Master data management is a way for companies to integrate all of their various data sources and to assemble key indicators and statistics. Companies often have many different sources of data about their daily operations, from customer service to enterprise resource planning. It can be difficult to answer questions that reach across these different types of data.
Master data management (MDM) enables companies to be agile and to respond to challenges within their organization. Profisee, an expert in master data management, explains these systems and how they can help businesses of any size.
Types of Data
It can be challenging for businesses to manage their different categories of data. Understanding these different data types shows how MDM can help companies pull it all together.
This data records business transactions like invoices, claims, deliveries, and sales. This data needs to be incorporated into other types of data to become a meaningful asset.
Metadata is essentially data that describes other data. It can help to label and explain the data stored in the system. It includes report definitions and XML documents.
This data type involves documents which support the company’s function. Emails, PDFs, and white papers are a few examples.
This type of data is important because it helps people understand the relationship between other categories. This may include product lines and company organization charts. Hierarchical data is especially crucial to the MDM system.
Master data contains the essential building blocks of a business. Covering the categories of customers, products, and locations, these are the key data elements that define a business.
Deciding Which Data Should Be Master Data
This question is answered differently by each type of business. It is important to capture behavior data, which relates how different types of data hierarchically interact with each other. For example, a product in a store is ranked in several categories from the basic type of product down to the specific make, model, and color.
Create, Read, Update, Destroy, Search (CRUD cycle)
Considering the CRUD cycle (create, read, update, destroy, search) can also help a company determine which data items should be made master data. For example, in human resources, a record is created when a new employee is hired. It is read while the employee is doing his or her job functions. Updating is necessary when the employee changes marriage status, gets a raise, or transfers to another part of the company. Records are destroyed when the employee is terminated or in the unfortunate case of their death. Searching for this data happens within the human resources line of business (LOB) database.
Length of Lifespan
Another question to consider when deciding whether to include a data type in the master data is its lifespan. For example, a single transaction from a retail or service business is not likely to be considered master data. These transactions are over and done with within minutes or hours. A contract for management of services should be considered master data.
Value and Complexity
The value of data to an organization can determine whether it should be added to a company’s master data. Complexity is another crucial point. If the data is valuable but not complex, the item may not be worth categorizing it as master data. Each case should be considered separately.
Challenges of Maintaining Master Data
When master data is centralized, it is especially crucial to make sure that it is completely accurate and up-to-date. When master data is used across departments and divisions of a company, any error can result in major difficulties. For example, a wrong data point in a company budget can lead to overspending. An incorrect customer address can cause important mail to be returned to sender.
Implementing Master Data
Using master data may help to streamline a company’s course of business, but often it requires changes to employee behavior. When the new system is in place, the employees in charge of maintaining the data should be thoroughly trained by the staff members or consultant who implemented the system.
MDM can help to transform the agility and effectiveness of businesses of all sizes. It can help different divisions of the company work better together, clearing up confusion and duplicated work functions. MDM can be a major advantage in business. Profisee can help companies analyze and prioritize their data, centralizing its most crucial functions.