MDM enables an organization to link all of its critical reference or master data shared by several disparate IT systems and groups under one single version of truth. This ensures that multiple inconsistent versions of the same master data are not used in different parts of an organization's operations. By providing front-line employees with more accurate and complete data, instead of inconsistent, incomplete, and often inaccurate data, organizations can realize many added benefits.

The business analytical capability of an organization can be increased by utilizing MDM to provide consistent master data across all its operational applications. By achieving this, the master data that flows into a data warehousing system would also be consistent thus allowing the organization to leverage company-wide analytics and reporting.

The benefits of MDM increase as the number and diversity of organizational departments, worker roles, and computing applications expand. The implementation of MDM is especially useful when companies merge as it can minimize confusion and optimize the efficiency of the new, larger organization.

In addition, companies with a global footprint having an independent region-wise ERP implementation tend to consolidate with one ERP solution for all countries. In this scenario, MDM proves to be the necessary solution by unifying master data from each ERP system into a single unified master data such as Supplier, Material master, or Customer.