Reltio Glossary

Master Data Management Definition

01
What is Master Data Management?

What is master data? 

Master data definition: customer, account or organization, supplier, employee, location, asset and product data is business-critical information that is often referred to as “master data.” 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. It 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 data from entering the system.

By proactively managing master data, an organization will gain consistent, standardized, accurate and reliable 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 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"

02
What is Gartner’s definition of master data management?

Gartner’s definition is, “Master data management (MDM) is a technology-enabled discipline in which business and IT work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the enterprise’s official shared master data assets. Master data is the consistent and uniform set of identifiers and extended attributes that describes the core entities of the enterprise including customers, prospects, citizens, suppliers, sites, hierarchies and chart of accounts.”

03
What types of data are managed by master data management systems?

The core data that is used by multiple systems, including:

  • People Customers, Prospects, Employees, Members, Healthcare Providers, Supplier and any other parties that are important to your business
  • Accounts Companies or Organizations
  • Products Finished goods, assets, parts and materials
  • Places Locations of stores, warehouses, deliver points, or other sites

Multidomain (or Multi-Entity) MDM is a system that can manage multiple types of master data in a single solution.  It is more valuable because it enables companies to get visibility into the relationships between different types of master data and answer questions such as, “Which products does this customer buy? Which supplier provides these products or provides the parts for us to make this product? What are this customer’s favorite store locations?

04
What problem does master data management solve?

It solves the problem created by data that is siloed across multiple applications and systems such as marketing, sales, customer service, mobile apps, web apps, compliance reports, and analytical apps. The result is no single source of truth of reliable customer data, or product data, or supplier data for example.

The impact of these data silos is: 

  • Data remains dirty with millions of duplicates and inaccuracies like bad addresses, phones – not just about the customers but about employees, and suppliers. The product data itself is old and leads to poor order processing
  • Departments work with their own version of the data, with their disconnected applications and create more silos
  • Business decision-makers are not getting the information they need
  • IT finds it harder to deliver to business in a timely manner
  • It is harder to connect with external data, technologies, and people in an increasingly regulated environment
Silos Of Data Across Systems
05
What is master data management used for?

MDM provides the source of truth for business-critical data. It eliminates costly redundancies that occur when companies rely upon multiple, conflicting sources of information. For example, when a customer changes their address, MDM can ensure that the systems used by sales, marketing, or finance are updated with the new information. Large companies in particular suffer from having multiple sources of information, which is very costly.  Master data management supports efficient processes and can help prevent transaction failures in complicated processes such as “order-to-cash”. See the examples below.

 

Support Efficient Processes

Legacy MDM Support Efficient Processes
Manage single view of customer (SVOC) Regulatory compliance reporting
Record includes: Name, address, phone, email address Reduce duplicate mailing cost
Standardizes key data elements Cross-sell and up-sell
Data integration, quality and consolidation Mergers and Acquisitions (M&A)
Identity resolution and duplication of customer records Consolidate statements and bills
Avoid transaction failures
06
Who needs MDM?

Large, complex companies with multiple products or services, divisions, brands or channels need MDM. It can also help companies that acquire, merge or divest parts of their business because they will likely face challenges with duplicate data. MDM can accelerate the speed-to-value of an acquisition.

07
What are the top concerns about legacy MDM systems?

Most master data management systems were designed 10-15 years ago, when the requirements weren't as complex as they are today. The top 3 concerns about legacy MDM systems are:

  1. They are too slow
  2. They are constrained and lack scale
  3. They are rigid

Unfortunately, they are not designed to power digital customer experiences.

Legacy MDM systems are not designed to deliver on current business requirements. They are slow.  It takes too long to set up a new MDM solution.  The upgrades are very time-consuming, really costly, and it is really hard to maintain the systems on an ongoing basis.  For example, adding a new data source or adding a new attribute to a customer profile takes months.  So responding to the business needs takes far too much time.

The need for data has grown exponentially and business people need access to more than the limited number of attributes that are considered “customer master data.” It’s not enough to just have access to a customer’s first name, last name, e-mail addresses, and phone numbers.  It’s valuable to have access to big data interactions and transactions to deepen customer understanding. And it’s critical to manage the data at scale, with thousands of attributes from hundreds of sources. Legacy MDM systems were not designed to do that. Legacy MDM systems are also not designed to deliver real-time data at scale, which is a requirement for digital and mobile experiences.

Third, legacy MDM systems do not deliver insights-ready data.  If the data science or analytics team needs data, they have to spend a lot of time in ETL in doing data cleanup.  They are not able to leverage their investments in newer technologies such as AI/ML.

Check out this blog to read more about why companies are replacing Legacy MDM: Say Goodbye to Legacy MDM, Say Hello to Reltio Connected Customer 360 to Power Connected Experiences 

 

Concerns with Legacy MDM

Slow Constrained Rigid
Takes too long to setup and go live, upgrades are painful and costly, high TCO Can't scale to billions of customer profiles Unable to gain a rich understanding of your customer base for hyper-personalization
Slow to respond to business needs because it's difficult to add new data sources, profile attributes and compliance requirements Can't scale to handle customer profiles with 1000s of attributes, transactions and interactions from 100s of data sources Stalls your transformation while adding to your legacy burden
Slow to turn insights into action Not designed to manage a network of relationships Doesn't add value to your ML and AI investments
Cannot operate in real time at scale
08
What is the “Evolution of MDM”?

