Master Data Management Framework

A master data management framework helps organize all company data into one centralized, single source of truth. Master data, which is all essential data for running a company's business operations, must be maintained to prevent silos and other issues. That said, not all companies need a master data management framework and may benefit from other options, such as a product information management (PIM) solution instead. Here's everything companies need to keep in mind as they decide on the right tools to use to manage their data.

What Is Master Data?

Master data is simply all the core data that is essential for running business operations. Some of the most common kinds of master data include items such as:

Customer information
Supplier details
Prospect data
Hierarchy data
Charts of business accounts
Website data
Product data

Master data is non-transactional data. Non-transactional data necessary to run the business, such as the names of clients or the phone number for a vendor, need to be stored safely to prevent slowdowns in normal workflows.

Generally speaking, master data usually belongs to both the business and its IT department. They work together to ensure the data is uniform, has good semantic consistency, and is accurate.

The Three Types of Master Data

There are three main kinds of master data:

Product data: SKUs, a bill of materials, and other product details.
Customer data: Phone numbers, addresses, and other contact information.
Financial data: Standard financial information used for creating financial reports.

Some companies may also include employee, location, asset, materials, or supplier data in their master data management (MDM) process.

What Is Master Data Management? What Is a Master Data Management System?

A simple master data management definition is the process of ensuring all master data held by an enterprise is well-coordinated across that organization. With MDM, organizations can create uniform sets of data about their products, vendors, customers, and other items. A straightforward master data management example is collecting the names and addresses of customers and centralizing those within an MDM tool.

A master data management (MDM) solution centralizes all of the organization’s information in one place, making it easier to find and go through when necessary. An MDM solution provides a company with a single source for all information across the entire business, not just a single source for their common product data.

Not all organizations have MDM solutions in place, and there is a good reason for that. An MDM solution is typically an enterprise-wide deployment that is extensive to implement. For that reason, some organizations go with product information management (PIM) solutions instead. A PIM solution is much easier to implement within a shorter time frame and is a more useful implementation for organizations' marketing and sales teams.

Why Is Master Data Management Important?

Wondering why master data management is important? The simple reason is that MDM assists with the data management process.

What is the data management process? It's the process of:

Validating data
Storing data
Collecting data

Managing data in this way helps keep it secure and organized to meet regulations and create a single source of truth within the organization.

What Does a Master Data Manager Do?

A master data manager is in charge of monitoring the MDM system. Master data management roles and responsibilities include:

Defining and enforcing policies for managing data
Taking steps to secure data or creating policies to improve data security
Creating procedures to collect high-quality data

A person in this role may also be known as a data quality analyst.

What Are the Five Core Functions of Master Data Management?

Master data management (MDM) can provide several strong benefits to large enterprises that are able to appropriately implement an MDM process and related MDM solutions. There are several different ways to implement MDM as well as multiple MDM solutions that organizations will need to look into if they believe an MDM is right for them.

To determine if MDM is the right option, it's a good idea to look at the master data management scope and what it can do for an organization.

MDMs have five core functions that:

Work as a single view of all master data within the enterprise. With a single source of truth accessible in a centralized location, data silos are effectively eliminated.
Establish data governance policies and procedures to help protect and secure important organizational data.
Improve data quality across the business thanks to reducing redundancies.
Produce easier, and more accurate, data analysis for reports and decision-making.
Create the potential for machine learning or artificial intelligence to be implemented in the future, which can help save time and make the system more efficient.

What Are the Stages of Master Data Management?

Master data management process steps include:

Identifying all sources of master data
Identifying the organizations, individuals, vendors, or others who are producing data the company requires
Collecting data and analyzing it to determine if it should be stored as master data
Choosing a data governance program or setting up a council.
Selecting a master data model and tool
Designing the infrastructure of the MDM system
Testing the system
Modifying and maintaining the system as needed

Looking at these steps, it's clear why implementing MDMs requires a significant amount of time and effort. For smaller companies, a better alternative may be a PIM solution, which does not have the same level of requirements to get up and running.

The Different Types of MDM

There are a number of different approaches to master data management (MDM). Companies will need to choose the option that best suits their personal needs.

In general, there are four options:

Registry: This is often the preferred approach if a company has numerous disparate data sources. This approach involves all the data sources going into a centralized data repository where the data is cleaned, consolidated, and aligned. This approach doesn’t alter the original data since changes are made directly within the original source system rather than a separate MDM database. However, this approach can be very time-consuming and have data reliability issues.
Consolidation: This approach creates a “golden record” of all master data for the business and involves a team member verifying the accuracy of all golden records. All data changes are pushed from the MDM to the original data source. This approach does have increased reliability, but it can be very costly.
Coexistence: This approach allows the MDM database and original data sources to coexist in real-time without any delays in updating records from one system to another.
Centralized: With this approach, the MDM solution acts at the central repository, and other data sources subscribe to receive updates from it to ensure consistency. This approach makes the MDM the true system of record rather than solely providing a single view of data stored in other systems.

