Businesses are always looking for new opportunities to increase revenue, reduce costs, and improve workplace efficiencies. Having a master data management (MDM) strategy in place provides a centralized, consistent view of data across business functions. MDM simplifies reporting and business intelligence by eliminating disparate, duplicate, and inaccurate information.
An essential component of MDM is reference data management (RDM). Managing common code types such as lookup values, reference codes, or reference hierarchies is the best way to leverage the true value of reference data. Successful RDM performs analytics, tracks changes, and distributes reference data based on set policies, frameworks, and governance standards for managing internal and external reference data.
Using the right reference data management software gives business users the processes and technologies essential for successful RDM. A software solution provides the governance, processes, securities, and audit controls necessary for mastering reference data. Most RDM systems use a service-oriented architecture (SOA) service layer to provide connectivity for sharing reference data with applications, analytics, and governance applications.
Reference data management, when done successfully, helps with business scalability and analytics processes that aid in data-based decision making.
How is reference data management useful?
Empowers Business Users
Reference data is full of valuable insights that give business users a true sense of the health of the business. User-intuitive, self-service RDM tools empower business users to define reference data models, manage data, and govern ownership. When users can manage the lifecycle of reference data sets they can aggregate data in real-time based on a single source of truth for an accurate view of the business.
Simplifies Compliance and Reduces Risk
Internal and external compliance reporting is time-consuming and costly. Internal reports guide bottom-line decisions while external reports for regulatory compliance are expensive and don’t help improve the bottom line. Taking a holistic approach to RDM simplifies compliance and reduces risk by providing accurate data interchange, publishing, and entitlements.
Removes Operational Overhead and Reduces Costs
RDM eliminates overlapping tasks across business functions by automating employee consumption of data from a centralized hub. Leveraging accurate reference data removes redundancies, reduces workloads, improves workplace efficiencies, and reduces operational costs.
Real-life examples of reference data in action.
Managing reference data is not without complexities. Utilizing a comprehensive cloud-based RDM system simplifies the process of consolidating, managing, and distributing reference data. RDM management through AI and ML automation empowers business users to manage the lifecycle of reference data sets.
RDM in Financial Services
Financial industries are facing increased global regulatory pressures that can be eased with a comprehensive reference data management strategy. Financial institutions are constantly challenged by increases in asset classes, new securities, managing multiple security masters, and the widespread use of different identifiers.
RDM allows financial industries to centralize reference data codes, such as national code sets, and reconcile differences across regions. Financial industries can initiate the flow of clean, accurate, and consolidated data throughout the organization. This in turn allows them to streamline the value chain, efficiently manage risk, improve customer loyalty, and support corporate governance.
RDM in Healthcare
Healthcare industries are responsible for a massive amount of sensitive information related to providing services to patients, doctors, hospitals, providers, and insurance companies. Healthcare services use industry-standard codes, provider specialties, diagnosis descriptions, and medical terms to communicate across services. RDM ensures correct billing and payment processing and improves claims processing. This in turn enhances the patient experience, ensures optimal reimbursement, improves reporting for research and clinical trials, and reduces operational overhead and costs.
RDM in E-Commerce
E-commerce businesses rely on complete, accurate databases to store, analyze, and manage information regarding products, sales, and customers. An accurate snapshot of transaction data such as product searches, information requests, and product purchases helps e-commerce businesses get a clear view of product preferences, purchase history, and buying potential.
RDM helps e-commerce businesses tailor personalized promotional offers based on customer preferences. Users can also customize prices for larger business customers so that they receive accurate pricing or built-in discounts set for their profiles. RDM gives real-time insights into the effectiveness of marketing campaigns and product offerings.
E-commerce businesses can compare pre and post-sale figures to target successful marketing campaigns. Lastly, RDM effectively stores updated information about products such as descriptions and specifications, reference numbers, prices, promo offers, and availability. Such information allows e-commerce businesses to efficiently and cost-effectively manage inventory.
Reference data is essential to business scalability and analytics processes that are influential in data-based decision making. RDM strategies are essential for successful master data management strategies across all industries.