What is Master Data Management (MDM)?

What is master data? 

Master data definition: According to The DAMA Guide to the Data Management Body of Knowledge, master data represents "data about the business entities that provide context for business transactions."

Master data is the business-critical information about customers, accounts, organizations, suppliers, employees, locations, assets and products. Master data supports the transactional and analytical operations of the enterprise. Sometimes you'll hear master data referred to as "data domains" or "entity types" or "core data."

  • Fragmented, inconsistent and unreliable customer data isn’t good for business. Poor data quality can get in the way of driving revenue. It introduces error and risk as well as inefficiencies across functions such as sales, marketing, services finance.
  • Fragmented and inconsistent supplier data reduces supply chain efficiencies, negatively impacts spend control initiatives, and increases the risk of supplier exceptions.
  • Fragmented inconsistent product data slows time-to-market, creates supply chain inefficiencies, stifles growth, and drives up the cost of compliance.

Now that you understand the concept of master data, let's answer the question what is master data management?

What is master data management (MDM)?

Master data management (MDM) definition: A technology used by large companies to identify, collect, match and merge data to create a what is called a "single view of the data" or "single source of truth," which is the foundation for a digital transformation. It removes duplicates and standardizes master data, and it’s elements such as first name, last name, mailing address, phone and email address. Also, MDM incorporates rules to eliminate incorrect reference data from entering the system.

What is MDM at an enterprise level, exactly? And how can businesses introduce this tool into their enterprise infrastructure? By proactively managing master data, an organization will gain consistent, standardized, accurate and reliable enterprise data to run their business. A common requirement met by master data management is to gain a single view of customer (SVOC).

When managed in an MDM technology system, master data is often referred to as a "golden record." It is common to talk of where the data is "mastered". This is accepted terminology in the information technology industry, but care should be taken, both with specialists and with the wider stakeholder community, to avoid confusing the concept of "master data" with that of "mastering data"