Master Data Management
Master data is a term that describes the most valuable business data to an organization or operational business data. It can refer to three domains: people (customers, employees, suppliers, etc.), things (accounts, products, assets), and locations (addresses, routings).
Master data management is creating a single record (or version of the truth) for all of this data, even if it is held in separate systems. This process ensures that no duplicate data exists and that incomplete records can be enriched from information in other systems or external services.
Let’s say you have three records for J. Smith in your IB, CRM, and support systems. Maybe you realize from the phone numbers or email that they are all the same person. You could then create a master record for J. Smith using master data management, consolidating all the records into one entry.
The goal of Master data management is to create a single representation or “golden record” of all your most valuable data. You can do this through a 4-step process:
- MDM data model. Laying the foundation for MDM and standardizing input (or importing) from all participating enterprise systems. It imposes rules and formatting to allow the MDM solution to precisely map and interchange data between external and internal source systems into the master record.
- Data standardization and cleansing. Once the data from source systems have been consolidated in the MDM hub, it will need to undergo data preparation to reconcile inconsistencies in formatting, typos, and other data quality mishaps.
- Matching. This will determine if records from individual systems match the same business entity. Usually, you will have to define rules to determine what constitutes a “match” (e.g., if an entry has the same first, last name, and social security number).
- Merging. After the system matches entries based on your rules, this process will combine those entries into one. It will also need protocols to determine which entry’s information to favor (e.g., always use the most recently updated phone number/email address in the master record or create a record that contains all listed values).
A singular source of information for critical business data isn’t the only reason to implement an MDM solution. MDM can have several benefits like:
- Trustworthy financial, sales, and regulatory reporting.
- Accurate inventory enhancing control over the selling process.
- A reliable customer 360° leading to accurate segmentation and increased ROI for marketing campaigns.
- Merging product catalogs.
- Supply chain optimization.
Strategically, MDM absolutely has a process-driven role when it comes to addressing data dependency and the quality of key domains associated with any number of major business initiatives. It is both an advantage and a necessity for any data-driven organization.