Master Data Management

The global data storage capacity is expected to reach 160 zettabytes or one trillion gigabytes in 2025. However, less than 5 percent of that data is ever analyzed or used. Much of the data is inaccessible. It may be unstructured, making it harder for computer systems to locate.

Data silos prevent companies from sharing data, forcing teams to duplicate information. Because data storage is often unsearchable, employees spend hours looking for information. Much of the data’s value goes untouched.

Managing data requires more than a defined file structure or multiple spreadsheets. Companies need solutions that enable staff, customers, and partners to access information from a central location that is searchable. Centralizing the data eliminates silos, removes duplicate efforts, and improves productivity. It allows organizations to leverage their data for a competitive advantage.

Data management tools can be enterprise-wide systems that hold business-critical information. They may be more specialized, focusing on product information or digital assets. Some solutions may overlap. One area where that overlap may occur is in the master data management (MDM) and product information management (PIM) tools. Understanding what an MDM or PIM does can help determine which is the right choice for a business.

What Is Master Data?

Master data refers to core information that enables analytical and transactional operations within a business. It encompasses the people, places, things, and ideas that drive an enterprise. Master data examples include:

People. Data pertaining to customers, suppliers, employees, competitors, and others associated with a business. Master data under this domain changes infrequently.
Places. Information on markets, offices, stores, and facilities that rarely changes, although data may be removed.
Things. Items such as products, assets, materials, and equipment. The items in this domain can fluctuate.
Ideas. Business constructs such as cost centers, organizational charts, and sales plans that impact operations.

The master data domains contain the fundamental information that supports business operations.

What Is Master Data Management?

Part of a master data management definition involves collecting, defining, structuring, and managing master data to establish a single source of truth for each domain. It encompasses data governance by focusing on accurate, uniform, and consistent information.

It harmonizes data so all parties use the same information. It eliminates silos that produce conflicting materials. Master Data Management (MDM) establishes a uniform brand image and improves customer relationships.

MDM allows enterprises to identify and define core information that is then cleaned and transformed for integration with other systems. It blends technology, processes, and governance for improved business insights and operations.

The all-encompassing nature of MDM solutions requires cross-functional participation. IT knows where the data is on the network and may be required to facilitate integration and support. Every department that touches a piece of master data needs to identify the data and help categorize it. Groups that will use the data for analysis or transactions should indicate how the master data will be used.

Implementation can be time- and labor-extensive. For large enterprises, control of master data may be essential for a clear picture of worldwide operations. However, other data management tools such as product information or digital asset management (DAM) may deliver the needed functionality with a much shorter lead time.

Why Master Data Management is Important

Having a centralized single source of truth is crucial for any organization wanting to build trust with customers, employees, and the public. It is a primary reason for implementing any data management solution.

The following are added benefits of master data management.

Operational Efficiency

Inaccurate or inconsistent data slows processes. Employees must spend time checking and cross-checking data accuracy. With a single source of truth, staff does not have to search or confirm the information. There are no delays when using the data.

Data Governance
Creating policies and procedures to ensure data integrity minimizes the time needed to collect and consolidate data. It also improves data quality for more precise insights and analysis. Data governance ensures that data standards are met to reduce errors and improve data reliability.

Data Consolidation

Many organizations have a complex tech stack with applications running on different platforms, making integration challenging. Data management systems can simplify the deployed technologies through data consolidation.

Data consolidation improves data integration. Data from across the tech stack is presented in a consistent and uniform format for seamless operations. Information can be quickly analyzed for more up-to-date data for improved decision-making.

Data Security

Protecting data from unauthorized use is a primary concern of any enterprise. Data loss or breaches can cost millions to contain. That doesn’t include loss of business due to a damaged reputation and a lack of trust.

Data management solutions should have robust security that prevents unauthorized access through user controls such as multi factor authentication. They should have policies in place for encrypting critical data while at rest and ensure that policies are in place to meet regulatory standards.

Scalability

Corporate data grows daily. Any data management solution must be able to scale to meet growing needs. It should have the flexibility to add data fields and even domains without a significant impact on operations.

