As explained in Chapter 1, “Introduction to master data management and business process management” on page 1, the integration of MDM and BPM delivers real value to organizations. MDM ensures that master data is complete, accurate, and trustworthy, and BPM ensures that this data is available to the business users who need it within the business processes that require it. Without MDM, business processes act on inaccurate data and result in ineffective outcomes. Without BPM, master data is not used to improve business processes and outcomes.

This chapter highlights ways that MDM and BPM work together to improve specific business processes. It includes the following sections:

Organizations that deploy MDM solutions often start with a back-office focus. They start by integrating the sources of master data to the MDM hub. They reconcile multiple records for each master data entity into consolidated references or records. They also implement data stewardship to improve the quality of these sources master data. You might call this passive integration. Passive integration is an approach that uses MDM capabilities to make master data that is created elsewhere more accurate and trustworthy. This approach is generally where most organizations start with on their MDM journey, resulting in quick time-to-value.

Having conquered passive integration, organizations can then expand their use of MDM to use MDM capabilities to improve business processes that create master data. Rather than just using MDM to passively improve master data after-the-fact, these organizations use MDM to ensure that master data is accurate and trustworthy at the point of creation. You might call this active integration because it is a proactive, rather than reactive, approach to improving the quality of master data.

Consider this question: Where do duplicate customer records come from? Often, the root cause of this duplication comes from existing systems and processes that make it difficult to find existing records for customers. When a user does not know that a record for the customer exists (because they cannot find it), the user creates a customer record.

The following example shows how MDM and BPM can improve this process of master data creation. A salesperson just found a sales lead for a prospect named Redboks Corp. Before the salesperson enteres this prospect into the CRM system, the salesperson searches for Redboks. After not finding a match, the salesperson creates a customer record. Fortunately, the organization implemented MDM, at least in a passive approach. The MDM solution recognizes that Redboks Corp. is the same as an existing customer Redbooks Corporation, and the data stewards correct the information later. When used appropriately, MDM can help to actively find the existing customer record. By integrating the process for entering sales prospects with MDM for the initial search, the salesperson can find the existing customer record from the start and avoid cleaning up the data later.

The combination of BPM (to model and enforce the business process) and MDM (to accurately identify the customer) provides a powerful solution to ensure that master data is accurate and trustworthy from the point of its creation.

As explained in the last section, organizations can realize more value from their MDM investments by using MDM in their processes that create master data. The benefits of MDM do not end with improving master data creation. The ultimate value of MDM is achieved when complete and accurate master data is made available to business users and improves operations and decision making. This concept is called master data consumption.

How often do customers receive offers for credit cards that they already own? How many hotel associates have to ask whether a customer has stayed there before because their point-of-service system cannot tell them? Shortcomings in business processes and applications like these types can lead to customer dissatisfaction and lost revenue opportunities. Alternatively, receiving relevant and targeted offers and being recognized as a valuable customer engenders loyalty and increases customer spending.

When decision makers have access to complete and accurate master data, they make better decisions and feel more confident about the data on which they base their decisions. Consider the following questions that benefit from accurate master data:

When you answer these questions and make decisions based on them, you need all of the relevant data that is necessary to inform your decision. You need to know all of the business that this customer does with your company, across all lines of business, regardless of any silos. You need to know how profitable the customer is, taking all of this business into account. You should know the relationships that this customer has with other key customers and stakeholders so that you can consider how this decision might affect them.

MDM ensures that all of this data has been consolidated and is complete and accurate. Business processes that involve these kinds of decisions should make this data available to the decision makers when and where they need it.

Organizations try to increase wallet share of existing customers by presenting them cross-sell and up-sell offers. To present meaningful offers to customers for additional products and services, organizations need accurate and trustworthy data about these customers. They also need to understand which offers are likely to be most interesting to each customer. Otherwise, customers start to ignore the offers, or worse, they become dissatisfied with them.

The business processes that identify campaigns and offers for customers can be improved by using master data. These processes should incorporate master data into campaign and offer management.

How much money do organizations waste sending multiple mailings to the same customers, sending mailings to the wrong address, or attempting to send mailings to invalid addresses? MDM helps eliminate this waste by ensuring that the customer master data is complete and accurate. Duplicate customer records are consolidated into one customer master. Master data governance ensures that mailing addresses are valid, complete, and accurate.

Business processes that support mailings need to use master data to reduce the costs that are associated with mailing mistakes. Furthermore, when customers notify organizations of changes, such as a change of address, the business processes that support these changes must ensure that the new information is propagated to the applications and processes that need it.