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by Striped Giraffe Team
2. November 2022
Time to read: 9 Minutes
Data Management

MDM: Let’s stop the data chaos

Master data management, or MDM for short, is considered the foundation of digital transformation. This gives master data management a very high significance that tends to increase rather than decrease, even in times of crisis. This is because it enables the consolidation and efficient preparation of all data – for a 360° view, which makes it indispensable for successful marketing, compliance, sales, and more.

The most important thing right at the start: When it comes to MDM, business and IT must be equally involved right from the start. From the business side, the goals must be precisely defined for each individual area. This applies, for example, to the creation of personal shopping experiences and legally relevant consent management, as well as to the acceleration of M&A synergies or the reduction of procurement costs by optimizing processes. On the IT side, all IT systems and data sources must be recorded and integrated.

It pays off not only in times of crisis

MDM centralizes, cleanses, and optimizes data from all systems. This creates a single source of truth. The complete data sets, the so-called “golden records,” can thus be routed to third-party systems and used optimally by them. MDM thus breaks down data silos without abolishing them and increases the quality of data for exchange between departments. Errors can be avoided where there are different data sets for a customer simply because, for example, the customer was in contact with the company via two different channels.

Perfectly prepared data is ideal for advanced analytics and business intelligence applications. Because they can only make precise forecasts for specific events on the basis of correct and complete data, thus enabling efficient use of the data. This is essential, especially in times of scarce resources. In addition, all AI solutions are fundamentally dependent on good data. This is because duplicate data or missing information can lead to considerable additional work and lower sales. Something that no one can afford, especially in these times.

MDM in e-commerce

Master data is consistent and uniform data within a company that allows trends to be identified and is thus specifically suitable for event forecasting. Especially relevant for e-commerce is consumer master data.

MDM consolidates all customer-related data from all sources and thus enables a 360° customer view. On this basis, personalized shopping experiences can be created across all channels in the course of customer centricity. Especially for the younger generations, the digital natives, an omni-channel experience is an absolute must these days. This also enables the creation of customized offers that are relevant for cross-selling as well as higher shopping cart sales. At the same time, margins can also be increased in a significant way. If you know your customers, you can also make customer service more efficient. Fewer inquiries are required and customers have a positive experience, which in turn decisively increases loyalty. It also considerably reduces customer acquisition costs.

MDM versus CDP and CRM

Many companies already use customer data platforms or CRM systems. This raises the question of whether these are not an alternative to MDM. In fact, they can be significantly optimized by an MDM.

CRM defines how companies interact with their customers by tracking and analyzing every touchpoint customers have with the company. Combine it all with artificial intelligence (AI), and manufacturers can market their products and brands accordingly, creating personalized experiences based on CRM data.

CDPs are primarily used by marketing and sales teams. They combine master data with frequently changing transactional data such as shopping habits and social media activity. Together with analytics and business intelligence, users get a clearer view of their customers’ behavior and how it is evolving in line with current trends.

Both systems depend on complete consolidated data sets of the right quality. In this respect, Master Data Management is the indispensable prerequisite for the optimal use of CDPs and CRM systems.


Centralized or decentralized MDM

When introducing MDM, the question arises as to whether the master data relating to customers, products, suppliers, finances, etc. should be centralized or decentralized. Both approaches have advantages.

A decentralized approach enables rapid reconciliation and linking of data in different source systems to support analytics initiatives. However, this may not best meet operational requirements for master data.

Most companies opt for a centralized approach. This allows them to focus on building a single data management platform, including defining and maintaining business rules. It is the most efficient way for organizations to drive the value of MDM for a wide range of business initiatives such as customer service, digital commerce, supply chain optimization, etc.

Implementation of MDM

There are quite a few pitfalls to consider when implementing MDM.


You should be aware up front of exactly what you want to achieve with the MDM application. Define measurable (sub) deliverables. Once that is determined, you should develop a roadmap with an overview of each initiative. As mentioned at the beginning, it is important to have input and participation from all the business units that are affected.


As a general rule, an iterative approach is recommended for the implementation. Start with a single domain and only a few data sources initially. The number of data sets should also be limited at first. It is best to focus on the use cases of one department first. Subsequently, the solution should then be expanded step by step.

In advance, it is important that the architecture for the onboarding MDM system is prepared and all interfaces are defined. It must be ensured that the technical know-how is available to the required extent. Ideally, a partner with relevant MDM experience should be involved.


As with all data management initiatives, MDM requires data governance. It creates a common understanding of data and policies among all stakeholders. This ensures user acceptance, which is critical to the success of this solution. In addition, data governance achieves the shortest possible time-to-market.

No industry restriction

MDM is becoming more and more popular in all industries. We already mentioned e-commerce above. In principle, MDM is recommended for all companies that work with large volumes of data.

This is especially true for B2C companies. More and more B2B companies are recognizing the advantages that direct customer contact offers. You get to know your customers better and can adjust offers accordingly. In addition, better margins can be achieved. Many pharmaceutical companies are currently planning the move to direct sales, for example by selling medications directly to chronic patients. Car manufacturers are also interested in direct customer contact away from their dealer landscape.

MDM also plays an important role in M&A. After all, all data from two or more companies is merged in the process. Only with the help of MDM will it be possible to consolidate this in a meaningful way and prepare it in such a way that it can be used efficiently by all departments.

Master data management also provides support in the area of compliance. This is because legal requirements must be met in all industries (e.g., KYC or DSGVO). However, this is only possible if the data records are complete and correct and all relevant people can access them. This can hardly be achieved without MDM.

We are here to help

In addition to implementation, we would be happy to discuss the strategic approach and the necessary processes specifically for your company in a personal meeting. Simply contact us at data@striped-giraffe.com or +49-89-416 126-660.

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