Master Data and Business Processes

The intersection of Master Data Management (MDM) and Business Process Management (BPM) is a very interesting aspect of implementing MDM solutions.

We may divide this battleground into three sectors:

  • Business processes that purely consumes master data
  • Business processes that potentially changes master data
  • Business processes that purely updates master data


Business processes that purely consumes master data

An example of such a business process is the execution of a direct marketing campaign. Doing this in an effective way is heavily dependent on clean and updated master data. A key capability is the ability to separate which targeted real world entities belongs to the so called “new market” and which are existing customers (or prospects or churned customers). When working with known customers the ability to intelligently relate to previously products and their categories of interest is paramount. Often knowing about the right relation between targeted parties and locations is very valuable.

When doing MDM implementations and ongoing refinement the insight on how master data are used and creates value in business processes is the starting point.

Business processes that potentially changes master data

The most commonly mentioned wide business process is the order-to-cash process. During that process especially customer master data may be affected. A key question is whether the order is placed by a new customer or a known customer. If it truly is a new customer, then effective collection of accurate and timely master data determines the successful outcome of receiving the cash based on correct credit check, correct shipping information and more. If it is a known customer this is a chance to validate and eventually update customer master data.

While customer master data often is changed through business processes having another main purpose, this is not the case with product master data.

Business processes that purely updates master data

An example is from within manufacturing, distribution and retail where we have business processes with the sole purpose of enriching product master data. With the rise of customer self-service through e-commerce the data quality requirements for completeness and other data quality dimensions have increased a lot. This makes the orchestration of complex business processes for enriching product master data a whole new flavour of Business Process Management where master data itself is the outcome – of course in order to be optimally used in order-to-cash and other business processes.

PS: If you are interested in discussing BPM and MDM alignment on La Rambla in Barcelona on the 22nd April 2015, here is the chance.

Bookmark and Share

One thought on “Master Data and Business Processes

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s