January 25th, 20232 | 5 min read
How your data can help you weather an economic storm
When faced with economic uncertainty, companies are put under increased pressure to cut costs and improve efficiencies in order to maximize profitability, sustain growth and survive. Leadership teams will evaluate their organizations and make decisions to help protect their business from the worst impacts of economic slowdown and recession. With companies battling to maintain their share of a shrinking market, the decisions they make could quite literally be the difference between survival and extinction.
With so much riding on the determinations that business and functional leaders make when the pressure is on, the need for clear, accurate, and reliable data has never been more acute. One way to achieve this is by implementing a Master Data Management (MDM) strategy. Master Data Management is the process of creating and maintaining a consistent and accurate set of key business data across an organization.
In a recession, this is even more important. Here are four good reasons why:
Customer insights and relationships
During a recession, it becomes even more crucial for companies to have a clear and accurate view of their customers. This can help them to identify new opportunities for sales and marketing, as well as to target their efforts more effectively. For example, for a food retailer, it would be very useful to know how luxury food offerings are performing against budget lines in particular regions, and whether specific offers are more or less popular with certain demographics.
MDM can be used to consolidate and manage customer data from various sources, such as CRM systems, marketing databases, and point-of-sale systems. This can help companies gain a more complete view of their customers, which can improve customer service, increase sales, and reduce marketing costs.
Product management and optimization
Product data management is another area where MDM can provide significant benefits. MDM can be used to manage product data across an organization, including product information, pricing, and inventory levels. This can help companies to improve the accuracy of their product information and reduce the costs associated with managing and maintaining product data. In a recession, understanding products and pricing is crucial to adjusting to market demands and identifying potential areas for cost-cutting.
Supply chain and logistics
Furthermore, MDM can also be used to manage data related to suppliers and logistics, such as supplier information, lead times, and inventory levels. This can help companies to improve their supply chain efficiency and reduce costs, which is especially important in a recession when budgets are tight. Many companies are faced with tough choices when it comes to how they manage their supply chains – especially as the pandemic proved that our “just-in-time” world is increasingly prone to crisis-fuelled disruptions. Ensuring that parts, goods and services are received in good time, while minimizing waste and maximizing profitability, is no mean feat and requires high levels of near real-time accuracy and insight.
Financial management and accounting
Finally, financial data management is another area where MDM can provide significant benefits. MDM can be used to manage financial data, such as financial statements, budget data, and accounting records. It can also help financial leaders to recognize the early signs of a recession, anticipate cash flow and prepare financing options if required. Smart financial forecasting is essential during good times and bad, as it allows financial leaders to plan cash and anticipate shortfalls, time spending to maximize profitability, measure progress toward goals, and set expectations for management teams and investors. None of this is possible without accurate, timely, and reliable data.
There’s nothing quite like an economic shock or slowdown to force the issue of precise business intelligence and insights. The value of these insights however is wholly dependent upon the quality of the insights feeding them. This is where MDM comes into its own, and why systems that are capable of supplying a reliable pipeline of data that is ready-for-insight are so crucial. Of course, it is always easier to make decisions when you’re not in the thick of it, which is why the most forward-looking organizations make it a priority to lay a solid data foundation before the economic storm hits.
By Tim Ward
Chief Executive Officer at CluedIn