Master Data Management Example

What Is Master Data?

Master data makes up the core information businesses use to manage operations efficiently. You can consider it the critical lifeblood of your organization's operational processes. Key to note, master data is not transactional data, but instead, serves as a steady reference point for all business activities.

While transactional data captures events such as sales, purchases, and payments, master data holds static information that rarely changes. It provides the context around which all other operational data revolves. Master data is the non-transactional data that underpins and directs your business, playing an integral role in shaping its operations and strategies.

Instead of assigning department leads to manage and handle master data, like you would with other operational data, the ownership resides in a partnership between business and IT departments. The collaboration ensures accuracy, uniformity, and semantic consistency, cultivating reliable decision-making and operational efficiency.

Master Data Examples

Master data encompasses a wide range of data assets that are crucial to your business. These examples include customers, prospects, suppliers, sites, hierarchies, and charts of accounts, among others. Each of these categories carries its own set of attributes that form the core information your business uses on a daily, weekly, monthly, and yearly basis.

Take, for instance, master data for suppliers. This data typically includes static or infrequently changing information such as names, contact details, and product lists, providing a comprehensive view of your supply chain. It's the foundational data that helps you understand who your suppliers are and the information rarely changes.

What Are the 3 Types of Master Data

The three cornerstones that dominate most master data systems include customer data, product data, and financial data.

Data points like phone numbers, emails, and purchase history are all examples of customer master data. Using this data, your organization can tailor personalized marketing strategies and maintain strong customer relationships.

Product data focuses on identifying and describing the goods or services your organization offers. This data includes product descriptions, specifications, pricing, and relationships with other products.

Financial data points that are considered master data include charts of accounts, general ledger codes, and cost centers. These data sets lay the foundation for financial reporting and analysis, enabling your organization to make informed decisions about budgeting, forecasting, and resource allocation.

While these are the most common, some organizations also incorporate employee, location, asset, materials, or supplier data into their MDM process. The scope of master data can vary based on your business needs, but these three categories often serve as the backbone of any MDM strategy.

Definition of Master Data Management

Master data management is the process of efficiently managing, organizing, and integrating master data into a single, reliable source of truth. It provides a unified, consistent view of the organization's information to all stakeholders. It involves establishing processes, policies, and technologies to create this unified view of master data.

An MDM solution isn't limited to product data; it encompasses all types of master data. From customer and financial data to location and supplier data, all non-static data is collected and stored in one location. As you can imagine, implementing an MDM solution is often an extensive enterprise-wide endeavor that requires careful planning and execution.

Alternatively, specialized solutions that target marketing and sales teams are easier to integrate into current processes. A Product Information Management (PIM) solution can be a more accessible and beneficial option. PIM allows these teams to manage all product data in a more efficient manner without the need for complex master data management software.

Why Do Businesses Need an MDM

The critical role of an MDM is centralizing your master data and providing a snapshot of your business data to all stakeholders. It creates a narrative and coherency to the vast amount of data points your business generates and interacts with daily.

An MDM software solution takes this a step further by consolidating data from multiple systems into a single, unified master data view. Your company is able to integrate multiple apps and other sources of data into your MDM solution. The consolidation eliminates data silos and provides a holistic view of your organization's information landscape.

In addition to centralizing and creating a distinct view of your master data, an MDM solution also contributes to a higher level of data governance and standardization across processes, applications, and systems. The easy access cultivates cross-department collaboration, enhancing decision-making and strategic planning.

MDM Framework

Every business should look at its needs to determine which master data management framework is best. So, what are the different types of MDM? While there are numerous approaches to MDM, the four most common are:

Registry

The Registry approach is often favored by companies dealing with multiple disparate data sources. In this model, all data sources feed into a centralized repository where the data is cleaned, consolidated, and aligned.

One of the key advantages of the Registry approach is its non-intrusive nature; it doesn't alter the original data. Instead, changes are made directly within the original source system rather than in a separate MDM database.

However, the process requires a significant amount of time to meticulously comb through data points and because of this, often leads to human error and data reliability issues.

