Finance Can Lead the Charge to Creating a Single Source of Data Truth
As data-inspired businesses undergo a large-scale digital transformation, they look to Master Data to bring order to the data chaos, find new ways to engage with customers, and build meaningful business relationships. No matter what department you sit in, you have surely experienced the various data challenges such as duplicate systems, the issue of enabling workflows, and determining if your data is accurate. And if your company has been through a merger or acquisition, the probability increases that you will find different information across your disparate systems about a given company with which you do business.
Having inaccurate or duplicate records is not just an inconvenience or hassle, it can affect your overall decision-making and cause you to miss out on important opportunities. For example, you could have a customer–vendor relationship with two entities of the same company. If you don’t determine that they reside in the same company, you’re failing to grasp the nature and extent of your relationship with that company. Consequently, you might make detrimental decisions or otherwise the entities differently than you would’ve had you recognized they’re in the same organization. In addition, any sort of “roll up reporting” around the number of customers or suppliers that you have will be inaccurate if you do not have a thorough grasp of your business connections.
Master Data in the Financial Realm
Enter Master Data, the foundational content that helps you structure your information to establish interoperability between your various systems and prevent costly errors caused by duplicates or inaccurate data. The accuracy and unity provided by Master Data and data governance initiatives have quickly become key to the success of the financial realm, and this is growing clearer by the day. The main reason for this can be linked to finance’s rapid change from the role of a reporting organization to that of company leader. Generally, the finance department has the most information on the various departments across the organization. In fact, in most instances, finance rightfully maintains its position as the true “hub” of the business and works hard to ensure data integrity. Accordingly, an efficient finance organization knows what to do with relevant data to drive results (as opposed to just reporting on them) and has rigorous process related to financial data management.
But finance cannot become the information hub of an organization without the creation and prescribed use of a master record backed by the highest levels of management. In our experience, the CFO’s office often leads the charge to create a single source of data truth. The finance department understands, for example, that when determining what payment terms to extend to a customer, you must link consistent information between your billing system, credit decisioning tool, and CRM.
Master Data is truly a business imperative. It can bring technical and business benefits such as:
- Integration of disparate data sources
- A common data standard
- A 360-degree view of business relationships
- Revenue growth
- Reduced risk exposure
- Deeper visibility into supply chain, for efficiency and compliance
- More effective sales and marketing
- Brand protection, by identifying potential for fraud and risk
Master Data solves the data challenges that can hinder finance departments from being true data leaders in their organizations. To learn more about how D&B’s Master Data can play a key role in the success of your finance department, check out a recent webinar that I conducted with my colleague – and someone who has direct experience leveraging the benefits of Master Data – Andrew Fine.
Titled “Set the Pace for Enterprise Success With Master Data,” this presentation explores a case study to illustrate how finance departments can help lead an organization down a path to success by putting a Master Data strategy in place at the department and even at enterprise level.