Master Data Management (MDM)


Master data represents the key business entities that support operational data such as customer, product, financial structures and sites. In addition to supporting operational data, master data also supports analytical data by representing key dimensions on which analytics is accomplished. Master data are, in effect, the trusted, quality, single version of the truth for key business entities that an enterprise requires.

Maximum business value comes from managing both operational and analytical master data across multiple domains. These joint solutions tend to be called Enterprise Master Data Management.

Operational Master Data Management

Master Data Management (MDM) solutions that focus on managing operational data to ensure quality and consistent access for use by operational applications are called Operational Master Data Management.

Operational MDM improves the operational efficiencies of the applications themselves, and the business processes that use these applications, by relying heavily on data ingestion, data virtualization, and information governance technologies. They bring real value to the enterprise, but lack the ability to influence reporting and analytics.

Analytical Master Data Management

Analytical Master Data Management focuses on managing master data to support downstream consumption in the delivery of consistent historical and analytical reporting. One common approach is for Analytical MDM to manage master data items and associated hierarchies that are required for aggregation and analysis reporting.

Analytical MDM brings real value to the enterprise, but lacks the ability to influence operational systems. Any data cleansing done inside an Analytical MDM solution is invisible to the operational applications. Because Analytical MDM systems do nothing to improve the quality of the data under the operational application landscape, poor quality, inconsistent authoritative data finds its way into the analytical systems and drives less than optimum results for reporting and decision making.

Operational MDM without Analytical MDM only solves half the master data problem. Analytical MDM without Operational MDM does not have the necessary dimension data to achieve its promise. Multi-Entity Enterprise Master Data Management creates a single version of the truth about every master data entity. This data feeds all operational and analytical systems across the enterprise.

Multi-Entity Master Data Management

Multi-entity Master Data Management solutions use an enterprise authoritative data schema with a common set of services coupled with a combination of applications and technologies that consolidates, cleans, and augments this enterprise master data, and synchronizes it with all applications, business processes, and analytical tools. This results in significant improvements in operational efficiency, reporting, and fact based decision-making. Example entities that can be leveraged across all functional departments and analytical systems include:

  • Customer – Also known as customer data integration (CDI) that enables
    organizations to centralize information from heterogeneous systems, creating a single enterprise-wide 360-degree view of customer information.
  • Site – Enables organizations to centralize site and location specific information from heterogeneous systems, creating a single view of site information.
  • Supplier – Unifies and shares critical information about an organization’s supply base. It does this by enabling customers to centralize all supplier information from heterogeneous systems and thus creates a single view of supplier information.
  • Product – Also known as product information management (PIM) enables
    organizations to centralize all product information from heterogeneous systems, creating a single view of product information and eliminating product data fragmentation.
  • Financial – Enables an enterprise view of financial chart of accounts, cost centers, and legal entities with a view to govern on-going financial management and consolidation based on consistent definitions of financial and reporting structures across general ledger systems, financial consolidation, planning and budgeting systems.
  • Relational Management – Creates an enterprise view of analytical dimensions, reporting structures, performance measures, and their related attributes and hierarchies.

Incremental deployment of MDM tends to focus on one authoritative entity. More entities can be added over time. But, it makes sense to make sure that these MDM entities do not become data silos of their own. Therefore, Enterprise MDM should take a holistic view of these individual authoritative entitles.

Additional Information

For additional information read the following blog posts:

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