Editor’s Note: This is a guest blog from Diptesh Singh, Cognizant Data Management, Governance & Privacy Practice Lead
There is a lot of confusion in the IT and MarTech space about the differences between a Master Data Management (MDM) solution and a Customer Data Platform (CDP). As a Practice Lead with Cognizant for Data Management, Governance & Privacy, I’m asked about this by clients often: which solution do we need? Do we need both? How much overlap is there?
I recently had the pleasure of discussing this topic with Redpoint Global, and you can see a recording of that conversation here. I’ll use this space to shed more light on what people need to know when considering a data management tool.
First, some quick definitions. MDM is a key pillar of Cognizant’s Data Management practice. An MDM tool concentrates on data assets that are typically fixed across the enterprise, i.e., master data. An MDM solution takes a holistic look at the functions and domains of those fixed data assets, identifies the key critical assets and makes sure those assets are governed, available and valuable for the entire enterprise.
In comparison, a CDP concentrates on using consumer and customer data to learn as much as possible – customer master, transaction detail, and behavioral attributes – every interaction across every engagement touchpoint. Ingesting all of this data and creating a single view of the customer is the number one thing that a CDP is known for. Secondly, a CDP makes a single view actionable, enabling decisions to present a customer with the right content, on the right channel and at the right time.
An MDM and CDP are both mission-critical for the enterprise, with the key distinction that an MDM looks at various assets throughout the enterprise – location, supplier, vendor, etc. – whereas a CDP concentrates primarily on consumers and customers. By consumers, I mean the B2C context – shoppers, goods and services.
For the Common Good: MDM + CDP Working Together
The biggest misconception is that an enterprise needs one or the other. In our view, MDM and CDP are more complementary technologies, with an MDM implementation feeding into an effective CDP implementation.
Again, keeping in mind that a CDP is meant to enable decisions based on a single view that benefits the consumer, and that master data impacts that decision. Inventory is a good example of a typical master data asset that can easily impact a decision made on behalf of a consumer. In a revenue-based or experience-based use case – standard for most CDP implementations – all information that is relevant about or for a customer may have the potential to influence a moment in the customer journey.
An MDM, therefore, feeds into the CDP ecosystem; quality master data is integral to building an updated, accurate single view of the customer which again is essential for orchestrating a next-best action.
Maximize Value from Your MDM and CDP Technologies
Lastly, from the perspective of driving enterprise value, a successful data strategy accomplishes three main objectives: revenue growth, cost optimization and/or operational efficiencies, and brand reputation.
Through that lens, both an MDM and CDP are important because a positive customer or consumer experience is closely tied to revenue growth. Time and time again, we’ve seem that an increase in customer satisfaction and response rates drive revenue. Operational efficiencies and brand reputation are solidified because quality master data helps ensure data is used only for its intended purpose. From a CDP perspective, irrelevant offers and blast campaigns are eliminated; a next-best action optimizes the use of data in a particular moment. As for brand reputation, a master profile includes such data elements as a customer’s opt-ins and other privacy preferences. Adherence helps cement a level of trust between the brand and the consumer – of particular importance in a cookie-less world that prioritizes the respectful use of first-party data.
For more on how to maximize your implementation of a CDP, you can learn more by contacting Redpoint’s Global Alliance Director John Dodd, Cognizant’s partner liaison, via email or LinkedIn.
