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According to the EY MENA M&A Insights 12 M 2023 report, the Middle East and Northern Africa (the MENA region) witnessed a steady M&A market with total deal value for 2023 reaching US$86 billion, indicating a 4% increase on the previous year. The GCC region accounted for the majority of deals at 565, valued at US$83.2 billion, with the UAE and Saudi Arabia being the preferred destinations for investors.

All these findings show that MENA businesses keep evolving and expanding despite rising interest rates, persistent inflation and economic uncertainty. The EY analysts expect M&A activity in MENA to remain robust in 2024 as well.

Apart from financial impacts, business expansion brings on a list of complexities, such as an expanding client base, product portfolio diversification, immediate organizational shifts, etc. It is during these transformative times that establishing, reorganizing or enhancing Master Data Management (MDM) systems becomes pivotal. Let us explain why.

What is MDM?

Gartner describes master data as the consistent and uniform set of identifiers and extended attributes that describes the core entities of the enterprise including customers, prospects, citizens, suppliers, sites, hierarchies and charts of accounts.

In its turn, Master Data Management (MDM) is a method of managing the organization's core data. It involves creating a single, accurate and authoritative source of truth for a company’s essential information, such as data about customers, products, employees, suppliers and more. This unified data can then be used consistently across the organization, ensuring all departments and business processes work with the same information.

MDM is crucial to becoming a data-driven organization. By consolidating data from various internal and external sources, this technology creates unified master records (the so-called "golden records") for individuals, locations or entities. MDM streamlines data sharing among personnel and departments, improves data quality, eliminates redundancy and reduces errors in data processing. As a result, it supports better decision-making, enhances compliance and reporting and can significantly improve the efficiency of business operations.

Why is MDM critical during business expansion?

Harmonizing and standardizing master data is both challenging and beneficial for any business at any development stage. But why is it especially important to focus on MDM during growth?

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Data quality improvement

MDM enhances the reliability of data across the organization by ensuring its accuracy, completeness, and consistency, which collectively contribute to a unified version of truth. This uniformity is crucial for analytics that businesses depend on to enable their strategies and daily operations. For instance, a retail company can utilize MDM to synchronize product information across multiple online and offline channels, ensuring that descriptions, prices and stock levels are always current and accurate, thus improving customer satisfaction and reducing the risk of sales loss due to misinformation.

Unification for regulation and compliance

Every company faces regulatory and reference information, both internal and external: regulatory requirements, standards, lists, directories, mandatory reference books, etc. As businesses expand, the necessity of meeting an even more complex set of regulations and compliance increases correspondingly. MDM facilitates adaptation to changing regulatory requirements, reduces the risk of non-compliance, protects reputation and helps avoid potential penalties.

Operational efficiency

MDM integrates customer data from various touchpoints to create a comprehensive Client 360 view. As a result, the technology streamlines data-related processes, thus improving efficiency and accelerating business processes. This change allows teams to focus on value-added activities. For example, a financial institution can employ MDM to integrate client data from its branches, online banking and mobile app, enabling customer service representatives to offer personalized banking solutions and advice based on a complete understanding of each customer's history and needs.

Innovation acceleration

MDM unlocks the potential for innovation and growth by providing a clear, holistic view of the business landscape. A unified Client 360 view breaks silos and fosters collaboration between sales, marketing, customer service and other departments, empowering cross-functional projects. Moreover, MDM enables real-time data updates and ensures all parts of the organization have access to the latest information, promoting agility and responsiveness. For instance, a tech company can use MDM to maintain a unified view of research and development, marketing and customer feedback data to swiftly develop and release new products that align with customer demands and emerging trends.

Confident decision-making

A robust MDM system enhances decision-making by providing a comprehensive range of reliable data across the organization, improving visibility and predictability. The result is a heightened level of strategic alignment that empowers management to make well-informed decisions that resonate with the organization’s overarching goals and long-term objectives.

The benefits of implementing MDM during M&As: success stories

Saudia Airlines, consolidating five airlines and seven subsidiaries, gained a huge benefit by using MDM to create one platform for integrating client data from different businesses within one ecosystem. The digital ecosystem platform created a 360-degree customer view and brought tangible results, such as a 9% reduction in booking time and a 50% easier path for people with special needs. The created data infrastructure also lays the groundwork for meeting future business demands and further development of the digital ecosystem.

MDM integration across various companies comprising the Majid Al Futtaim Group (consolidating shopping malls, retail and hotel establishments in the Middle East and North Africa) facilitated creating a unified analytics programme throughout the organization. It helped enable information transparency within the group and generated value for the business both in terms of operational excellence and in delivering better products to end customers, identifying unique customers and having a 360-degree understanding of them.

The MDM system significantly advanced all types of analytics in Majid Al Futtaim Group, from macro analysis to important investment activities to day-to-day complex human-led decisions like optimal product placement strategies. As a result, within three years, more than 20 initiatives were launched and close to 100 initiatives are currently in the planning stages. Notable improvements included the optimization of product assortments in stores (a process that was streamlined from six months to under three weeks) and the application of machine learning technology for sales forecasting, which reduced stockouts and elevated the customer experience.

The banking industry is also among the main beneficiaries of MDM systems implementation during M&As.

For example, Raiffeisenbank successfully consolidated customer portfolios (3.2 million master customer records in the MDM hub) for multiple acquisitions and built an MDM hub to power its operations, prevent fraud and facilitate regulatory compliance. MDM benefits during the consolidation stage included reliable prevention of duplicate client records and an improved client experience throughout the M&A, full GDPR compliance during and after the consolidation, successful implementation of a KYC initiative to all business units and fraud prevention in real-time.

Turk Ekonomi Bankasi (TEB) achieved better customer targeting, acquisition and retention following MDM integration during the merging between TEB and Fortis Bank Turkey. The MDM system enabled TEB to accurately target, identify and acquire customers based on a more accurate view of customer relationships. It also ensured that staff could deliver a more personalized and rewarding service experience.

BNY Mellon was able to rapidly integrate the data of the two merging banking organizations to immediately realize synergies using the MDM system. It enabled the bank to quickly gain the business benefits of the merger, reduce the cost of data integration on the Asset Servicing project by 50% and combine the client base with minimal customer interruption. This also helped to reduce costs across the global organization in the following years.

Considerations for implementing MDM

Implementing Master Data Management involves a variety of technical and operational considerations to ensure that the system effectively serves the organization's needs.

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Firstly, a comprehensive MDM system is more than just another software solution. It is a cornerstone of the enterprise landscape, holding a position of importance alongside established systems like Enterprise Resource Planning (ERP) and Business Intelligence (BI). MDM serves as a pivotal framework for enriching data sharing across the organization, ensuring data integrity, facilitating seamless integration across systems and fostering a data-driven culture.

However, it is essential to remember that an MDM system does more than just handle data; it necessitates reevaluating and reorganizing business processes to align with new, data-centric operational standards. This alignment is not merely about adjusting to a new tool; it's about embracing a culture where data is centrally managed, maintained and maximized for the organization's benefit.

The implementation of MDM is a transformative journey that reshapes how data is viewed and utilized within a company. It requires a strategic approach, one that considers the intricate relationships between data and business processes. The earlier an organization adopts and organizes its processes around MDM principles, the smoother and more effective its data management becomes.

Why would you need an expert?

Addressing technical and business considerations when implementing MDM requires careful planning, collaboration across departments and, often, the guidance of MDM experts. Creating a robust MDM framework that can handle the complexities of modern data environments is only feasible with niche expertise and proven fieldwork.

Axellect has broad experience in providing end-to-end solutions in creating data governance strategy, MDM implementation and ongoing support. Helping businesses go beyond mere data exploring, we create actionable insights and tangible value by optimizing their data architecture, talent and processes for a transformative journey.

Our approach to MDM implementation begins with an in-depth analysis of the current data infrastructure and the organization's specific business requirements. Once we understand the business needs clearly, we translate them into precise technical specifications. This involves developing a customized architectural strategy and selecting the most appropriate tools and vendors to optimize your MDM strategy in various scenarios.

At the next stage, we implement the MDM solution tailored to the defined scenario, covering data profiling, cleansing, integration, migration, and establishing data governance processes. After functional testing, we also provide comprehensive workshops to end users and stakeholders and implement change management processes to ensure the MDM solution is used effectively.

Get in touch with our experts to learn more on how MDM can benefit your organization at the growth stage.

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Elizaveta Terentyeva Data & AI Strategy Manager

Elizaveta leads projects related to data and artificial intelligence strategy development at Axellect. With 10 years of experience in strategy, data-driven initiatives, and innovation ecosystem development in Telecom, IT, and Public Services, Elizaveta strives to help businesses use data as a strategic asset.
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