19 February, 2011 12:20

February 19, 2011

What is Master Data Management (MDM)?

*and why do I care?

By Denise Jeffries, CCP, CBIP, CDMP

submission for March 4, 2011

In the IT fields we have lots of acronyms, heck we don’t even say Information Technology anymore, it’s just IT. So it’s no surprise that Master Data Management is just MDM. Ask 10 people what MDM is and I’ll bet we get 20 difference answers, because everyone has more than one definition for it.

Gartner says “MDM effectively supports your organization’s post-recession growth strategy, operational efficiencies, customer service, compliance and risk management.” (1) I am not making this up, check out the link. Now I don’t know about you, but I sure don’t know what that means.

Microsoft has a better take when it states MDM is “lists of data that are shared and used by several of the applications that make up the system” and goes on to state “This master data is often one of the key assets of a company. It’s not unusual for a company to be acquired primarily for access to its Customer Master data.” (2) While I feel a bit better, I now see master data is shared data and can be a key asset. But, I’m not so sure about someone buying an entire company just for its data…. Think of everything else it’s throwing away if the purchase is only for lists of data….what about the intelligence behind using that data, or how it was compiled….

Our beloved (or hated – depends on your view) Wikipedia site states “In computing, master data management (MDM) comprises a set of processes and tools that consistently defines and manages the non-transactional data entities of an organization (which may include reference data). MDM has the objective of providing processes for collecting, aggregating, matching, consolidating, quality-assuring, persisting and distributing such data throughout an organization to ensure consistency and control in the ongoing maintenance and application use of this information.” (3) It goes on to say “The term recalls the concept of a master file from an earlier computing era. MDM is similar to, and some would say the same as, virtual or federated database management.” Now everyone under the age of 40 is confused again. Go back and read it through it and you find it has some good points (although I believe transactional data applies in today’s world, but that’s another topic).

We used to talk about data standards, meta data management, reference data, lookup data and data quality (this list can go on) — and how its needed to have information about your data before you can use your data for any type of real business intelligence solution. Now we say you have to have Master Data Management. MDM is the whole enchilada solution for data control and use for the enterprise.

What exactly is MDM you say? Let’s break it down by Merriman-Webster’s definitions (4) of the words:

Master “one having authority over another”

Data “factual information (as measurements or statistics) used as a basis for reasoning, discussion, or calculation”

Management “the act or art of managing: the conducting or supervising of something” Manage: “to handle or direct with a degree of skill”

Authoritive measurements for reasoning with a degree of skill. I kind of like that blurb… I’m going to use something with authority to give me something I can measure and it will be reasoned with skill. Sounds like a good way to get data to me.

With that little bit of background, let’s address our topic. Master data is the information needed in a common format for core business to be carried out. So we need to determine where to start. What areas are the most important in any company? Usually Customers and Products are the normal two common focus areas. So you need to start collecting information about your Customers and about your Products.

You’ll need this information for Sales, Marketing, Customer Service, etc. Now, you could have completely separate databases for Sales, Marketing and Customer Service, but you have the same Customers and Products and you want them to be consistent across all three systems. That’s where MDM comes in, you maintain your base ‘lists’ for Customers and Products and then share it with the 3 systems for Sales, Marketing and Customer Service (and Finance and Audit…) you get it….a lot of areas need the same information and you want it to be available for everyone and for it to be accurate and easy to maintain.

Why maintain the same data in all the different systems? Maintain it in one place and deliver it to the various systems from this central place. That’s what MDM is all about. Now don’t get me wrong, there are processes, tools, best practices, quality measures, standards, all kinds of IT ‘stuff’ around it and how you do it, but simply put – MDM is the practice of centrally taking care your data.

So now we have a basic understanding of what MDM is and how you might want to apply it. Hopefully this is of some help, who knows maybe one day you’ll work on an MDM project, or a project that could use MDM practices. You could be the one to help your company save money, talent and time by focusing on one central area to collect your data and ensure its accuracy and consistency.

References:

(1) Gartner website: http://www.gartner.com/it/page.jsp?id=1217795&tab=agenda

(2) Microsoft website:

http://msdn.microsoft.com/en-us/library/bb190163.aspx

(3) Wikipedia website:

http://en.wikipedia.org/wiki/Master_Data_Management

(4) Merriman-Webster dictionary online:

http://www.merriam-webster.com/

(5) IBM:

http://www-01.ibm.com/software/data/master-data-management/

Some ’interesting follow up reading:

Free white paper from TDWI web site: Talend* open data solutions ’Talend Master Reference Data Extract Value from Your Most Common Data” http://tdwi.org/whitepapers/2010/10/master-reference-data-extract-value-from-your-most-common-data/asset.aspx?tc=assetpg&returnkey=HlCs958qsvp42K1LEr5TncNJ0WKJ4SXr

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One Response to “19 February, 2011 12:20”

  1. Paru said

    You have explained it very well Denise.

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