Organizations are constantly looking for ways to generate more revenue, cut costs, and improve efficiencies. To that end, many are streamlining data management by using a master data management (MDM) strategy to provide a single, consistent view of business data across the enterprise. MDM removes disparate, duplicate,and conflicting information to simplify reporting and business intelligence and enable better business decisions.
Yet many organizations overlook a key area of data management complexity: reference data management. Whether you call them lookup values, reference code, code tables, or reference hierarchies, a strategic approach to managing these common code types is key to leveraging the true value of reference data. And although lookup tables that give users consistent values to choose when entering data such as dates, countries, gender, or industry into a database or application may appear to be simple, managing this information across a large enterprise can be deceptively complex.
A typical approach is to define and maintain reference data on an application-by-application basis. This approach brings a lot of inconsistency, as the data differs within each application. The result? Difficulty in aggregating data across different functions to get a complete picture of the health of the business.
With all this in mind, you can see how the right reference data management architecture can deliver big gains in efficiency, productivity, and reliability. Here are three key benefits that illustrate why it’s worth investing in good reference data management.
Reference data contains valuable insights for business users and data analysts alike—but that data must be accessible if it’s going to deliver any value. Business users need an intuitive, user-friendly interface so they can easily use reference data in the most meaningful way. Power users and business users should be empowered to define reference data models, manage the data within them, and govern ownership, all from within the same UI and without the need for IT services.
A user-friendly, self-service reference data management tool that provides a 360-degree version of the truth empowers business users to manage the complex lifecycle of reference data sets. It also allows business users to use the reference data while working on the data coming from different business functions. They can aggregate data quickly and get a better sense of the overall health of the business.
Companies, whether large or small, spend an enormous amount of time on internal and external compliance reporting efforts. While both types of reports need to be accurate, internal reports provide guidance for making confident, bottom-line decisions. In contrast, external reports for regulatory compliance do little to improve the bottom line but can cost millions—and risk the organization’s goodwill—if ignored. A holistic approach to reference data management results in accurate data interchange, publishing, and entitlements. Reference data management tools facilitate accurate internal and external reporting and reduce (if not outright eliminate) risk.
Organizations typically have many overlapping tasks across business functions. For example, marketing may be creating a quarterly pipeline forecast. At the same time, sales may be crunching data to find out conversion rates so they can forecast the revenue attainment for the quarter. If employees can automate the consumption of data from one source, they avoid the burden of manually reconciling data from different sources each time, by each department. This removes redundancies and minimizes costs.
By leveraging reference data management, companies can bring together all of their data efforts into one unified strategy that can be accessed by all relevant members across business functions. This approach will better support everyone, from frontline employees to executives, as they can simplify, automate, and reduce workloads, resulting in improved employee productivity.
Managing reference data across the enterprise can be harder than it seems. A comprehensive, cloud-based reference data management solution simplifies consolidation, management, and distribution of reference data. By leveraging artificial intelligence and machine learning to automate reference data management, organizations can empower business users to manage the complex lifecycle of reference data sets.
Let’s take a look at the importance of reference data in financial services and healthcare—two industries where proper reference data management is essential to delivering high-quality services and ensuring regulatory compliance.
Increased global regulatory pressure is making financial institutions realize the value of putting a data strategy in place. Some of the common reference data challenges financial institutions face include:
Reference data management enables financial services companies to centralize reference data codes. Large banks with operations in multiple countries can manage individual national code sets and reconcile the differences across countries. By intelligently managing reference data, financial services companies can facilitate the seamless flow of clean, consolidated, and accurate data throughout the enterprise so they can:
Healthcare organizations manage a huge variety of information while providing services to patients, doctors, hospitals, providers, and insurance companies. To facilitate a common understanding and communication across these entities, healthcare organizations use industry-standard codes such as ICD-9, ICD-10, Snomed, LOINC, RxNorm, DRG, and Chart of Accounts, as well as provider specialties, diagnosis descriptions, and medical terms.
Reference data standardization enables healthcare organizations to deliver high-quality services to patients and ensures correct billing and payment processing. Improved reference data management helps hospitals improve claims processing to:
Want to empower your business users, simplify governance and compliance, remove operational overhead, and accelerate time to value for data initiatives? Informatica MDM - Reference 360 can help you make reference data management part of your enterprise data strategy. Check out the data sheet and connect with me on Twitter @MDMGeek if you would like to continue the discussion.