Whether the solution is on-premise or in the cloud, the architecture should scale to accommodate changes in data requirements. Solutions that lack scalability also lack the agility to keep an organization competitive.

Overall, a master data management system consolidates data to help streamline operations. It can improve data governance for easier integration with other systems. It helps standardize processes and reduce risk related to regulatory and compliance requirements. It maintains the information needed for transactional and analytical operations.

What Are the Five Core Functions of Master Data Management?

With a compound annual growth rate of over 18 percent through 2029, the number of master data management companies will continue to grow. Although every product includes different master data management tools, each solution should offer the following five functions:

Single view of all master data in an enterprise to eliminate data silos.
Data governance policies and procedures for accurate, consistent, and uniform data.
Improved data quality across the entire enterprise.
More accurate data analysis.
Data consolidation for machine learning or artificial intelligence.

Each solution should have a master data management framework that defines how the resulting master data management architecture is built.

What Is a MDM Tool Used For?

MDMs are software tools that bring technologies, business units, and applications together for a consolidated view of an organization’s data. A critical piece of any MDM is data governance, which defines data types, data standards, access rights, controls, and procedures.

Establishing rules for data extraction and cleaning allows businesses to create processes and workflows to streamline operations and integrate them into other solutions. It aims to improve business intelligence, enhance customer experiences, and expedite data-based decision-making for business growth.

MDM solutions are designed for organizations with complex data requirements that demand data governance policies and procedures for compliance and regulatory standards. The MDM tools help enterprises adhere to data storage and use laws in multiple jurisdictions.

Many companies do not require MDM functionality to manage their business data. They can use other data management tools such as customer relationship management (CRM), Product Lifecycle Management (PLM), and Product Information Management (PIM) to consolidate company data.

What Is Product Master Data Management?

Product master data management within an MDM manages computer-aided design (CAD) data, manufacturing instructions, and engineering documentation, for example. Engineering teams use the tool to revise, track, and manage products and materials.

Product information management (PIM) outside an MDM focuses on centralizing product data to deliver consistent and accurate information across all delivery channels. Marketing often uses the tool to create materials for distribution online and offline.

PIM platforms are designed for collaboration. They enable individuals from throughout a company to develop product content that is accurate and consistent. It focuses on the digitization and automation of data for faster-to-market times and omnichannel delivery.

What Are the Differences Between a PIM and an MDM?

PIM manages product data. Product data is just one of the domains managed in an MDM implementation. Before product data can be placed in an MDM, organizations must identify what they consider to be their master data for each domain. They should detail the attributes that master data should share and then create data governance policies and procedures to maintain data quality.

Once the framework is established, companies can begin to locate the data to place in the MDM. Once the data is accessible through the MDM, businesses can use the information for analytical and transactional operations. Although product data may receive priority, the basic MDM architecture must be in place before data can be collected and stored.

Product information management solutions collect, consolidate, and enrich product data. The data may include the following:

SKUs
Pricing
Product descriptions
Owner’s manuals
Specifications

The stored data can be anything product-related. Some PIMs come with frameworks that can be customized for faster implementation.

PIMs facilitate collaboration on product content to deliver superior customer experiences. They often integrate with other systems for seamless navigation through multiple delivery channels.

MDMs work with data across multiple domains, while PIMs focus on product data. MDMs target internal operations for better decision-making and business growth. PIMs improve data quality for faster omnichannel release of product information and improved customer engagement.

What Are the Benefits of Product Master Data Management?

Product master data management collects, stores, and manages product information. Companies determine the data that appear in the product domain of an MDM. Master product data may include a product description but not a product image.

At its core, product master data management tools rely on a product information management tool. While an MDM focuses on relationships that can facilitate business growth, PIMs are looking to enrich data for improved customer experiences.

PIMs store product-related data. If the solution includes a digital asset management (DAM) solution, teams have access to digital assets as well as product information. Combining PIM and DAM functionality allows the integration of images and videos into product information for more engaging customer experiences.

Using a PIM for managing product data has the following benefits:

Centralizes product data and product-related digital assets in one location
Ensures data consistency and accuracy across an organization
Establishes product data owners responsible for updating product information
Shortens time-to-market for creating and managing marketing and sales materials
Reduces inaccurate data in external and internal materials

PIMs also provide a single source of truth and help automate processes for improved efficiency and enhanced data quality and security.

What Is the Master Data Management Process?

Every company and every MDM is different, so each implementation plan varies. However, most projects use the following master data management process steps:

Define what master data is for a business.
Identify all sources of master data.
Establish who in-house is responsible for creating, updating, and using the data.
Identify any third parties that will have master data management responsibilities.
Collect and analyze existing master data to identify gaps and discrepancies.
Define master data management roles and responsibilities for data owners.
Create and implement a data governance program.
Establish the master data model for the business.
Evaluate and choose an MDM solution.
Implement the new MDM solution.
Monitor the new MDM model.
Review and update process for continuous improvement opportunities.

While it’s not part of the defined process, organizations should assess their technical resources for master data management expertise. Many businesses look for individuals experienced in a specific MDM solution, while others look for people with experience in different master data management jobs. Some MDM providers may offer a master data management system tutorial to help a company develop resources to sustain the MDM software.

Having the necessary technical resources to install, support, and maintain any enterprise-wide system is crucial to its success. An MDM solution is no different. Without the needed resources, businesses may never realize the full potential of their investment.

What Is a Master Data Management Example?

The MDM market is projected to be one of the fastest growing through 2029. MDM solutions are already offered by companies such as SAP, IBM, Microsoft, and Oracle. Some companies, such as Pimcore and Syndigo, offer MDM functionality as part of their PIM solutions.

SAP’s MDM functionality comes through its Master Data Governance product. The solution can be deployed on-premise or in the cloud. It supports master data domains and includes pre-built data models.

Reltio is a cloud-native MDM platform. It supports MDM domains such as customer, employee, assets, location, and product data. Reltio has operated as a software-as-a-service (SaaS) company since its founding in 2011.

Other companies, such as IBM, offer support for on-premise, cloud, and hybrid implementations. Not all solutions offer all domains. Some allow businesses to select the domains they want to implement, while others require customers to purchase or license all domains.

Master data management systems are not for everyone. Many companies may never need overarching data management. They may find that integrating different solutions can provide the data governance required to collect, consolidate, control, and manage their information.

Do You Need an MDM?

It depends on your use cases. What are your business objectives? Are you looking to leverage company data for better insights on business operations? Are you looking to implement data governance policies? If so, an MDM may be the software you need.

However, if you are looking for ways to improve how your customers engage with your product, then a product information management solution may be a better option, especially if it has built-in digital asset management functionality.

If a PIM solution integrates with other solutions, such as CRM and PLM, you may be able to build a tech stack that provides the company-wide data governance you need. Many target solutions offer API connectivity to other back-office solutions.

A PIM solution may be the appropriate technology for your business if you are looking to:

Create a product catalog.
Improve time-to-market release of product information.
Eliminate duplicate and inaccurate data.
Establish a single source of truth.
Simplify data security.
Improve customer experiences.
Control unauthorized access.

Deploying a PIM that integrates into DAM, CRM, and PLM solutions enables businesses to manage their critical business data.

What Lumavate Offers

Lumavate’s Product Experience Management (PXM) platform allows businesses to create and manage their digital product experiences. Its solution has a built-in PIM, DAM, and digital experience platform (DXP) for ease of deployment.

The platform supports text messaging, a form builder, and integration functionality to over 40 back-end solutions. These capabilities extend PIM functionality to encompass comprehensive management of digital experiences.

Lumavate’s all-in-one solution enables manufacturers to manage their product data and digital assets, create and update digital experiences, and send targeted text messages to existing and potential customers. The platform provides the same capabilities to companies that sell or distribute physical products.

The solution is more than data management software. It supports QR codes for more engaging customer experiences, such as product registration or support documentation. The platform can collect lead information and monitor key performance indicators (KPIs) for continuous improvement.

Lumavate offers an end-to-end solution for product experience creation and management at a fraction of the cost of other solutions. Before investing in an MDM solution, consider Lumavate’s platform for managing product information management.