The value of customer master data

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Those of you responsible for customer master data management will be well aware that there is a data revolution underway in business. This revolution is being fueled by a number of factors.

Data Privacy seemed to be “the thing” that would upend carefully curated rich customer master data repositories in favour of the bare minimum of data. The global COVID-19 pandemic added another twist as we witnessed the explosion of home delivery and online shopping activity as consumers trapped at home, resorted to eCommerce sites, virtual grocery carts and fast food portals to get their nutritional and retail fixes.

What was likely not anticipated, was that we would see quite the volume of new activity that would grow our master data repositories. All that data has some value, but we know that not all the data has the same value.

The data explosion brings with it, headaches of compliance and minimizing the risk associated with data. Data managers are being asked to critically assess the value of the data they have. How exactly do you do that though?

One school of thought is that you need to look at who uses which data.

Understanding where data is used and who uses it and what they use it for is no mean feat. New technologies like data virtualization technologies, cloud storage systems and SaaS have done a pretty good job of democratizing access to data but have they made it more trustworthy, current and relevant? There are still an awful lot of spreadsheets out there. you’ll want to reign in the use of spreadsheets for maintaining customer data for a host of reasons not least of them being compliance.

Is data really valuable?

It has been said that “Data is the new oil” a deceptively simple mantra for our modern world. “Whether in The New York Times, The Economist, or WIRED, the wildcatting nature of oil exploration, plus the extractive exploitation of a trapped asset, seems like an apt metaphor for the boom in monetized data.” per Antonio Garcia Martinez.

Jeroen van Zeeland says the “analogy turned meme turned dogma is persistent and flawed“, whichever it is,k oil or water, the reality is that untapped it may have no value; tapped it may be a form of lifeblood for any number of business initiatives or ventures.

One thing that we can be sure of, is that there needs to be a methodical assessment of the data that a business has at hand and the value that might be ascribed in terms of actual and potential yield.

Working out the value

Four pillars of activity need to be undertaken within the business and among data managers, in particular, to get the data the kind of profile that will have it accorded some appropriate value. The first of these is around the classic accounting approach to defining assets and liabilities.

Some would argue for data being considered a liability but let’s put that aside for one moment and consider how you might appoint your data as an asset.

An asset is defined as something owned or controlled, with an intrinsic monetary value that can be sold or exchanged for cash. Consider a Facebook, a Google or a Microsoft. Whatever data they have about consumers or persons of interest that they can monetize through trade, is effectively an asset for them. Strictly speaking then, data, and particularly customer or consumer data, aligns with the definition of an asset. If you don’t sell it or don’t use it, does it still intrinsically hold any value?

Unlike traditional assets, like gold, land or buildings, customer data, if simply left to lie, will deteriorate over time and eventually will be arguably worthless unlike undiscovered diamonds and minerals in the ground – in fact, the storage and maintenance of it may even be deemed a cost. So the important thing is to know what data you have and to leverage it.

Even gold, land and buildings, as assets need some degree of maintenance. Gold needs to be stored and inventoried, and probably inspected on occasion to make sure that sticky fingers don’t walk off with any of it. Land needs to have the taxes paid and needs to be kept in accordance with local laws, which may mean it needs to be fenced or the grass cut and of course, buildings need almost continuous maintenance work to avoid them falling into disrepair. These assets are managed with policy, standards, processes and procedures. You need to do exactly the same with the data, especially the customer data.

If the business’ attitude to the data is that it is just a headache and holding onto it is a risk because it might get leaked or inadvertently fall into the hands of bad players then you’re quite possibly not considering how you might use that data. If you choose not to store a regular customer’s details then you don’t provide your marketing and sales teams with the ability to reach out to the customer with details of the latest offering your business has. This in turn diminishes the potential for customer loyalty and augmented customer lifetime value.

Within the Pretectum CMDM we hope to make it easier for any business to securely and appropriately manage the authoritative customer master data records in a straightforward and comprehensive way. We do believe that the customer master in particular can be one of your most valuable assets. Contact us to find out how.

