Product Master Data Management

We live in an era of data — ever-increasing amounts of information — that needs to be managed, stored, analyzed, and properly utilized to ensure it doesn’t simply become distracting noise. Data that is controlled and managed can help businesses find new opportunities, change elements that aren’t working, and make the best use of their assets. Data that are improperly managed can drown a company in irrelevance, redundant work, and inefficiency.

Businesses today manage all types of data from various sources, but not all data is created equal. Some of it changes daily, while other core data remains more constant and relevant to the underpinnings of the business. The foundational information — including principals, definitions, and assets — that defines a business is sometimes referred to as “master data.”

What Is Master Data?

Master data, sometimes referred to as “golden information,” is the core information necessary for an organization to exist. While it may vary from company to company depending on the business or the industry, master data needs to be accurate, consistent, and uniform, so it can eliminate the improper formatting roadblocks that can impede proper data sharing in an organization and cause a degradation in data over time.

A company’s master data examples might include lists of customers, suppliers, physical sites, organizational hierarchies, and the accounting principles an organization uses. Master data is often managed differently from transactional data, which represents an organization’s day-to-day activities such as sales, payables, regular banking transactions, and more. It’s also managed differently from analytical data, which are the conclusions drawn from the analysis of information.

Transactional data and analytical data will be “owned” by the departments that engage in daily activities — sales, for example, or accounting. Master data is typically owned and managed in partnership between the business and its IT department or partner to ensure accuracy and uniformity (although other departments may also use this information). Master data on customers, for example, would include the customer's name, address, phone number, website, and other relatively unchanging elements. Master data for finance would include when the annual report is prepared and how.

What Are the 3 Types of Master Data?

In general, there are three types of master data: customer data, product data, and financial data. We’ll outline the primary master data examples more specifically below.

Customer data. Customer data includes all pertinent contact information for customers and prospects. This core information is considered master data because if — as an example — a customer changes their billing address in an online portal, that information must be updated in the master customer database so accounting can know where to send invoices.

Product data. Product data tracks the core information about each product a company might offer. This would include SKUs, materials, pricing, technical specs, and other relevant (and relatively unchanging) information about the products. If a company changes product pricing, for example, this information must be updated in the master data, so customers are charged the correct amount.

Financial data. Financial data includes the information necessary for reporting a company’s numbers, such as how and when financial reports are prepared according to accounting standards.

In addition, some companies may also include employee data, location information regarding business sites, assets, materials, or supplier data in their master data management framework.

What Is a Master Data Management Solution?

Because consistency of master data is important for business operations, many companies choose to use a Master Data Management (MDM) platform, which is a software solution that allows companies to maintain a single view of all master data across the organization to support better decision-making as well as business consistency. The goal of MDM should be to create a unified data framework that shares accurate and consistent information across the company and any outside partners that require it. Most MDM tools are designed to be integrated with other third-party software solutions that may store some master data: operations rules, for example, or accounting practices.

A master data management process supported by a software solution is usually an enterprise-wide initiative that is extensive to implement and often very costly. Master data management vendors frequently design their products for very large enterprises. While the very largest organizations may require dedicated MDM solutions, most smaller companies can engage in master data management with the use of a product information management (PIM) software solution. In general, PIM solutions are easier to implement, more affordable, and will accomplish the same tasks as a dedicated MDM solution.

The Importance of Master Data Management

Regardless of what solution a company uses to manage its master data, the master data management process itself is critical because it provides a centralized and consistent view of master data across the business. An MDM solution will consolidate data from multiple systems, locations, and operations into a single 360-degree data view that can be used across the company as a single source of truth. Additionally, MDM can provide a higher level of data governance; standardization across processes, applications and systems; and collaboration and data sharing across different departments and locations. Proper data governance includes policies and standards that enforce data quality during the collection of the data and maintain data integrity over time.

The Importance of Product Master Data

As mentioned previously, product master data is the core data for all products a company sells and is an essential part of the overall master data management strategy. This product information, which doesn’t really change on a day-to-day basis, might include SKUs, product descriptions, materials, technical specifications, pricing structure, and other core information.

While product master data management can be accomplished using an MDM solution, smaller companies can effectively use a product information management (PIM) solution to centralize the management of master product data alongside related digital assets that support the product. For small to mid-sized companies (SMBs), PIM solutions are easier to implement, more affordable, and more useful for marketing and sales teams when compared to enterprise-wide MDM solutions.

The Benefits of Product Master Data Management: What Is an Example of Master Data?

The primary goal of product master data management is to create a single location to store and manage all product information. While this includes technical specs, it also includes marketing- and sales-focused information such as pricing, features, benefits, dimensions, functionality, product images, videos, operator manuals, troubleshooting guides, and more. Keeping this information — both product master data, and marketing and sales supporting materials — together centralizes the information in a way that allows the entire company to use it as a single source of truth.

Product master data can be easily stored in a Product Information Management (PIM) solution. PIM solutions often include a built-in Digital Asset Management (DAM) solution that allows companies to more easily manage product-related images, documents, videos, and more.

What Are the Benefits of Using a PIM Solution for Master Data Management?

Using a PIM solution for managing product master data is often easier and more cost effective than using a dedicated MDM solution. Additionally, PIM solutions used as data modeling tools can provide the following benefits:

Core MDM functionality. While there are numerous approaches to master data management, most companies require the following: the definition of master data for the business, the sources of the master data, and documentation regarding the responsibility (both internal and external) for creating, updating, and using master data.

Data Analysis. The PIM can also collect and analyze all existing master data to better understand data structures and identify discrepancies.

Appoint master data owners. Similar to an MDM, a PIM solution can be used to designate the “owners” of product master data to ensure that the right people and departments are the ones maintaining control of the information.