Consolidation

Under the consolidation method, a main stakeholder creates a "golden record" of all master data. A person is responsible for verifying the accuracy of all your golden records.

Instead of having to manage and update your MDM solution and original data source simultaneously, all of your changes are pushed from the MDM to your original source automatically.

By decreasing the amount of human exposure, the system and data become more reliable. While you minimize errors with this approach, it can often be more costly to implement.

Coexistence

The Coexistence approach is a unique methodology that allows for the MDM database and original data sources to coexist in real time. There are no delays in updating records from one system to another, promoting seamless data flow and synchronization.

Both the MDM database and the original data sources can maintain their respective versions of the data while still being in sync. This means any changes made in one source are instantly reflected in the other

Centralized

Under this approach, the MDM becomes the true system of record for your business. It holds the authoritative version of your data, rather than merely providing a single view of data stored in other systems.

An MDM under this methodology acts as a central repository while allowing other data sources to subscribe to receive updates. This practice establishes reliability across all channels and marketing purposes.

Most Successful MDM Process

While there are numerous approaches to master data management (MDM), most companies tend to follow an MDM implementation process that is characterized by a set of common stages. The typical MDM process includes:

Define master data for your business. Companies must undertake a comprehensive audit of their internal processes to identify which data truly constitutes their master data. This critical step ensures the data deemed ‘master’ reflects the core operations and strategic objectives of the business.
Identify All Sources of Master Data. Organizations must then inventory all of their data sources, including internal systems like CRM, ERP, and HR systems, as well as external databases and third-party data providers.
Document who within your business externally creates, updates, and uses this master data. You'll identify all stakeholders within your company who will be responsible for the majority of creating, updating, and using the data within your MDM solution and document them for future accountability.
Understand current data structures and major data discrepancies. Collect and analyze your existing master data to identify and uncover underlying data structures and data discrepancies that will inform your future processes.
Appoint master data owners. Appoint a select few number of individuals within your business and IT departments that will be responsible for ensuring data integrity and compliance.
Create and implement a data governance program. To ensure your MDM remains relevant and consistent, establishing a data governance program is critical. This will include the processes and procedures that ensure your master data is standardized, approved for use, updated when required, and archived as needed.
Establish the master data model for the entire business. The data model will reflect the relationships between all your master data elements. The goal is to create a clear understanding of how this master data is used, stored, and integrated across systems.
Evaluate and choose a MDM solution. Once all necessary steps have been taken, you can then evaluate and select the most appropriate MDM solution for your business based on its features, scalability, and compatibility.
Implement the new MDM solution and new MDM model. Ensure a smooth and seamless transition by mapping your current data to the new MDM solution and model. Include training and onboarding materials to help all stakeholders involved.
Continually review your process. Review all your data governance, master data discrepancies, and opportunities for improvement to ensure your MDM processes remain relevant and effective.

What Are Master Data Management Tools?

A Master Data Management (MDM) tool is a software solution that allows you, as a business, to have a unified view of all master data across your enterprise. It essentially acts as a central hub, integrating with other third-party software solutions that may store some of the master data

The management of an MDM solution requires extensive support and technical knowledge. Without prior experience or technical stakeholders, an MDM solution becomes complex and unmanageable. The use of an MDM is only necessary for large enterprises who have large business and IT teams.

Most companies, including smaller marketing and sales teams, will benefit from targeted solutions that effectively manage specialized tasks. So, what tools are used in data management for smaller teams? Point solutions such as Product Information Management (PIM) tools, Customer Relationship Management (CRM) solutions, or Product Lifecycle Management (PLM) platforms offer ample functionality to effectively manage key business data.

These solutions can provide specialized data management capabilities tailored to specific business needs, often making them more economical and efficient than a full-scale MDM implementation.

The MDM Competitive Landscape

The competitive landscape for MDM is vast, with numerous software solutions available for companies to evaluate. So, what is an example of an MDM? Some of the top master data management tools include Stibo Systems, Informatica, PiLog MDRM, TIBCO, Profisee, SAP, IBM, Reltio, Oracle, and Microsoft.

Other services add MDM functionality to their core services like PIMcore and Syndigo. These Product Information Management (PIM) solutions focus on product data but have expanded their offerings to help centralize master data. While these companies aren't considered Master Data Management vendors, they can still help companies who need those services.

However, not every company requires an MDM solution. Only the largest enterprises with highly complex data needs should consider implementing an MDM. For most businesses, point solutions like PIM tools, Customer Relationship Management (CRM) solutions, or Product Lifecycle Management (PLM) platforms will be sufficient and more cost-effective. These solutions can be more tailored to specific business needs, often making them a more efficient choice.

PIM vs MDM

While both a PIM and master data management system help to centralize data for organizations, they both serve different purposes and have distinct functionalities.

A PIM solution is specifically designed to centralize the management of product information. This includes product data and digital assets, which are used across multiple channels including product catalogs, websites, sales materials, events, product packaging, and more.

A Master Data Management (MDM) solution encompasses all of an organization's information, including information about products. It provides a single, unified source for all information across the entire business, not just product data. An MDM solution is typically an enterprise-wide deployment and can be extensive to implement due to its comprehensive nature.

A PIM is easier to implement within your current operations and is designed to provide a specialized solution to product information. Sales, marketing, and customer service teams all benefit more from the tailored PIM approach.

Do You Need an MDM?

Determining whether your company needs MDM platforms largely depends on the size and complexity of your organization. For most manufacturers of physical products, point solutions such as Product Information Management (PIM) tools, Customer Relationship Management (CRM) solutions, and Product Lifecycle Management (PLM) platforms provide ample functionality to effectively manage your data.

Only extremely large organizations require the robust functionality an MDM tools list provides. For smaller marketing and sales teams, an MDM can complicate and slow down data management processes. MDM tools examples are not designed to replace PIM, PLM, CRM, or ERP solutions, but rather to supplement them by providing an overarching view of master data across the business.

Even if your company chooses to implement an MDM solution, you will still need to invest in PIM, PLM, CRM, or ERP tools. An MDM tool enhances these solutions by ensuring data consistency and accuracy throughout your organization, rather than replacing them entirely.

Expanding PIM Functionality

While a Product Information Management (PIM) solution is one of the top data management tools for manufacturers of physical products, the ability to centralize product information becomes truly powerful when this data can be seamlessly integrated into digital experiences, printed materials, and marketing efforts. PIM data needs to flow effortlessly to your company website, sales resources, channel partners, and beyond to become truly effective.

Most PIM solutions lack these built-in capabilities and instead require countless integrations with third-party software, or they demand custom-built solutions to enable product data to appear in digital experiences or other marketing materials. The result is a complex web of dependencies that can be challenging to manage.

Lumavate offers a built-in Digital Experience Platform (DXP) that automatically connects to its PIM solution and Digital Asset Management (DAM) functionality. This integration allows Lumavate users to create digital product experiences in mere minutes, pulling in all product data and related digital assets in real time.

A comprehensive solution like Lumavate streamlines the process of centralizing product information and utilizing it across marketing, sales, and customer service materials, without the need for any technical resources.

What Lumavate Offers

Lumavate is a Product Experience Management (PXM) platform that empowers companies to create and manage all aspects of their digital product experiences. It offers a comprehensive suite of solutions, including a built-in Product Information Management (PIM) solution, Digital Asset Management (DAM) functionality, a Digital Experience Platform (DXP), text messaging capabilities, a form builder, and over 40 integrations.

All companies involved in manufacturing and selling physical products will benefit from the centralized data repository and automatic digital experience builder that Lumavate provides. The company is an all-in-one solution with comprehensive technology that manages product data and digital assets, creates and updates digital experiences containing product information, sends highly targeted text messages, collects product registrations or lead registrations, and more.

What sets Lumavate apart is its breadth of solutions. No other platform offers the same range of capabilities at such a competitive price point. Compared to other platforms that offer far less functionality, Lumavate provides a superior solution at a fraction of the cost, making it a smart investment for businesses seeking to enhance their digital product experiences.