Comprehensive and Correct Customer Data

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“Getting started is the key to moving ahead. Breaking down big, intimidating jobs into tiny, achievable tasks and starting with the first one is the key to getting started.”

This quote’s source is unknown, however, humorist Mark Twain is often credited with coining the phrase.

It’s sound advice for companies facing the daunting task of complying with new lease accounting requirements IFRS 16 and ASC 842.

Collecting and combining lease data is the first stage in the process. This step’s manageability is determined by how well you and your team are prepared, as well as the resources you have in place to assist you.

New regulations

The first—and, in many ways, most important—step in the lease lifecycle is data collection. You may be aware of how difficult and time-consuming the procedure may be from personal experience.

Identification of assets; ownership rights; purchase possibilities; lease terms; payment method; residual values. These are just a few of the many pieces of information required to plan and report on lease data correctly. The new IFRS 16 and ASC 842 data collecting rules add more demands to the task.

The data scope under the new lease accounting rules has been altered for two key reasons:

Contracts with Embedded Leases – An embedded lease is a type of lease that is included in some contracts. This section of a contract identifies and controls the assets that are employed.

Contracts that were previously not accounted for as leases may now fulfil the revised lease definition and are required to be reported on balance sheets beginning in 2019.

Data on Assets – The addition of asset data on balance sheets is perhaps the most significant shift under the new standards. Organizations with operating leases could estimate lease commitments to meet reporting requirements. Not any longer. Individual assets are tracked for capitalization and amortization purposes under the new requirements.

Understanding the Need for Data

Your lease data collection and organization may seem a daunting task. First, you must determine the type of data that needs to be collected. An increase in accounting requirements can provide organizations with the opportunity to consolidate all of their data into one central system.

Data Consolidation and its Benefits,

  • Streamlining accounting processes reduces operating costs
  • Information collected and recorded uniformly provides more reliable data
  • Access to all your assets in one place

Don’t expect your data to be consolidated overnight. A significant effort may be required. Although it requires a little more work upfront, the streamlined process and future cost savings make up one or two extra steps. There is no need for you to do it alone.

Supporting Technology using Acquired Data

It may seem overwhelming to consolidate data, but it consists of three tasks:

  • Obtaining the lease documents
  • Gathering the appropriate information
  • Making sure the data is accurate

Simple enough, right? There is a high possibility of error with data collected from dozens, hundreds, or thousands of lease agreements. Moreover, the deadline is rapidly approaching for organizations to comply with the new IFRS 16 and ASC 842 regulations, which leaves virtually no room for error.

Final Thoughts

Technology plays a big part in all of this. Organizing important lease accounting data in one central location is now possible with new lease accounting solutions. Lease information can now be gathered and audited without having to dig through multiple spreadsheets.

Such solutions also guarantee that your data is accurate, so you can have a good start to your lease accounting process by centralizing your data in a lease accounting system.

But that’s just the working documents to report on tenancies and leases. What about the master data? The details of the lessees and their PII? If you’re dealing with regular consumers, you need to store and maintain their contact data. The data that you store and maintain needs to be in the best possible shape. Often a specialized system and a spreadsheet, in particular, don’t have all the necessary controls and hooks to ensure that the data is in the best possible shape.

This is where we believe that you can leverage the Pretectum Customer Master Data Management advantage. Pretectum CMDM’s modern cloud-based platform enables you to create a single source of truth regarding all your leaseholders. Further, if you choose to pin the lease identifiers to the leaseholder master, that’s your choice. When you define your leaseholder master record, Pretectum lets you decide just how much data you store centrally and more importantly, it allows you to decide who you share it with and how.

Contact us today and find out how you can drive your Customer Master Data Management to new heights with the Pretectum CMDM

Harnessing Customer Data to Boost Monetization

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Businesses across the world are looking at future prospects of customer data to harness consumer preferences to boost sales. This will not only help individual businesses but large and small corporate houses as well.

This trend seems to be catching on fast! This is a positive move toward helping burgeoning economies in third-world nations boost their overall economic progress.