A data governance program. A PIM solution can help a company establish critical data governance policies and procedures, which need to be in place before a company begins doing business (or very early in the process, in any case). In addition, it can continually review the data governance and any discrepancies that arise, and identify new opportunities for improvement.

Establishment of a master data model. A master data model is a framework that defines business concepts and organizations, and how they interact with one another. The ideal model should use well-defined business terms and establish definitions for less well-understood terms. The focus of the master data model should be to simplify all terminology and concepts to better serve the business interests, goals, and purpose.

The Importance of MDM and Integration

Most MDM tools are designed to integrate with other third-party software solutions that may store some of the master data. These solutions might include customer relationship management, finance and accounting, sales and marketing platforms, and more.

Who Needs an MDM Strategy?

The answer is “all companies,” but how they achieve the strategy will vary. The very largest organizations will often choose a dedicated MDM solution since master data management in these large multinational organizations is extremely complex and requires significant oversight by the IT department. For large multinational organizations, a confusing set of international laws often applies to operations, making centralized and dedicated management of master data critical.

For small to mid-sized organizations, an MDM solution is not always necessary to effectively manage key business data. For a majority of companies that fall into the SMB category, point solutions such as Product Information Management (PIM) tools, Customer Relationship Management (CRM) platforms and Product Lifecycle Management (PLM) platforms provide more than enough functionality to effectively manage the company’s master data.

The MDM Competitive Landscape: What Is an Example of an MDM, and What Are MDM Tools?

There are numerous MDM software solutions on the market today for companies to evaluate. Some of the top master data management tools include Stibo Systems, Informatica, PiLog MDRM, TIBCO, Profisee, SAP, IBM, Reltio, Oracle, Microsoft, and others. These MDM tools examples are often large, expensive, and difficult to implement and integrate. Often this means they may only work for the largest of organizations with the deepest pockets and the most extensive IT resources.

Smaller organizations are well suited to solutions that keep track of both master data as well as product information, offering both a place to centralize product data and select master data management fields and tools. While master data management tracks and centralizes all of a company’s important data, a product information management (PIM) solution centralizes product data. Since the functionality is similar, a PIM solution can actually serve as an MDM in many cases, negating the need for some of the more expensive top MDM tools from the MDM tools list highlighted above.

In fact, some product information management (PIM) solutions also offer MDM functionality as a feature, including Pimcore and Syndigo. Point solutions such as PIM tools, customer relationship management (CRM) solutions, and product lifecycle management (PLM) platforms will usually provide more than enough functionality to effectively manage an SMB’s critical data.

Understanding PIM vs MDM: What Is Product Master Data Management, and What Are the Benefits of Product MDM?

Companies in the market for a viable solution may wonder what is the difference between PIM and MDM. A product information management (PIM) solution is designed to centralize the management of product information including product data and digital assets. This 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.

A master data management (MDM) solution, on the other hand, will centralize all of an organization’s information, including non-product-related information pertinent to accounting, sales, customers, and employees. In effect, an MDM solution provides a company with a single source for all information across the entire business, not just its product data. Large, dedicated MDM solutions typically involve an enterprise-wide deployment that is time-consuming (stretching into many months), and costly (hundreds of thousands of dollars).

For many organizations, the choice of PIM solution makes more sense: PIM solutions are easier to implement, more affordable, and serve as a more useful resource for sales and marketing teams. Many of the PIM solutions on the market today contain master data management tools that can help organizations keep track of data necessary for operations.

Why You Need More Than a PIM: Product MDM vs PIM

While a product information management (PIM) solution is a must-have for every manufacturer of physical products, the centralization of product information is only useful if it can be easily shared and used to create digital experiences, printed materials, channel partner marketing efforts, content marketing, and more. It’s more than about having the data: it’s about using the data.

Accurate product data stored in a PIM is a great start. However, product data needs to be organized in a way that makes the information useful to web development efforts, sales operations, marketing departments, channel partners, and more. Most PIM solutions don’t offer this built-in functionality and instead rely on numerous integrations with third-party software solutions that provide this extra functionality. They may even rely on customers to build their custom integrations to enable product data to be available to build digital experiences or other marketing materials. This means that a company purchasing a standalone PIM solution will need extensive and costly IT resources, including the use of code, to implement and manage.

Another product data master example includes Lumavate’s Product Information Management PIM solution, which offers several built-in integrations that allow it to be up and running quickly — and affordably. Lumavate features a built-in Digital Experience Platform (DXP) that automatically connects to Lumavate’s PIM solution and Digital Asset Management (DAM) functionality. This allows Lumavate users to create digital product experiences in minutes that dynamically pull in all product data and related digital assets in real time. A complete solution like Lumavate makes it seamless for companies to centralize product information and use it to create marketing, sales, and customer service materials without the need for technical resources.

A Full Featured Product Experience Management (PXM) Solution

Lumavate is a Product Experience Management (PXM) platform that enables companies to create and manage everything related to their digital product experiences. Lumavate features a built-in Product Information Management (PIM) solution, Digital Asset Management (DAM) functionality, Digital Experience Platform (DXP), text messaging, and form builder, as well as more than 40 integrations.

Essentially, Lumavate is a highly affordable all-in-one solution that provides companies that manufacture and sell physical products with all the technology they need to effectively manage their master product data and digital assets, create and update digital experiences containing product information, send highly targeted text messages, collect product registrations or lead registrations, and more. Simply put, there are no other platforms that offer the breadth of solutions that Lumavate does for a fraction of the cost of other product master data management options.

For more information on Lumavate’s PIM solution and to better understand why master data management is important, take a tour of Lumavate’s extensive product master data attributes or book a demo.