MDM 101

MDM (Master Data Management) is the new bookkeeping.

Any enterprise is described much better by having a look into the Master Data than by reading the Financial Statements made up from the Transaction Data.

It’s about the numbers and nature of the Master Data and how they are managed.

You can find a list of Master Data Management solutions here.

Master Data is the core entities that describe the ongoing activities in an organisation as:

  • Parties (business partners) in the roles as contacts, prospects, customers, suppliers, members, citizens and any other parties with whom we interact
  • Products (and assets) that we buy, produce, have and sell
  • Places (locations) being production plants, stores and warehouses, delivery points, visit places and so on.

Most MDM initiatives are focused on a single type of Master Data. The most common areas are Customer Data Integration (CDI) and Product Information Management (PIM).

Multi-Domain (or Multi-Entity) MDM is when you include several of these types of Master Data in a single solution. Such a project is described here.

When working with data quality within master data management you may of course encounter some similarities between the different master data types, but you will certainly also meet a range differences. Read more in the post Same Same But Different.

Multidomain MDM PuzzleIf you are interested in Multidomain Master Data Management you may join the Multi-Domain MDM group on LinkedIn.

Reference Data is a term often used either instead of Master Data or as related to Master Data. In my eyes reference data is those data defined and (initially) maintained outside the organisation such as a country list, postal code tables and product classification systems. Big Reference Data may be address- business- and citizen directories as explained in Big Reference Data musings.

Social MDM (Social master data management) is about exploiting big reference data in social media as a supplementary source of external data and supporting social collaboration with a MDM solution. Read more about the benefits of Social MDM here.

Data Governance is the essential discipline you need to have in place to manage your Master Data (and Transaction Data). As Wikipedia says: Data Governance is an emerging discipline with an evolving definition. In my eyes Data Governance is practiced in the space between business rules and common sense.

Data quality dimensions apply to Master Data Management as follows:

  • Completeness, conformity, consistency, timeliness and accuracy is related to the concept of “fit for purpose”. As Master Data often are used for mulitple purposes in an organisation the resolution to this is often to reflect real world objects done by data matching with external reference data where possible.
  • Uniqueness is related to the concept of “a single version of the truth”. Deduplication by data matching is a core activity in the reach for this state. As Master Data often are used for mulitple purposes in an organisation hierachy management is an essential destination of deduplication and consolidation.

Hierarchy Management in Party Master Data has a great deal of challenges. Some of them are explained in the blog posts:

A key concept in transformation of data from operational sources into hierarchies is Master Data Survivorship.

Once having built the hierarchies it’s essential to have an ongoing maintenance as hierarchies in the real world are slowly changing.

Handling address information is a hierarchy of it’s own kind within party master data as explained here.

Within Product Information Management (PIM) Hierarchy Management is king as explained in the post What’s a Six Pack.

I have made two MDM book reviews:

If you are searching for a MDM/PIM  tool, here is a service for selecting your solution.

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3 thoughts on “MDM 101

  1. Jutta Missale 20th June 2011 / 07:38

    Agree!! Made the same experience and the expression “Data Governance is practiced in the space between business rules and common sense” is something I’m praying for years in my company…

    • Henrik Liliendahl Sørensen 20th June 2011 / 08:23

      Thanks for commenting Jutta, hope your prayers are heard.

  2. Andrew Mathewson 16th April 2013 / 17:36

    I’ve been looking for a source to point friends for general information regarding MDM and the associated world of Master Data. Looks like I have found it. A comment regarding your expression of Data Governance is interesting to note. I’m finding in the US large enterprise market that there is a clear need for a Data Governance Organization as a means of adjudicating issues and have an identified path of “to whom do I raise a conflict” when multiple departments have competing values and desires for a particular field. I am seeing as a Data professional a heightened need for DGOs and help on getting there. I’m seeing Big Data as an accelerator of the need. What are your thoughts? Regards,

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