What is a master record?
Master data management creates a master record (also known as a “golden record” or “best version of the truth”) that contains the essential information upon which a business or organization relies. The master record contains what an organization needs to know about critical “things”—a customer, location, product, supplier, and so on—to facilitate a task or action such as a marketing campaign, a service call, or a sales conversation.
One easily understood type of master data is reference data. Reference data is a subset of master data. Some examples of reference data are:
- Latitude and longitude
- Zip codes and area codes
- Three-letter airport codes used by airlines
- Healthcare codes (for example, ICD-10) used between organizations to understand the care provided
What do I need to know about Master Data Management (MDM)?
MDM solutions comprise a broad range of data cleansing, transformation, and integration practices. As data sources are added to the system, MDM initiates processes to identify, collect, transform, and repair data. Once the data meets the quality thresholds, schemas and taxonomies are created to help maintain a high-quality master reference. Organizations using MDM enjoy peace of mind that data throughout the enterprise is accurate, up-to-date, and consistent.
The categories into which master data is classified are called domains. Common MDM domains include:
- Customer master data management—both business-to-business (B2B) and business-to-consumer (B2C)
- Product master data management
- Supplier master data management
- Reference data master data management
- Location master data management
- Asset master data management
- Employee data master data management
But you can also master more specific elements like account, patient, provider, beneficiary, contract, claims, projects, movie, character, airports, aircraft, vehicles, sites, and more. It all depends on the business challenges with which you want to align your data.
Why do I need Master Data Management (MDM)?
Having multiple sources of information is a widespread problem, especially in large organizations, and the associated costs can be very high. Because data changes over time, it’s easy for it to get out of sync and become fragmented, incomplete, inaccurate, and inconsistent. As it degrades, the people that use it lose trust in it. Consider the impact on a sales call if the account manager accesses customer information that is incomplete or inaccurate:
- Is the location the right one, or has the customer’s address changed?
- How confident is the account manager in knowing which products the customer owns and uses?
- Are there any open service items?
The wrong answer to any of these questions could put a new sale—or existing relationship—at risk. In this example, MDM would ensure that a trusted customer profile is created to eliminate such issues in a company’s data.
MDM addresses the challenges associated with disparate applications that create, capture, and access data across multiple systems, applications, and channels. This includes SAP, Marketo, Salesforce, DemandBase, web portals, shipping systems, invoicing systems, contract systems, and more. With a trusted source of reliable, current data, organizations can get a better view of their products and suppliers, drive customer engagement, and offer a consistent experience to employees as well as customers.
Other issues addressed by MDM include:
- Manual data entry and errors such as transposing characters, miskeyed entries, and incomplete data fields
- Different name usage (Jim and James; GE or General Electric),
- Duplicate data entries and replication of data
- Data that has been updated in one system, but not in any others
MDM is of particular interest to large, global organizations, organizations with highly distributed data across multiple systems, and organizations that have frequent or large-scale merger and acquisition activity. Acquiring another company creates wide-reaching data integration challenges that MDM is designed to mitigate. Thus, MDM can accelerate the time-to-value from an acquisition.
MDM also helps prevent disjointed customer experiences in companies with segmented product lines, multiple interaction points and channels, and distributed geographies. With MDM, companies gain confidence that the data they rely on remains trusted and authoritative.
What are the benefits of Master Data Management (MDM)?
By providing one point of reference for critical business information, MDM eliminates costly redundancies that occur when organizations rely upon multiple, conflicting sources of information. For example, MDM can ensure that when customer contact information changes, the organization will not attempt sales or marketing outreach using both the old and new information.
Common business initiatives addressed by MDM include:
- Customer experience
- Analytics
- Mergers and acquisitions
- Governance and compliance
- Operational efficiency
- Supplier optimization
- Product experience
Master Data Management (MDM) Webinar Series: How to Succeed as a Data-Driven Company
Curious about what master data management (MDM) brings to an end-to-end data strategy? Our webinar series covers everything from MDM basics to the difference between MDM and data quality.
- An Introduction to a 360-degree View of Data
- Building a Business Case for MDM
- MDM and Data Quality
December 2021 Gartner® Magic Quadrant™ for Master Data Management Solutions: For the six straight time, Informatica has been named a Leader in the December 2021 Gartner Magic Quadrant for Master Data Management Solutions.
Intelligent Master Data Management for Dummies: Learn how to deploy intelligent MDM and take the first steps toward capturing the full value of your data.
Three Ways Informatica’s Intelligent Data Management Cloud Improves Master Data Management