A top theme in the economic news these days is about credit ratings for countries – also called sovereign credit ratings.
The credit rating practice is a good example of how a lot of data (with a given quality) is transformed into a very compact piece of information as an AAA or whatever rating (with a disputed quality).
The focus of this blog post is however about how credit ratings may be attached to reference and master data entities.
The figure below is a data visualization of S&P credit ratings for European countries:
The big dark blue land in the upper left corner is the southern part of Greenland. Even though that Greenland has an ISO country code (GL) and an internet TLD (.gl) Greenland hasn’t actually been rated as a country, but is (my qualified guess) rated together with the Faroe Islands and continental Denmark as the Kingdom of Denmark.
On other maps Greenland isn’t included in the triple-A club:
So this is a good example of how a top level reference data list as a country list may have hierarchies and may be specific in a given context, a subject that often is pondered by fellow data geek and blogger Graham Rhind latest in the post: Have you checked your country drop down recently?
A much more frequent subject than sovereign credit rating is of course corporate credit rating.
Here we have the same hierarchical considerations.
A business-to-business (B2B) customer list may have a lot of entities belonging to the same enterprise that is credit rated as one. However you shouldn’t give a credit limit to each entity which would be the credit limit you would assign to the enterprise as a whole. Avoiding that will be an important result from practicing good customer master data management.
An often observed data quality flaw in customer master data is that entities actually belonging to the same credit rated enterprise has different credit risk assignments resulting in exposed financial risk. Avoiding that will also be an important result from practicing good customer master data management.
How do you rate your customer master data management? AAA or less?