The tech sector is still vigorous in discussions around blockchain. Everyone is still quite excited about the potential of this relatively young technology. While some aspirations are possibly too ambitious, there are some applications that have more than a little potential. In some practices, blockchain feels like the only viable direction to move. Master data management (MDM) is possibly on the top of that list.
The Myth of the Monolith
It’s easy to think of a business or organization as this single, well-oiled machine. It’s a myth. MDM exists as a concept exactly because large organizations are not perfectly centralized monoliths. Data is typically collected at local nodes, and combining and organizing the data from every node is a major challenge. If the source of master data comes from a decentralized system, it seems logical (and perhaps inevitable) that the best treatment is to utilize a decentralized management system.
That’s the core value of building MDM on blockchain. Each local data-collection node becomes a master ledger and contributes to the integrity and security of the master data. It makes the process of reconciling, protecting and using data less expensive and more efficient.
Making Data Better
It’s easy to generalize how decentralization is key, but specific examples and benefits go a long way. Let’s start with reconciliation. Blockchain algorithms are primed for data reconciliation. It’s already necessary to update the master ledger. This eliminates the traditional movement between units.
Blockchain can also lower costs. The decentralized network doesn’t need the same level of high-end server management. Without a central server or network to maintain, costs drop.
Blockchain data is also more reliable. The verification process inherent to blockchain practices ensures that data is robust. Additionally, the decentralized nature of the network makes it far more difficult to gain large amounts of data from a single malicious attack.
Perhaps most important of all, blockchain adds transparency to data management. The audit trail is incredibly difficult to corrupt, and it is widely accessible. It makes all transactions more transparent and eliminates many potential disputes.
Building MDM on a blockchain is not necessarily an easy enterprise. It will require significant investments — especially in time and effort. The long-term benefits are clear and inescapable. If the goal is to make MDM easier, more efficient, more reliable and more affordable, this is a transition that will likely take place for most organizations. The only question from here is how long will you wait?