Master Data Management


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Master data management (MDM) is a technology-enabled discipline in which business and information technology collaborate to maintain the enterprise’s official shared master data assets’ uniformity, correctness, stewardship, semantic consistency, and accountability. When done correctly, MDM may expedite data exchange between various business systems and ease computing in system designs that include a number of platforms and apps. Furthermore, good master data management contributes to the trustworthiness of data utilized in business intelligence (BI) and analytics systems.

What Is Master Data Management?

Master Data Management (MDM) is a business-led programme that ensures the consistency and accuracy of the organization’s common data, often known as master data. People, methods, and technologies used to keep master data correct and consistent are all part of Master Data Management initiatives.

Most businesses nowadays run a variety of different systems, all of which include significant data on customers, the business, or other critical business KPIs, such as CRMs, ERPs, and so on. This results in data silos, redundant data, missing data, and, as a result, a fragmented perspective of the business. Because data is spread across several locations and languages, addressing simple business questions like “What services did our customers utilize the most last quarter?” or “Who is our most lucrative customer?” becomes challenging.

To be effective, Master Data Management must be a collaborative effort that is continuous. Larger businesses will usually elect a committee of individuals to define and implement data quality best practices. Connecting data sources and offering data governance spans an organization’s whole footprint. As a result, higher management buy-in and support are critical to the success of any master data management effort.

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Importance Of Master Data Management

Transaction processing systems are critical to corporate operations, and BI and analytics are increasingly driving customer interaction, supply chain management (SCM), and other business activities. However, many businesses lack a unified perspective of their clients. One typical cause is that client data varies from system to system. Because of variations in names, addresses, and other attributes, customer records in order entry, shipping, and customer service systems may not be identical. The same concerns might arise with product data and other sorts of information.

By unifying data from numerous source systems into a uniform format, master data management applications give that unified picture. MDM harmonizes customer data to generate a consistent set of master data for usage in all applicable systems. This allows enterprises to avoid redundant customer records with mismatched data, providing operational employees, business leaders, and data analysts with a full picture of individual customers without the need to piece together several entries.

What Is Master Data In Master Data Management?

But what exactly is master data? A major organizational data asset is master data, which includes reference data and metadata. While there are considerably more complicated definitions of master data on the internet, master data are the entities that drive business activities, are assessed by analytics, and are managed by governance procedures.

  • From the standpoint of operations or business processes, master data often represents transactable entities. Consider a typical order-to-cash process: a customer buys a product from a retail location using an asset (i.e. self-service kiosk); the italicized words—customer, product, location, and asset—are all examples of master data. In addition, master data includes the financial account to which the sale is recorded and the personnel who operate the retail location. While master data systems often do not record transactions, they do maintain consistent entity information to guarantee business processes do not fail.
  • Master data are the things that an organization tracks or investigates from an analytical or business intelligence standpoint. A dashboard, for example, might use aggregate transactional data from each financial account linked to shop locations to report on same-store sales. A report would reveal wallet share by reporting on consumers’ attach rate to the product portfolio. The italicized terms in both examples—financial account, location, client, and product—are master data. While master data systems often do not contain transactional information, they do have the conforming dimensions and characteristics (i.e. master data!) that analytical tools utilize to correctly aggregate and analyze data so that reports, dashboards, and so on are accurate.
  • Finally, from a governance standpoint, master data are the entities that are subject to controls. Privacy rules, for example, frequently specify how consumer, employee, or patient data should be managed. Risk management policies, such as emergency response plans or asset management rules, control assets and locations. Accounting regimes (for example, GAAP and IFRS) and financial rules have an impact on the design and control of financial account hierarchies. While master data systems do not often store policy and governance information (that is provided by data governance, or GRC platforms), they do frequently contain entities that establish the scope for the governance team.

Master Data Management Capabilities

Multi-domain and adaptive

An extensible master data repository with flexible data modeling capabilities gives a consolidated view of all data-type interactions, clarifies complicated cross-domain linkages, and provides a versatile and multi-domain MDM solution.

MDM with multiple styles

MDM solutions should support all four major master data management styles:

Centrally authored– Data is authored in the MDM in this form, and other systems subscribe to the MDM for master data (or the MDM pushes the data into downstream applications).

Consolidation – Data from source systems is sent into the MDM to be consolidated into golden records.

Coexistence – A mix of centrally written and consolidation that permits data to be created in many systems (including the MDM).

Rather than combining entries, the registry joins/aligns unique identifiers from all systems into a single join table. 

Real-time, secure data

The best MDM solutions now enable you to publish and subscribe to data on demand, delivering correct master data to systems when and how you need it while maintaining security. Users can better react to data and make faster decisions based on the insights revealed with real-time data.

Visualization of data and workflow

The finest MDM solutions have a data visualization component that helps you to rapidly discover and resolve quality concerns. The capacity may also assist users in working together to continuously improve processes, monitor processes, and generate dashboards for actionable data analysis.

A user interface that may be tailored to the needs of businesses

A visual design time environment with minimal code allows you to create bespoke UIs with easy drag and drop operations. Role-based user interfaces for your master data management solution may be designed to be cleaner, simpler, and more adaptable.

People, Process And Technology

Master data management is made possible by technology, but it is more than that. People and processes will be included in the definition of an organization’s master data management capabilities.


Within MDM, several jobs should be filled. Most notably, the Data Owner and Data Steward. Each position would most likely be assigned to numerous persons, with each person responsible for a portion of Master Data (e.g. one data owner for employee master data, another for customer master data).

