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What is Master Data Management?

Need to manage master data management and want practical standards and best practices for information management and business intelligence governance and accountability?

What is data management?

Master Data Management
Data Management is a sub-set of information management that governs organization and control of the structure and design, storage, movement, security and quality of information.

What is master data?

Master data is reference data created in one application and sometimes used by other applications. Customer and product information is frequently called reference data but the term can really apply to pretty much any data.

What is master data management?

Master data management is the set of policies, standards and business and technology processes created to ensure that reference data (master data) is maintained correctly by the system of record and shared in a timely manner with each other application that needs to reference it.

Think of a human resource management information system. This application may create employee data and maintain information about each position the employee may occupy within the company.

A sales application may need to know which employees are assigned to each sales territory. Frequently, the employee data is created a second time in the sales application and the two applications are seldom synchronized.

Why is it important today?

Information management is all about, getting the right information, in the right hands, at the right time, to make the right decision. The trend today is to get a consolidated look at information to help manage things like customer relationships, products, and inventory.

Much of what we call master data is stored in legacy systems, which are  essentially “silo” environments—These systems do not talk to each other easily.

What about customer relationship management (CRM)?

CRM applications were originally thought to be the answer too much of the master data issues but they also contribute partly to the problem.

CRM systems hold part of the customer reference data but we still need to get this information into a usable format that can be shared with other customer related applications like billing and accounts receivable.

What about enterprise resource planning (ERP)?

Although ERP systems integrate many data in one location, they still sometimes look like a bigger “silo”. Frequently it requires ERP “experts” to  fully understand the master data. Just like legacy systems and CRM, ERP systems require new data movement solutions to extract master data and share it with other applications.

What MDM options are available?

Organizations have a “make” or “buy” choice.

Several leading vendors offer MDM solutions including IBM, Oracle, Sun MicroSystems, Siperian and others.

Each solution has strengths and weaknesses that should be carefully evaluated to ensure a "good fit”
What standards and best practices are required?

The following must be considered before embarking on an MDM solution
  • Business owners should be involved in any MDM decision.
Although much of MDM involves technology the information owners need to be involved in any decisions concerning the sharing, cleansing, distribution and protecting of common data.
  • An MDM business case should be completed showing the cost/benefit and feasibility of purchasing an MDM Solution. 
These solutions are expensive. They can easily cost well upwards of $1,500,000 and that does not include the specialized consultant support that will be required to help with implementation.
  • Master data management is a sub-set of data management, which in turn is a sub-set of information management.  
An information management framework must be successfully implemented within an organization as a foundation for MDM solution;

This implies successful implementation of a corporate management process that governs accountability for the structure and design, storage, movement, security, quality, delivery and usage of information required for management and business intelligence purposes, prior to commencing an MDM solution


Master data management is a sub-set of data management, which in turn is a sub-set of information management. An information management framework must be successfully implemented within an organization as a foundation for MDM solution.

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