfolio in real-time at the point of service.

Improving Customer Experience and Top-Line Growth
A massive retailer with a huge online presence and hundreds of brick and mortar stores knew that, even with annual revenues of more than $3 billion, it still had work to do to improve its numbers. So, the retailer began a strategic initiative designed to dramatically improve the customer shopping experience, with the ultimate goal of improving top-line growth.

Plagued by redundant records and an inability to properly recognize customers at any touch point, the company knew it was essential to get a grip on customer data to help it interact with customers in a more meaningful way. With its new MDM system in place, the retailer has created an accurate, real-time view of its approximately 40 million customer records from three disparate data sources. They can now recognize individual and household relationships, and have identified more than 11 million redundant records.

The retailer can now provide a complete view of transaction and customer history at the point of interaction, fulfill online orders at physical stores, better reconcile customer preferences, eliminate duplicate and inconsistent marketing campaigns, and remove the need to repeatedly ask customer loyalty program members for their personal information.

Understanding Customer Relationships and Improving Revenue and Service
When one of the world's largest technology companies decided that it needed to completely reform its global data infrastructure, an MDM system was the only way for it to achieve its goals.

The company was losing significant revenue due to incomplete software licensing information and territory assignment issues. The company needed to access composite views of all individual and organization data about customers, partners and suppliers along with advanced business-to-business (B2B) hierarchy management. An MDM system that could create a single view of customer and hierarchical data would help the organization to address its licensing problems and operational inefficiencies, define the true and total value of every customer, identify the most valuable customers within an organization, and even know when a customer purchased through multiple channels.

The end results? Enormous. By properly managing organizational-level data, the company has found $139 million in new licensing revenue and recouped $47 million in operational cost savings. The MDM solution also helped improve field productivity since sales reps now can access synchronized data from across the entire organization (CRM, software licensing and financial accounting applications) and gain a better picture of existing relationships and potential for cross- and upsell opportunities.

At the end of the day, it doesn't matter if you are a retailer or a financial services company, business goals are the same: to better understand customers while improving the bottom line. With an MDM solution in place, it turns out that these two goals do not have to be mutually exclusive. Knowing your customers is the key.

About the author
Marty Moseley serves as chief technology officer at Initiate Systems, where he is responsible for the company's strategic technology direction, development, and future product evolution. Initiate Systems (www.initiatesystems.com) enables organizations to strategically leverage and share critical data assets. He can be reached at mmoseley@initiatesystems.com.

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

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