Using MDM as a Tool: What Are MDM Tools Used For?

A master data management (MDM) tool is a software solution that enables companies to have a single source of truth for all master data across the enterprise. Most MDM tools integrate with other third-party software solutions that may store some of the master data.

Since MDM solutions are comprehensive and intensive to implement, an MDM solution is only needed in vast enterprises where data management is highly complex and requires significant oversight by the business and IT support departments or vendors. Most companies do not need an MDM solution to effectively manage their key business data.

Instead, many companies benefit from simpler options such as Product Information Management (PIM) tools, Customer Relationship Management (CRM) solutions, and Product Lifecycle Management (PLM) platforms. These have similar functionality and can still effectively manage a company’s data.

What Is MDM Strategy?

MDM strategy looks at the kinds of core data used by a company as well as the domains that may have the greatest impact on the business. Once that data is identified, it's managed by the MDM tool, enhancing data quality, improving efficiency by reducing redundancy, and ensuring compliance with all data regulations. Master data management best practices include using the master data management architecture to use clean (and accurate) data about consumers, products, and suppliers to make all business decisions.

The MDM Competitive Landscape

There are a number of different master data management (MDM) software solutions for companies to evaluate before choosing the right option to manage their data.

This master data management tools list contains some of the top master data management tools on the market today:

Stibo Systems
Informatica
PiLog MDRM
TIBCO
Profisee
SAP
IBM
Reltio
Oracle
Microsoft

Some Product Information Management (PIM) solutions also offer MDM functionality, which is something to keep in mind. Simcore and Syndigo are two excellent options.

It's important to note that not every company needs an MDM solution. Only the largest enterprises with highly complex data needs generally need to worry about working with master data management companies to set up a master data management process within their organizations.

On the whole, most companies and businesses can work with simpler point solutions such as:

Product Information Management (PIM) tools
Customer Relationship Management (CRM) solutions
Product Lifecycle Management (PLM) platforms

These platforms typically provide more than enough functionality to manage a smaller company's data.

The Best Master Data Management Framework For Businesses

The best master data management (MDM) solution for an organization is going to depend on the company's current tech stack and future needs.

As an example, imagine that a company already has a substantial investment in SAP, IBM, Oracle, Microsoft, or other products. In that case, it probably makes the most sense to use one of those solutions for its MDM software. To determine the right path forward, companies should consider Gartner MDM reviews as well as G2 reviews when evaluating potential MDM solutions.

Product Information Management (PIM) Versus a Master Data Management System

A Product Information Management (PIM) solution's goal is to centralize all product information and data in one place. All digital assets related to a product go together, making it much easier to track that data across the system.

Product information is used across a wide variety of online and print product experiences including product catalogs, websites, sales materials, events, product packaging, and more, but that's just product data. When organizations look at master data management (MDM) solutions, they should understand that the MDM will centralize all of the organization’s information in one place, not just product data.

Unlike PIM solutions, MDM solutions typically require an enterprise-wide deployment. This kind of deployment is extensive to implement.

For organizations with less time or lower needs, a PIM solution is a better choice. It's easier to install and integrate, and it has more useful implementations for sales and marketing teams that regularly work with product data.

Do I Need Master Data Management?

It just depends on the company. Most manufacturers of physical products only need point solutions such as Product Information Management (PIM) tools, Customer Relationship Management (CRM) solutions, and Product Lifecycle Management (PLM) platforms. These systems have good functionality and will effectively manage most kinds of data for smaller organizations and businesses.

Essentially, an MDM tool can end up being overkill if the company isn't a very large enterprise. Remember, MDM solutions aren't designed to replace PIM, PLM, CRM, or ERP solutions, so starting off with those solutions first isn't a bad idea. Then, as the business grows, it's possible to move to an MDM that provides an overarching view of master data across the business.

In short: growing companies will always need to invest in PIM, CRM, ERP, and PLM solutions, even if they decide to use an MDM in the future.

What You Get With Lumavate

Lumavate is a Product Experience Management (PXM) platform that enables companies to create and manage everything related to their digital product experiences.

Why choose Lumavate?

Lumavate has:

A built-in Product Information Management (PIM) solution;
Digital Asset Management (DAM) functionality;
Text messaging;
A Digital Experience Platform (DXP);
A form builder; and
Over 40 additional integrations to make your life easier.

At Lumavate, we offer an all-in-one solution that provides companies that manufacture and sell physical products with every piece of technology they'll need to manage and organize their digital assets and product data, allowing them to create and update content containing product information at a moment's notice. With Lumavate, organizations can:

Send highly targeted text messages
Collect product registrations
Collect lead registrations
Do more with their data

Lumavate offers a breadth of solutions that no other platform on the market can, all while costing much less than its competitors. Ready to see Lumavate in action? Book a demo today to discover everything Lumavate can do for you.