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Implementing Hierarchies – Required Structure for Master Data

Building master data hierarchies will help your organization grow, partner more effectively, cut costs, and boost customer experience.

If you've already read the first installment of our Master Data Knowledge Series, you know the value that master data can bring to your business. Managing hierarchies is both one of the greatest benefits of master data, and one of the most difficult aspects to implement. Luckily, Dun & Bradstreet can help.

It takes time to design, institute, govern, and maintain a hierarchical structure, but the benefits your organization can reap are well worth the effort.
 

It takes time to design, institute, govern, and maintain a hierarchical structure, but the benefits your organization can reap are well worth the effort. Hierarchies clarify the relationships within companies in both a formal and traditional sense (majority ownership) and an abstract sense (companies that have relationships, but are not responsible for each other's debts). From these relationships, you can:

 

  • identify new potential prospects or partners
  • determine cross-sell and upsell opportunities with existing customers
  • help your supply and compliance teams understand the full impact of partnerships
  • look for savings when contracting with an enterprise for different goods or services
  • improve customer experience by serving consistently multiple branches of the same company

Hierarchies Address Master Data Requirements

As mentioned in previous Perspectives, two of the most important requirements of establishing your master data program are structure and coverage. Hierarchies help with both.

Structure

Structure includes everything from how to address keeping track of entities, to how to keep track of the relationships or linkages between entities. The Dun & Bradstreet D-U-N-S® Number can help you structure your master data for entities, while Dun & Bradstreet's hierarchies can help you discover relationships between entities and create custom views to achieve your goals.

Hierarchies show the relationship between different active business entities or specific sites within a corporate family. In Dun & Bradstreet's databases, these relationships are reflected in legal hierarchies, meaning that one company owns over 50% stock in the other. Also available are alternative hierarchies, or company relationships outside of majority ownership and where the entities do not have any legal obligation for each other's debt. More than 19.7 million active records in Dun & Bradstreet's global database are legally linked and over three million are alternatively linked. Your company can use these linkages as a base structure and/or to create its own hierarchies.

Coverage

A good hierarchical structure will have complete coverage and address both the breadth of relationships (i.e. include all related companies) and the depth (i.e. cover the subsidiaries, branches, and divisions of all companies in the family tree). So, if a branch has a subsidiary, its hierarchy will show both its parent company and subsidiary.

Gaining Value

Once you have utilized D&B hierarchies within your master data you immediately identify relationships between your important business relationships (e.g. customers, partner, suppliers) and can start to use that information to grow and protect your business in the ways identified above - and more. Taking things a step further, with the right partner you can even create custom hierarchy views to meet unique business needs.

To learn more about how to implement hierarchies in your own organization, download the whitepaper by our Master Data Distinguished Architect, Elizabeth Barrette: "Master Data: Implementing Dun & Bradstreet Hierarchies and Custom Hierarchy Views."

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