The drivers for a master data management program are often external regulations. The recent most prominent was and is GDPR. However, also the company-internal desire for improved data quality and a central, reliable and up-to-date view on the own data and information, can be a starting point for an MDM program.
At a higher level, these programs are called "Data Governance". They are the strategic driving force for the introduction of MDM technology, which is needed as technological support to achieve the strategic goal. Data Governance takes Data Quality and the organization into consideration.
In addition to the regulatory reasons in favor of MDM, there are three pillars under which all reasons for an MDM can be subsumed.
Pillar 1 - Value creation - Earn more money
Without an MDM program, there is most likely too much data, no logical integration of data and thus the missing of important insights or even no self-service in dealing with data (for example, individually and efficiently preparable analyses of required questions) that prevents companies from increasing their own sales. With the introduction of MDM, you will create a single source of truth for information, that helps to make sure, you can trust the insights you'll generate out of it. At the end, giving employees and decision makers better data, also helps to generate more value, which at the end results in more revenue.
Pillar 2 - Operational efficiency - Save costs
Data is most often created and managed in different applications. In the vast majority of cases, these applications are not integrated, thus they contain different information and statuses. These data quality problems (mostly in the form of duplicates), caused by redundancies due to the silo storage of information, prevent efficient collaboration between departments as well as across companies. This also prevents new business models that depend on the automated processing of information from different departments.
Pillar 3 - Risk management - Minimize risk
The above-mentioned regulations make it mandatory that responsibilities in the handling of data in companies are clearly governed. A further advantage of this clearly structured responsibility is that confidence in the data continues to increase due to the awareness that someone is responsible for the data. This increases the degree to which applications are used.