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What is Master Data?

At the very basic level, Master Data Management (MDM) eliminates redundant and inconsistent versions
of the same data in your organization.

Organizations believe that over 27% of their revenue is wasted due to inaccurate master data.*

Information about your customers, products, and sellers and the relationships between them – all
constitutes master data.

Why is Master Data Management important?

Companies today struggle to become agiler by implementing information systems that support and
facilitate changing business requirements. As a result, the management of information about products,
customers, etc. has become increasingly important.

Consider, for instance, the fact that most companies estimate that they are analyzing only 12% of their
data. These firms could be missing out on the data-driven insights inside of 88% of data that they’re
ignoring.*

Additionally, organizations have some system in place to store and retrieve this data. However, many
disparate systems store information, which leads to overlapping, redundant and inconsistent data.

For e.g., The definitions of common terms such as ‘supplier’, ‘vendor’ may differ across systems.
Different systems are likely to have different rules for data validation and cleansing, etc. Such
differences make it difficult for a business to achieve consistent, complete and relevant master data.

This gives rise to an important question –

Where do users go to get valid, accurate, consistent data?

A single word answer? MDM.

MDM (Master Data Management) helps you –

 Provide Seamless Information Across Multiple Channels – Accurate product data is critical to
differentiate your business and provide customers with a dynamic and personalized shopping
experience. PIM (Product Information Management) helps businesses manage product data
from multiple sources. It creates a master catalog of validated, high-quality unique product data
for efficient distribution to all sales channels, whether data is structured or unstructured.

 Help Understand Your Customer Better –Customer Data Management helps organizations
maintain a single view of all customer data. It synchronizes customer information across systems
and the organization’s information supply chain.
 Get A Unified View Of Your Masters – MDM software helps create reliable views to drive
operations efficiently with a complete view of all your data assets. It enables the creation of an
integrated view of products, customers, suppliers, materials and other data sets. This data
currently may reside in silos with different departments and units.

 Increase Trust In Your Data – Businesses need to rely on high-quality data for quality decision
making. Poor quality data can have negative effects on customer relationships, business decision
making, and forecasting.

 Connect Everything & Anything – With business information residing in multiple systems and in
multiple formats, information users have to duplicate efforts by going through information from
multiple systems and combining data together. MDM’s Data integration tool helps to combine
data with multiple formats attributes from disparate data sources. It delivers a single unified
view of all your data instead of data in silos.

 Be Accountable For Your Data – Easily govern your organizational data for accuracy and
accountability with MDG (Master Data Governance) solution.Data Governance brings business
users in implementation lifecycle and provides an effective mechanism to manage and author
data.

What is Master Data Management

Master Data Management (MDM) refers to the process of creating and managing data that an
organization must have as a single master copy, called the master data. Usually, master data can
include customers, vendors, employees, and products, but can differ by different industries and even
different companies within the same industry. MDM is important because it offers the enterprise a
single version of the truth. Without a clearly defined master data, the enterprise runs the risk of
having multiple copies of data that are inconsistent with one another.

MDM is typically more important in larger organizations. In fact, the bigger the organization, the
more important the discipline of MDM is, because a bigger organization means that there are more
disparate systems within the company, and the difficulty on providing a single source of truth, as well
as the benefit of having master data, grows with each additional data source. A particularly big
challenge to maintaining master data occurs when there is a merger/acquisition. Each of the
organizations will have its own master data, and how to merge the two sets of data will be
challenging. Let's take a look at the customer files: The two companies will likely have different
unique identifiers for each customer. Addresses and phone numbers may not match. One may have a
person's maiden name and the other the current last name. One may have a nickname (such as
"Bill") and the other may have the full name (such as "William"). All these contribute to the difficulty
in creating and maintain in a single set of master data.

At the heart of the master data management program is the definition of the master data. Therefore,
it is essential that we identify who is responsible for defining and enforcing the definition. Due to the
importance of master data, a dedicated person or team should be appointed. At the minimum, a
data steward should be identified. The responsible party can also be a group -- such as a data
governance committee or a data governance council.
Master Data Management vs. Data Warehousing

Based on the discussions so far, it seems like Master Data Management and Data Warehousing
have a lot in common. For example, the effort of data transformation and cleansing is very
similar to an ETL process in data warehousing, and in fact they can use the same ETL tools. In the
real world, it is not uncommon to see MDM and data warehousing fall into the same project. On
the other hand, it is important to call out the main differences between the two:

1) Different Goals

The main purpose of a data warehouse is to analyze data in a multidimensional fashion, while
the main purpose of MDM is to create and maintain a single source of truth for a particular
dimension within the organization. In addition, MDM requires solving the root cause of the
inconsistent metadata, because master data needs to be propagated back to the source system
in some way. In data warehousing, solving the root cause is not always needed, as it may be
enough just to have a consistent view at the data warehousing level rather than having to ensure
consistency at the data source level.