The Data Owner is accountable for meeting data quality, security, and other standards, as well as adhering to data governance and data management protocols. In the event of departures from the requirements, the Data Owner should also support improvement programmes.

The Data Steward manages master data on behalf of the data owner and is most often an adviser to the data owner.


A data governance organization’s rules and procedures describe master data management as a “discipline for specialized quality improvement.” Its goal is to provide methods for gathering, aggregating, matching, consolidating, quality-assuring, persisting, and disseminating master data throughout an organization to assure a shared knowledge, consistency, correctness, and control in the data’s continuous maintenance and application usage.

Source identification, data collection, data transformation, normalization, rule administration, error detection and correction, data consolidation, data storage, data distribution, data classification, taxonomy services, item master creation, schema mapping, product codification, data enrichment, hierarchy management, business semantics management, and data governance are all common processes in master data management.


In order to provide an authoritative source of master data, a master data management tool may be used to help master data management by eliminating duplicates, standardizing data (mass maintenance), and implementing rules to prevent inaccurate data from entering the system. The items, accounts, and parties for whom commercial transactions are completed are referred to as master data.

It is usual to refer to where the data is “mastered” when the technical method generates a “golden record” or depends on a “source of record” or “system of record.” This is common language in the information technology sector, however it is important to avoid conflating the concepts of “master data” and “mastering data” with professionals and the broader stakeholder community.

Models of implementation

There are several models for deploying a master data management technology system. These are determined by an organization’s main business, organizational structure, and aims. These are some examples:

  • Recording source
  • Registry
  • Consolidation 
  • Coexistence
  • Transaction/centralized
  • Documentation source

Source of record

As the “source of record,” this model indicates a single application, database, or simpler source (e.g., a spreadsheet) (or “system of record” where solely application databases are relied on). The conceptual simplicity of this paradigm is a virtue, but it may not be compatible with the realities of complicated master data distribution in large organizations.

The source of record can be federated, for example, by attribute groups (so that various characteristics of a master data item might have separate sources of record) or by geography (so that different parts of an organization may have different master sources). Federation is only useful in specific use cases when it is apparent which subsets of records will be located in which sources.

The source of record model may be used to more than just master data; it can also be applied to reference data.

Master data transmission

There are numerous methods for gathering and distributing master data to other systems.

These are some examples:

  • Data consolidation is the process of collecting master data from several sources and combining it into a single hub (operational data store) for replication to other destination systems.
  • Data federation is the process of delivering a unified virtual picture of master data from one or more sources to one or more destination systems.
  • Data propagation refers to the act of moving master data from one system to another, generally via point-to-point connections in older systems.

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Best Practices Of Master Data Management

Previously different techniques focused on combining data for certain entities – namely, customer data integration (CDI) and product information management – evolved into master data management (PIM). MDM merged them into a single category with a broader scope, though CDI and PIM remain active subcategories.

While technology aids MDM, it is as much an organizational – or people – process as it is a technological one. As a result, business leaders and users must be involved in MDM projects, especially if master data will be handled centrally and updated in operational systems by an MDM hub. The many data stakeholders in an organization should have a role in decisions on how master data should be structured and procedures for changing it in systems. 

Connecting MDM’s anticipated advantages on data asset utilization to corporate plans and business goals is often required to gain management buy-in for a programme, which is required both to secure money for the work and to overcome any internal objections. Before launching a programme, business units and analytics teams should be trained on the MDM process and its goals.

MDM must also be seen as a continuous endeavor rather than a one-time project, as regular upgrades to master data records are frequently required. In order to prevent blockages in the attempts to incorporate standard sets of master data into business systems, several businesses have established MDM centers of excellence (CoEs) to build and then manage their initiatives.

Benefits Of Master Data Management

  • Boost sales growth

We must have access to trustworthy and full data for all consumer touchpoints in order to give targeted cross-sell and up-sell offers. MDM can give a centralized source of critical master data on customers, products, and master data entity relationships. This precise data source contributes to increased income by effectively reacting to clients via their preferred channel. We can guarantee that the relevant cross-sell and up-sell offers are sent to the right consumers at the right time if we have a deeper understanding of our clients.

  • Increase productivity

Master Data Management allows us to reduce IT overhead and expenses while increasing operational efficiency by delivering a full, consistent, and dependable source of master data throughout our business. By managing intricate interactions among goods, customers, vendors, and locations, MDM will also assist increase visibility and control over corporate operations.

  • Improve supply chain

Master Data Management provides a consolidated view of products as well as correct inventory, product returns, and out-of-stock items across the supply chain, increasing inventory management, forecasting, and customer service. We can guarantee that accurate and timely information is delivered to support the decisions and actions made by the apps, processes, and people who manage our organization.

  • Identify and act on ideas more quickly

By letting business users to easily access, manage, and graphically interact with master data, Master Data Management helps reduce time-to-insight and action. We can launch new goods and services more quickly if we have a more robust supply of product, customer, and vendor data.

  • Enhance Customer Satisfaction

We may also use Master Data Management to boost loyalty and sales by customizing interactions, giving a consistent experience across channels, and adapting products and services to our customers’ individual desires and requirements.

  • Increase compliance

Centralized and full master data aids in the reduction of compliance reporting and penalty expenses. Fewer vendor and product compliance concerns result in speedier new product releases and vendor onboarding with master data management.

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