Let’s analyze how customer data management (CDM) will affect people from a business perspective and how being armed with the right laws, rules and regulations we can ensure overall growth, prosperity and harmony for both business owners and consumers.

How do businesses collect data?

The “Customer is King” and “customer satisfaction”, are mottos often used by large and small organizations. They collect, analyze, organize, report and share their data within business units and perhaps even with other organizations. This data is systematically maintained by accessible and cost-effective software, often stored in on-premise systems and “in the cloud”.

For big or small retail businesses to thrive, customer satisfaction must be their prime modus operandi. In order for this to occur, customer data must be obtained, reviewed, refined and verified or validated by the organization.

To understand the mental and psychological behaviours of the customer, and how they choose, buy and spend on goods and services of their choice the data under study has to be considered relative to where it comes from.

Enterprises have many mechanisms by which they collect data from customers. The varied sources may include the customer’s IP address and even device IDs.

Another way of harvesting data is through day-to-day engagements with customers and prospects on business websites and social media websites such as Facebook, LinkedIn, Instagram and many more.

The third type of data collection is through the movement of the ‘mouse’ or cursor on the computer screen. E-commerce sites such as Amazon, Flipkart, Myntra and much more use this method to gather insights. This may throw light on purchase histories and preferences.

Lastly, behavioural data such as actual purchases may be gathered and aggregated and sorted, to give valuable insight and information on consumer metrics such as retail purchasing and product satisfaction.

Effective use of customer data to boost monetization

Companies that capitalize on the data that they have can also profit from it. Data brokers harvest bulk data of consumers from e-commerce companies.

Data brokers then use that customer data to process the most important information required by banks, financial institutions and insurance companies to verify customer background and credit history. This helps them to sanction loans more easily.

This channel presents itself as data management companies, that generate their own cash flow from reselling the aggregated insights that they have regarding customer activity.

Advertising and marketing companies may use customer data to improve website functionality by creating customized promotions and special offers on products and services uniquely designed for individuals.

Such companies capitalize on their marketing competencies and behavioural intelligence derived from years of experience in handling and understanding customer behaviour, sentiments, needs and trends.

Staying compliant

According to Max Freedman, Contributing Writer at the Business News Daily, “So much consumer data has been captured and analyzed that governments are crafting strict data and consumer privacy regulations designed to give individuals a modicum of control over how their data is used.

The European Union’s General Data Protection Requirements (GDPR) lays out the rules of data capture, storage, usage, and sharing for companies, and GDPR regulation and compliance doesn’t just matter for European countries – it’s a law applicable to any business that targets or collects the personal data of EU citizens. Companies that ignore GDPR compliance and fail to abide by their legal obligation to uphold consumer privacy may face fines of up to 20 million euros or up to 4% of annual revenue, whichever is higher. Business News Daily

Data privacy has made it to the U.S. in the form of the California Consumer Privacy Act (CCPA). The CCPA is, in some ways, similar to Europe’s GDPR but differs in that it requires consumers to opt out of data collection rather than putting the onus on service providers to make sure that consumers “opt-in” or give their consent to data collection and use.

Privacy Acts in the US also require the individual states to develop applicable data law rather than a company’s internal decision-maker.

Doubtless, data collection by businesses is here to stay. However, as more and more consumers demand their privacy rights be protected, businesses will need to accept that will need to adopt new regulations and laws to clear the miasma surrounding their customer data management.

Customer Data Management (CDM) is a potentially powerful tool for businesses. It can be an added advantage to monetize customer data and protect customer accounts.

This valuable information and all the associated privacy considerations need to be well thought out to avoid data mismanagement. Businesses will need to think through their data handling ethic, their business practices and data management policies while avoiding falling foul of any legal requirements.

As consumers, we should be able to look forward to a world where the ethical and legal use of our data ushers in a new era of positive progress and prosperity across the globe.

SR

Pretectum’s cloud-based Customer Master Data Management platform is designed with policy and regulatory compliance and suitable data governance and control in mind. Curated, accurate and appropriate customer master data support business in the best possible customer interactions. To find out more contact us.