What Is an Example of Master Data Management?
by Lumavate | Last Updated: Feb 11, 2024
As a business, you collect a lot of information about your customers, products, and overall operational details. With so much data being collected and managed, it can feel impossible to manage it all. Fortunately, that's where master data management software comes in, which can help you run your business more efficiently than ever. So, let's break down how MDM works and why it's so valuable.
What Is Master Data?
Master data is any information necessary to run your business. Some master data examples can include vendors, client accounts, website information, prospect and lead generation lists, and more. Basically, any data that people within your organization need to fulfill their duties or job descriptions. Product information management can also be considered "master data" because it refers to product details like SKU numbers, dimensions, color options, and more.
Also, keep in mind that transactional data (i.e., sales and customer accounts) doesn't fall under the master data definition. Instead, those details are curated and managed separately.
What Are the Three Types of Master Data?
Generally speaking, there are three types of master data to put into a management program. They are:
Customer Data - This information can include contact information for specific customers, as well as lists of prospects or lead generation platforms. Typically, as leads and prospects convert to customers, they will funnel into a customer relationship management (CRM) system to make it easier to retain and resell to those customers.
Product Data - Each product has a list of details, such as descriptions, inventory numbers, dimensions, photos, and more. Products can also be categorized into different classes depending on what they are.
Financial Data - As we mentioned, transactional data is not part of master data management. So, financial data is anything related to reporting or accounting. So, while overall sales numbers may be included, individual transactions wouldn't. Similarly, tax information would be considered financial data.
While these types of master data are the most commonly managed in an MDM, some companies may also include other information like employee and vendor details. In many cases, it makes sense to keep all of this information in a single system for speed and efficiency.
Why Master Data Management is Important?
If you're running a small business, you may not have much information across different departments. However, as your company grows, it can become virtually impossible to keep track of every data point. Fortunately, the master data management process can simplify and streamline your organization so it runs more smoothly.
For example, one of the main benefits of master data management is the ability to organize everything in a single dashboard. Even if specific data points (like product information) live on an individual server or hard drive, MDM software can still access it within the same system. This way, it's much easier for managers and executives to see everything in one place rather than hunt down specific information across various systems and programs.
When implementing master data management best practices, your business can also see other advantages like:
Standardized Data Management - Because all data points are handled in the same system, it's easy to input and recall various pieces of information when needed. For example, all products may use the same data sheet, so it's easier to find out a specific detail (such as size dimensions).
Streamlined Access - Various employees across different departments may need to access the same data. Rather than sending individual files or storing items in different places, MDM software allows everyone to see the same data on the same server. Also, when data is updated in the system, no one has to worry about correcting the details on different files or servers.
Simplified Data Governance - While MDM software can make data management easier, you must also appoint a data manager to oversee everything. When all information is consolidated into a single dashboard, it's easier for the manager to control access for individual users and update details as necessary.
What Is an Example of Master Data Management?
At this point, you may be asking, "What are MDM tools?" Fortunately, there are many different master data management tools available, including Stibo Systems, Informatica, PiLog MDRM, TIBCO, Profisee, and more. However, while each of these programs offers a streamlined master data management system, not all of them have the same functionality.
Let's look at one master data management example, Pimcore. Technically, Pimcore is designed as a product information management (PIM) system, but it can be expanded to include other types of master data. Other software, like PiLog MDRM, is mainly focused on MDM, meaning it doesn't dive too deeply into other types of data management like PIM.
However, before you start looking at master data management companies or an MDM tools list for comparison, it's imperative to ask whether MDM is necessary. As a rule, only enterprise-level companies with lots of complex information require master data management. Because these systems are designed to handle thousands of data points, they may be too intense for small and mid-sized businesses.
In some cases, you may be able to leverage multiple data management systems, such as a CRM, PIM, and product lifecycle management (PLM) program. Since each system handles a specific type of data, it doesn't necessarily create silos within your organization. Also, products like Lumavate can incorporate other types of data management, such as digital asset management and digital product experiences.