There are many trendy terms used in the data world. Some of them become part of the basic vocabulary, others are just a temporary hype (you can compare it with youth language). But MDM, which in this article stands for Master Data Management, is a very carefully selected term to cause confusion.
First of all, the acronym MDM is also used for Mobile Device Management. Luckily this term is related to another subject matter, but for some recruiters the difference doesn’t seem to matter.
Secondly, and more annoyingly, is the combination of the words “master” and “data management”. When you finish this article, you will see the central theme is the management of the “master data”. Just continue reading…
And lastly, a mistake on top of the previous mistake, MDM gets seen as a synonym for Data Governance. To know more about this, please check the article “Demystifying Data Governance and Data Management” by Meric Potier. (spoiler: master data management is one of several elements of data management, and it doesn’t mean it’s the master of it)
So let’s try to explain what Master Data Management is all about.
The word “management” refers to the activities required to structure, correct and control the master data. This means existing records might get updated or new data can be created. The goal of this management is to increase the quality of the data, to bring more value to operational processes and business insights.
It’s important to understand MDM is a discipline that touches actual data. It is not a semantic layer, nor a framework, nor the endpoint of a data flow. It is sourcing data from existing systems and external data providers. It has a user interface in which data can be manipulated and controlled by stewards. This data is then used in reports, processes or even pushed back to source systems to improve and align the master data.
So what is “master data”? Master is not referring to the verb, but to the adjective (as in master bedroom, or master chef). When looking at a transactional record (i.e. Customer x bought 200 products y) it is the master data – in this case customer x and product y – that provides the context of what happened. Master data stores information about the entities that are crucial in your business (customers, contacts, products, materials, machines, spare parts, locations and sites, for example).
MDM ensures this master data is available at good quality, so you can use it everywhere. It can resolve following examples of common issues:
Incorrect groupings and aggregations in your analytical reports
Blocked operational processes because of missing information
Products not aligned between your website and the warehouse system
High effort for mapping external data with internal insights for doing market analysis
Old customer information in isolated systems
Dummy or legacy data that is not identifiable
MDM improves the quality of your most essential data. The data that represents the entities of your organisation and that is used in several systems, reports and processes. It’s a pity it has such a confusing connotation.
Any questions? Contact firstname.lastname@example.org
We also have a video explaining MDM, you can watch it here.