Master Data Management (MDM): Master Data and Quality Management
Vitoria/Ulm, October 25, 2013.- A master data record is a unique piece of information that serves as a reference for the company. For example, a product’s barcode, a customer’s assigned number, an inventory identifier for a piece of merchandise, etc. In turn, MDM, Master Data Management, is the tool that enables uniform processing and integration of master (or reference) data in a repository for the following activities:
Standardization and unification of master data.
Centralized updates, in terms of recording, aggregation, and consolidation.
Checking the reliability and cleansing of master data (removal of duplicates).
Compliance of master data with the company’s security standards.
Presentation and communication of master data across the entire company.
Differences between MDM and Data Warehouse
Informatica Corporation has stated: “A data warehouse brings together data from multiple sources to feed business intelligence, reporting, and analysis applications. While it unifies data from the source systems, the data warehouse was not designed to send modified data back to these sources. In other words, a data warehouse uses a one-directional process, whereas MDM requires a bidirectional process that ensures data synchronization between the repository and the associated source and target systems.” This multinational company has also defined the steps that must be taken to manage and update any company’s master data:
• Appoint a person responsible for each category of master data (customers, products, suppliers, organizational structures, etc.). This person becomes the guarantor of data quality and updates, for all systems, processes, and people that use this shared resource.
• Extract reference data for each domain from the various operational, transactional, and analytical systems, in order to load them into field-based repositories or into a central hub.
Apply data quality standards to obtain a clean data set, mainly through the deduplication of records.
Define the rules for reconciling and streamlining master data. The goal is to obtain, for each field, an optimal list/hierarchy that is understandable to users, whether these are individuals or applications.
• Synchronize operational and reporting systems with the data managed in the master data repository(ies) to ensure that all systems always use the correct data (same value and same version).
• Track updates and/or changes to master data across the participating systems and systematically loop back through the previous 5 stages of the process to maintain the accuracy, quality, and freshness of the shared resource’s data.
Failing to manage or govern your company’s different data sources will have the following consequences, as explained by IBM:
Rise of tools for managing data quality
Data Quality is a fundamental cornerstone of an MDM (Master Data Management) solution. Specifically, this refers to the processes, techniques, algorithms, and operations aimed at improving the quality of a company’s existing data. Traditionally, data quality has mainly focused on improving the quality of data on individuals and legal entities, since this is the data most prone to degradation and whose poor quality has the greatest impact on organizations’ productivity. The main benefits of data quality are:
• Save on direct costs: avoiding duplicate information and, as a result, avoiding, for example, sending the same letter to the same customer more than once.
• Boost marketing actions and management: standardizing files improves data analysis and enables precise segmentation, making your marketing actions and management more accurate and effective.
• Optimize customer acquisition and retention: with correct data, response rates improve and customers feel fully recognized by the company.
• Improve corporate image: the customer only receives the mailing that applies to them, just once, with their correct details.
• Improve service: faster identification of customers calling a call center, reducing wait times and leaving the operator more time to focus on the business message.