2) Different Types of Data

Master Data Management is only applied to entities and not transactional data, while a data
warehouse includes data that are both transactional and non-transactional in nature. The easiest
way to think about this is that MDM only affects data that exists in dimensional tables and not in fact
tables, while in a data warehousing environment includes both dimensional tables and fact tables.

3) Different Reporting Needs

In data warehousing, it is important to deliver to end users the proper types of reports using the
proper type of reporting tool to facilitate analysis. In MDM, the reporting needs are very different --
it is far more important to be able to provide reports on data governance, data quality, and
compliance, rather than reports based on analytical needs.

4) Where Data Is Used

In a data warehouse, usually the only usage of this "single source of truth" is for applications that
access the data warehouse directly, or applications that access systems that source their data
straight from the data warehouse. Most of the time, the original data sources are not affected. In
master data management, on the other hand, we often need to have a strategy to get a copy of the
master data back to the source system. This poses challenges that do not exist in a data warehousing
environment. For example, how do we sync the data back with the original source? Once a day?
Once an hour? How do we handle cases where the data was modified as it went through the
cleansing process? And how much modification do we need make do to the source system so it can
use the master data? These questions represent some of the challenges MDM faces. Unfortunately,
there is no easy answer to those questions, as the solution depends on a variety of factors specific to
the organization, such as how many source systems there are, how easy / costly it is to modify the
source system, and even how internal politics play out.
What Is Metadata?

Metadata is information about the data resources in an organization, or in simpler terms, data about
data. Typically in the IT industry, we talk about "inventory data," "personnel data," "budget data," and
"payroll data." The first word, a modifier, describes the data and classifies it as belonging to a certain
business function. This is metadata. It tells us what the data is

Metadata is also information about how the data is used. To understand this definition, consider the
following example: "$100.00" is a piece of data. It could be payroll data, personnel data, inventory data,
or budget data. Under the expanded definition,

 metadata is information that provides meaning and context to the piece of data. It tells us that
"$100.00" is a monetary amount in U.S. dollars, expressed in terms of dollars and cents.

 metadata also tells us how to understand the way the data is expressed or represented. Metadata
helps us to understand the data.

In any organization, there are two types of metadata:

Technical metadata :

describes the physical nature of the data, how the data was created, and how it is managed. This type of
metadata is often machine-readable. Borrowing from the previous example, the fact that $100.00 is a
monetary value and how it is expressed is physical data. Other examples of physical metadata might
answer questions such as

 What is the origin of the data? Does it come from an external source, or is it generated internally?

 Where does the data reside? Is it in a SAS table or some other structure?

 On which server is the structure stored?

Informational metadata:

describes business rules and definitions on which the data is based. This type of metadata is often
intended for people rather than machines. It is informational metadata that tells us whether the $100.00
value is payroll data, personnel data, inventory data, or budget data. Informational metadata would also
answer questions such as

 Who is responsible for the accuracy of the data? How can I contact him or her?

 What business process produced this data? How do I execute the business process?

 Which applications should (and do) have access to this data?


What Is Metadata Management?
If metadata helps us to understand data, metadata management enables us to use the
metadata. Metadata creation is time-consuming and expensive. To be truly useful, once stored,
metadata must be centrally available and easy to maintain. The primary goals of metadata
management are

 to promote metadata conformity to enable sharing of metadata by an organization’s applications.


Metadata that is defined for one application can be copied and easily adapted for use by another
application.

 To provide a common, centralized method of searching and managing distinct collections


of metadata.

Both goals lower the costs of metadata development and maintenance by promoting standardization
and reducing redundancy. Furthermore, when these goals are achieved, metadata can provide
meaningful and valuable information, for example,

 impact analysis of technical changes within an organization .

 comprehensive technical reporting about the organization’s application systems.

Impact analysis gauges the effect of a single technical change on all of the applications in an
organization. For example, if an organization stores metadata about its computer systems, it can use that
metadata to easily determine which applications will be affected by taking a specific server offline. Or, if
all applications store client address information in an address object and a change is needed in the way
this information is stored – for example, to surface street address, city/state, and country as three
separate fields instead of one – the change is easy to identify, make, and propagate.

As electronic data transfers and e-commerce increase, the soundness of the metadata supporting these
transactions will become as important as the data itself. Support for industry metadata models and data
interchange standards enables organizations to respond quickly and economically to rapidly evolving,
external reporting obligations.