Tag: Gartner

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Cloud vs On-Premise Customer MDM

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There’s nothing particularly exotic about cloud-based applications and this is also true of master data management solutions in the cloud. The growth of a multitude of cloud services, cloud data, and cloud usage continues unabated. As long as good internet connectivity infrastructure is available there will be continued support for cloud-based systems.

More and more organizations are adopting cloud computing infrastructure to afford greater business agility and get access to the best available technology of the time. The adoption of cloud infrastructure not only holds the promise of improved business efficiency but also the benefits of improved economic value and ROI.

In most cases, cloud solutions are of good architecture, unencumbered by legacy technology problems and present themselves as having a lower cost of ownership.

Businesses have been slow on the uptake of cloud-based MDM though Gartner estimates that only 6% of all the companies that they talk to have cloud-based MDM solutions in use.

Cloud-based Customer MDM presents itself in the shape of software as a service (SaaS). This means that organizations do not incur the cost of the hardware and software associated with it and have no application or hardware maintenance to pay. The organization and financial cost of provisioning on-premise and captive hardware is sometimes prohibitive enough for organizations to effectively ditch capital expenditure on a system and instead invest capital budgets elsewhere in the business and instead choose a pay-as-you-go model which SaaS will support.

Avoiding betting on the farm

SaaS offers subscription-based licensing as a model based on cloud provisioning of solutions to help organizations flatten IT spending and push the running costs for solutions to an operational expenditure model. One of the big benefits then, of SaaS, is low or no capital outlays accompanied by increased operational agility.

As demands for a SaaS solution grow, the technology allows almost limitless expansion in response. For organizations just starting on a customer MDM journey, this can be reassuring as they evolve a better understanding of what they ultimately need without having to bet the proverbial farm on the project. If after the subscription period matures, the business doesn’t see value in continuing, then the business can pivot and choose another direction.

Choosing a cloud solution, not only provides these CAPEX vs OPEX benefits and lower risk, they also support the business in being able to focus its energies on its core strength and actually identify cross-organizational synergies and competencies, particular i the business is transnational or global in nature. Many organizations prefer investment and focus on their core business activities and services and view process-bound systems like MDM as not being a distraction. Though this view can often be challenged as a narrow one, it does give the business the ability to put more effort into what they want to achieve and concentrate less energy on how the technology works. An outcomes-based approach to systems, solutions and customer master data management, in particular, is actually a sound approach and one that every organization should consider as a priority.

The cases for and against the cloud

One of the reasons Gartner’s observation of 6% of adoption may be so low, could be tied to the fact that there remains some anxiety around the security of cloud-based systems and a reluctance to store sensitive proprietary data outside the company’s firewall.

This argument though is not a balanced one. Just as businesses choose to run payroll to bank accounts rather than cash in pay packets and just as we store the majority of our fiat currency in bank accounts rather than tucked under our mattress or in a private safe at home, cloud-based systems are often even more secure than those deployed on-premise.

Platforms like the Amazon Web Services (AWS), Microsoft Azure and the Google Cloud Platform are deployed with the best resources available and a high degree of automation and monitoring. Security is a top priority for these infrastructure providers in order to provide top-tier companies and organizations across the globe, with the right level of secure and robust computing to meet their diverse needs. Data hacking is regrettably a continuous threat but since the mid-2010s on-premise system attacks due to inadequate software maintenance and control regimens have highly outnumbered the incidents of cloud attacks. The cloud attacks themselves have had nothing to do with cloud security vulnerabilities.

Almost all the most recent data breaches have been the result of human mistakes which neither on-premise nor cloud infrastructure protects one from. In the assessment of a cloud provider though, there should be a degree of diligence undertaken to ensure that the cloud provider solution is certified secure and data protection compliant. SaaS providers take security very seriously and are willing to go the extra mile to ensure customer data protection.

On-premise deployment of MDM requires more than just an operational budget since there is generally an expectation that the system will be in use for several years and needs to be depreciated over time. Customer MDM solutions like the Pretectum CMDM elastically scale according to processing, storage and software usage and licensing. Additional resources in the SaaS application are easily provisioned.

Numerous customer relationship management (CRM), Enterprise resource planning (ERP), customer data platforms (CDP) and marketing automation (MA) solutions are cloud-based. Most notably Salesforce CRM and NetSuite ERP are exclusively available as cloud solutions.

Despite the need for a customer master data management solution to connect to many other systems using point-to-point integration, this in itself should be viewed as hugely advantageous as an opportunity for the organization to think seriously about centralized integration – a governed data integration layer for cloud integrations. Using a piecemeal approach involving handcrafted integrations is good for organizations of all sizes, particularly those with a complex operational system landscape. The challenges with integrations are a deployment agnostic one and something that one needs to deal with, for both on-premise, cloud and hybrid environments.

