Master Data Management
Master data management (MDM) involves creating a single master record for each person, place, or thing in a business, from across internal and external data sources and applications. This information has been de-duplicated, reconciled and enriched, becoming a consistent, reliable source. Once created, this master data serves as a trusted view of business-critical data that can be managed and shared across the business to promote accurate reporting, reduce data errors, remove redundancy, and help workers make better-informed business decisions.
What is the difference between Master Data Management (MDM) technology and MDM as a discipline?
As a discipline, MDM relies heavily on the principles of data governance with the goal of creating a trusted and authoritative view of a company’s data. Data governance and MDM have become critical to successful business practices as organizations put increasing importance on data-driven decisions in today’s global marketplace —and as a growing number of systems contribute digital records of the people, places, and things that matter most to a business.
As a technology, MDM solutions automate how business-critical data is governed, managed, and shared throughout applications used by lines of business, brands, departments, and organizations. MDM applies data integration, reconciliation, enrichment, quality, and governance to create master records. Automation and artificial intelligence (AI) are used to identify, match, and merge data across the systems that hold it, and then the clean data is shared with the applications, systems, and analytics that need it. In merging records, MDM can also correct for inconsistencies in records, capture where the data came from, and create an audit trail of changes. Providing transparency within a trusted framework offers visibility into how each master record is created or modified.
What is a master record?
Master data management creates a master record (also known as a “golden record” or “best version of the truth”) that contains the essential information upon which a business or organization relies. The master record contains what an organization needs to know about critical “things”—a customer, location, product, supplier, and so on—to facilitate a task or action such as a marketing campaign, a service call, or a sales conversation.
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One easily understood type of master data is reference data. Reference data is a subset of master data. Some examples of reference data are:
What do I need to know about Master Data Management (MDM)?
MDM solutions comprise a broad range of data cleansing, transformation, and integration practices. As data sources are added to the system, MDM initiates processes to identify, collect, transform, and repair data. Once the data meets the quality thresholds, schemas and taxonomies are created to help maintain a high-quality master reference. Organizations using MDM enjoy peace of mind that data throughout the enterprise is accurate, up-to-date, and consistent.
The categories into which master data is classified are called domains. Common MDM domains include: