If your sheet of music is different from everyone else’s, then you need MDM – Part I

In today’s large enterprises which are shaped by a lot of M&A activity and that have many businesses and business locations, many folks feel like they are on a different page than everyone else in the enterprise. What your enterprise needs to look at, is implementing a strong Master Data Management (MDM) program.

I will be writing a series on Master Data Management (MDM) to look at all the aspects involved in implementing an MDM program. My goal will be to keep it simple and short and without use of technical jargon. The terms in the industry keep changing, but practice of managing this type of data has been carried out throughout our history in various industries in various forms.

What MDM has brought about is certain discipline around a very important aspect of running and knowing your business. When Master Data is not actively managed, it can get progressively decentralized. The quality of this data erodes as businesses grow in terms of both, volume and geographies. This post will focus on what Master Data is. Once we know what we are talking about, the next post will talk about why managing the master data is so vital for today’s businesses and the final post in this series will explore some of the ways to do this.

What is Master Data?

One can think of Master Data as the core data that exists even before an enterprise conducts any business on any given day. This data, as such does not change a whole lot from one day to another. In contrast, the data that is generated daily as a result of doing business is your operational data or transactional data. Thus master data is at the core of doing business, without which, you probably would not be able to conduct your business.

Let us now look at what really constitutes the Master Data.  One can think of it in terms of 3 W’s namely Who, Where and What. These give you the information that you typically require in all parts of an enterprise. Let us now look at typical data entities under each category.

  • WHO: (Actors, parties involved) This category consists of entities such as customers, employees, vendors.
  • WHERE: (Locations, places) The entities under here are locations – your business locations or vendor, customer locations etc.
  • WHAT: (Things, items) This includes your product catalogs, parts and any other items required to conduct your business.

The above entities form the basis of Master Data. However, beyond this, there is other information that pertains to the above entities such as: any hierarchies, data about this data (i.e metadata about the master data), which is also included in the Master data. The hierarchies provide additional hierarchical information about specific data. For example: A location may roll into a hierarchy such as state, region, country, etc.

The very nature of the Master Data means that it changes a lot less frequently than normal transactional data in an enterprise. However, managing this data requires discipline and commitment from the highest levels of an enterprise.

The important thing is, the Master Data when maintained in a centralized fashion, can lead to all parts of the business singing from the same sheet of music. This makes managing an enterprise as well as deriving business intelligence out of such data much easier than if different units and systems used different core data.

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