Cloud-based SaaS applications like the Pretectum CMDM deliver new functionality on an almost continuous basis and for major changes, you can decide when to upgrade and avail your business of new functionality. Upgrades are seamless and generally invisible to clients until they are actually completed. Legacy versions are typically only supported for a limited time after the general availability of new functionality and enhancements to reduce the costs of operations support. Your organization should therefore be prepared to move with upgrades as they become available to ensure that you are making use of the newest version of your customer MDM. Updated technology or newer infrastructure is available for use via the cloud in a completely transparent way.

In considering a cloud provider, remember that not all cloud providers offer cloud hosting outside the US. This is important when considering Customer MDM, particularly in the context of Europe’s General Data Protection Regulation (GDPR). Also, consider that US safe harbour agreements are problematic with the storage and transferral of EU citizen data outside Europe. If you are using on-premise systems that contain Personally Identifiable Information (PII) data then you may need to always store that data on-premise in the country of origin, this may represent an IT burden to your organization.

Country-specific data residency requirements may influence your selection choices. Pretectum CMDM makes use of the EU-US privacy shield framework.

A holistic assessment of the drivers and inhibitors for your customer MDM will help you to decide if a cloud-based customer master data management system like Pretectum CMDM meets your organization’s long-term business goals and objectives.

Defaulting to on-premise is not necessarily low-risk and certainly not necessarily more cost-effective. Consider Gartner’s Five factors for planning Cloud-Enables MDM report or reach out to us and find out more about the Pretectum CMDM advantage.

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Customer Master Data Management is more than just Data Quality

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Planning on building a marketing campaign? Great! Apart from all the steps you have to go through in terms of working out what will make up the campaign and the message and artefacts that will be delivered as a part of the campaign, you will have to work out who you’re going to target as customers or prospects and that in itself is no easy feat to accomplish.

Your Customer Data Platform (CDP), Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) or Marketing Automation (MA) systems, likely have a lot of data in them. Not all of it will be master data, some of it will be transactional but you likely want to focus on the most up-to-date and most accurate customer lists that you have. If you don’t have a consistent way of harvesting that data and building those lists then you’re likely going to struggle despite all the systems and tools at your disposal.

For the full potential of the campaign to be harnessed, you must not only gather up the but you need to also provide ensure that the data is the most meaningful. That means that the data needs to be of the best possible quality. It is likely that you have pools of issues related to data quality in all of these systems even if you have recently implemented them or migrated to them.

Specialised systems like ERP and CRM have been around for a long time, CDPs are relative newcomers and as for MA, you could be using a variety of technologies to execute marketing automation. As these systems age, so does the data. If you have lax data controls and different data governance guidelines for different systems, standardization and duplication of the data become a challenge too. These issues evolve into large-scale and complex ones as the organization grows.

With these data silos, quick information retrieval from any touch-point of the organization is difficult. Without centralized and integrated management of the data, data fragmentation, duplication, and inaccuracy will be a commonplace occurrence. When the customer data is updated in one system but the same data is not immediately reflected across the other systems, data inconsistencies will emerge and these are felt in downstream systems fed from these sources.

Business decisions like that marketing campaign, require a data-centric approach with conclusions drawn through data analysis rather than best efforts, gut instincts and intuition. Decision-making needs secure and consistent access on-demand, to the most up-to-date information from anywhere, it is needed.

Without access to trusted consistent data, basic questions such as “Is this customer in region x or of the right age or a recent customer?” can be difficult to answer.

A lack of consistent, accurate and deduplicated customer data will paralyze the responsiveness of business decision making and potentially even lead to compliance issues

Poor quality with missing values, data inconsistency or duplicates impairs your business’s ability to make other intelligence-based decisions. Forecasting, planning, support, service, billing and logistics rely a great deal on algorithms, without the right data, the decisions that they will take or recommendations that they make will be flawed.

“A technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise’s official shared master data assets.” – Gartner

At Pretectum we believe that a comprehensive strategic approach to customer master data management is essential in providing a single consistent view of the customer master to the business. We see this as possible with the Pretectum CMDM.

Reach out to us and let’s have a discussion around your business needs and expectations.

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The customer master data management treasure trove

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You’ll hear not just here, but elsewhere too. customer data is one of the most valuable assets for a company. The reason is for the insights and indicators that customer data brings.

Companies that use customer insights have been reported by McKinsey, to outperform competitors by as much as 85%.

Gartner defines master data management (MDM) as a “technology-enabled discipline in which business and IT work together to ensure the accuracy, consistency, accountability and stewardship of the enterprise’s official shared master data assets”.

When used to the best effect, customer data informs a business’ upsell strategies and drives more targeted marketing.

Businesses embarking on digital transformation, rely on quality customer data and spend a lot of time, energy and money ensuring the accuracy and usability of the customer master. One way to increase the value of customer data is through Customer Master Data Management.

With Customer MDM, you’re seeking to use a unified, accurate, and persistent identifier for customers as well as other attributes that describe them. That MDM can drive business outcomes when used with analytical and operational systems.

MDM is a business practice but it can also be a technology – a new data processing system like the Pretectum SaaS CMDM. Customer Data Platforms on the other hand (CDP) are a form of packaged software that focuses on customer-relevant data – this may include transaction and master data but most often, the CDP is targeted at marketers and marketing departments.

It’s important for brands to provide personalized content to customers but how is that best done? Customer data, attributes such as how long a customer has spent on your website or their preferences or where they live can provide important knowledge to optimize marketing and sales efforts and that same data in the CDP could be coming from the CMDM so that it is consistent across all systems.

Personalization at the core of the MDM Schema

MDM as a practice benefits all sizes of organizations and MDM solutions have general business benefits too, they’re not focused exclusively on one function or group.

Research suggests that personalization programs, when deployed at scale, can improve sales and marketing drastically. Personalization at scale helps businesses to connect with their customers in meaningful ways but to achieve this, you need to have the data and the MDM is the best place to store and maintain those essential data nuggets.

Master Data Management platforms and Customer Data Platforms both exist to create that pipeline of accurate, reliable customer information. Unlike a CDP the MDM solution is mainly used by the business to drive more general operational effectiveness and efficiency and customer experience whereas the CDP is mainly used to target messaging and personalization for the individual or households at the campaign level.

Customer data mastering has some important attributes. Firstly, mastery is achieved by consistently matching and integrating customer data from different enterprise sources. This is done by tying together customer records spread through the different systems and then combining them into a unified cluster of related records that provides a 360-degree customer data profile.

The concept of “knowing your customer” (KYC) is only achieved if you actually have an understanding of all the attributes that make up that customer. That means you have to have a consolidated view of that customer (or prospect) based on all the different ways that they have engaged with your business.

This encompasses in-store purchasing, online purchasing, service, support and finance. Companies can only use customer knowledge to create successful business relationships if that unified understanding of the customer then translates into a better customer experience (CX).

Customer data can also help provide input for the business roadmap and help to build capabilities and product offerings for shoppers in the future. Customer insight through customer master data is essential for businesses to understand how the ideal customer thinks and acts. Through optimized MDM, organizations now have the ability to understand what drives their customers via customer data, rather than relying on guesswork.

Errors in customer data can create problems in all areas of the business. Incorrect customer deliveries are perhaps less likely these days but using old customer data or data that is not optimized can create inefficiencies in other areas like marketing outreach.

An example of the summary data describing data quality

Resolving and fixing mistakes, in particular, is expensive, the later in the data management process that they are detected the more difficult and more effort is required to remediate so identifying and intercepting problems sooner rather than later is a more economical approach.

Sales teams spend a good amount of time interacting with customer data and are likely to identify problem data but do they actually do anything about it? The chances are no, they don’t necessarily see it as part of their remit, further, if there is a bureaucratic process associated with data correction or risk and compliance measures that block them from doing those corrections then they are even less likely to be resolved.

You want to move your business from engaging in less time correcting errors and more time working on business expansion efforts like lead generation and lead follow-up. Inaccurate data will slow down lead conversion because marketing, sales, service and support representatives are potentially using outdated or erroneous information.

Key sources of customer data are ERPs, CRMs, marketing automation platforms, and customer data platforms but they are often siloed and focused on very specific business missions that don’t have a unified view of the customer as an overarching objective.

Persistent IDs that you’ll find in a customer master data management system like Pretectum’s CMDM ultimately help connect those disparate customer records and make it easier to see the customer in a single record. Customers with the same information will be related to another thereby ensuring your associates have an accurate and consistent understanding of all the data attributes of the customer.

Deduplication, spotting wrong or duplicate records ensures that the same underlying customer is converged upon, this can be done using AI data aggregation or manually but at scale automation is the best way to do this effectively. Analytics and reporting improve as a result of this information optimization and changes are can be quickly effected.

Data mastering is difficult to scale with traditional manual and rule-based methods, often there is a lot of manual input – this is potentially costly and complicated when dealing with a large volume of data. Pretectum’s CMDM solves this through integration and bulk append and replacement capabilities.

Customer data management is crucial to long-term customer relationship management and needs to be handled in a way that ensures the organization is complying with local, regional and international regulations. The data management process touches more than just marketing and sales because it also includes financial, legal and perhaps even IT teams. All need to be able to work together to ensure the approach to customer data quality is appropriate, fair and compliant.

Customer data management through the use of CMDM helps businesses grow their customer base in a responsible and appropriate way in support of marketing, sales, support and service initiatives. Managing and using customer data appropriately helps increase profitability, business growth, and ROI.

A CMDM becomes the hub that connects your different customer data sources and provides a centralized customer information analysis point to serve better customer-company relationships. The Pretectum CMDM provides data management dashboards and real-time analysis, which can make for more improved real-time interaction management decisions.

Pretectum’s customer MDM platform is not a replacement for your ERP, CRM, CDP, or DMP but rather a complementary tool that is especially helpful for integration. Your customer Master Data Management Strategies with the Pretectum CMDM can also cover a wide array of data types and approaches to customer master data management with a lot of options that can be mandatory or optional according to your business needs.

Consider the Pretectum CMDM for identity management or golden record creation, market segmentation, customer classification or simply to drive compliance and operational efficiency.