Malcolm Hawker is the Senior Director Analyst at Gartner who focuses on Data and Analytics. He leads the Master Data Management team including Simon Walker and Sally Parker. Malcolm recently authored a blog titled, “The Evolution of MDM” where he wrote,

“MDM platforms are embracing a broader set of technologies around matching and data governance that are increasingly blurring the lines that distinguish MDM software from other platforms –  especially CDP’s. If entity resolution, hierarchy/relationship management, and the generation of gold master records are the ‘foundation’ of the MDM house, then it’s a foundation that is increasingly shared with other technologies.

This raises interesting questions about the nature of the MDM market – including the potential convergence of MDM platforms with other platforms and increasing competitive pressure on MDM vendors.

Thanks to the push to the cloud, these convergences could even extend outside the software world and into areas such as master or reference data as a service.”

09
Where can I find a master data management vendor evaluation?

Get a Complimentary Copy of The Forrester Wave™: Master Data Management, Q1 2019:” The 12 Providers That Matter Most And How They Stack Up

“In our 29-criterion evaluation of master data management (MDM) providers, we identified the 12 most significant ones — BackOffice Associates, EnterWorks, IBM, Informatica, Magnitude Software, Pitney Bowes, Reltio, Riversand, SAP, Semarchy, Stibo Systems, and TIBCO Software — and researched, analyzed, and scored them. This report shows how each provider measures up and helps enterprise architecture (EA) professionals select the right one for their needs.”

Michele Goetz is the Vice President & Principal Analyst at Forrester serving enterprise architects, chief data officers, and business analysts trying to navigate the complexities of data while running an insight-driven business. Her research covers artificial intelligence technologies and consultancies, semantic technology, data management strategy, data governance, and data integration.

“Vendors in the Forrester MDM Wave needed to meet enterprise scale requirements demanded by more diverse ecosystems within traditional environments as well as big data and the cloud. So, as you embark on the MDM journey and begin to evaluate vendors and their tools, don’t overlook the innovations being introduced in favor of a workhorse. To do so means that your MDM effort will be out of date and misaligned with business scenarios quickly after launch.”

Henrik Gabs Liliendah is a Data Quality, Data Governance, Multi-Domain Master Data Management (MDM) and Product Information Management (PIM) professional. He has a linkedin group and tracks MDM solution providers in The Disruptive MDM/ PIM / DQM List

 

For a quick read, check out this Solution Brief: Compare the Capabilities of Legacy MDM and Reltio Connected Customer 360, which is a cloud-native SaaS responsive data management platform compares to legacy master data management systems.

Compare capabilities such as:
1) Scalability
2) Support for Real-time Operations
3) Architecture
4) Deployment and Upgrades
5) Relationships
6) Machine Learning
7) User Interface
8) Consent Management
9) Workflow
10) Support for Transactional Data
11) Search & Segmentation
12) Data Science & Analytics
13) Contextual Records

MDM Chart
10
Why are companies saying goodbye to Legacy MDM?

Most companies have accelerated their digital transformation. And, their legacy MDM system is holding them back.
Transformations require real-time data at scale to drive initiatives such as:

  • Enable connected customer experiences across digital and human interactions
  • Drive hyper-personalization at scale
  • Accelerate real-time operations at scale
  • Simplify compliance with emerging privacy laws, consent and communication preferences
  • Enable direct-to-consumer (D2C) engagement
  • Power digital innovation and accelerate revenue from new idea
  • Prevent revenue leakage and risk of storing data across multiple systems
11
What are the new requirements for customer data that powers transformations?

What Global 2000 companies need now is a responsive data management platform that delivers connected customer 360 profiles to power their transformations. Their goal is to manage billions of holistic up-to-date, and actionable customer profiles to power real-time operations at scale with 24/7 support out of the box. It starts with a single view of the customer (SVOC), but that’s only the beginning.

Connected Customer 360 Profiles are enriched with 1000s of attributes including:

  • Relationships among B2C and B2B customers, between customers and employees (eg. store associates, brokers, agents, reps, CSMs, etc), products and locations
  • Omnichannel Transactions and Interactions including functions, channels brands and geographies
  • Actionable Insights from Data Science and Analytics including preferences, behavior and intent
  • Consent & Communication Preferences by brand, channel or topic of interest

Connected Customer 360 Profiles are managed in a highly secure and compliant cloud-native SaaS data platform with disruption free upgrades. A Customer Success Manager (CSM) works with you to achieve business value milestones.

12
Why do business and IT professionals choose Reltio Connected Customer 360?

Reltio Connected Customer 360 lives at the interaction of IT and business needs. It resolves identities, builds profiles with 1000s of attributes and has powerful segmentation capabilities.

It empowers IT professionals with three critical capabilities:

  • Gain business agility to deliver value fast
  • Operate in real-time at enterprise scale
  • Discover actionable insights for big ideas
13
How does Reltio Connected Customer 360 deliver business agility?

It allows them to quickly build and launch new digital experiences powered by Connected Customer 360 profiles.  It empowers them to be more responsive to the needs of your business stakeholders.

Because it’s a SaaS responsive data management platform, it’s available on day one and you can go live with production very quickly. Reltio provides three releases a year, and all these are updated automatically with no disruptions.  All customers are always on the latest release.  It allows you to quickly onboard new data sources - if you are buying a new third-party data or you are connecting to a new system.  If you have to add a new attribute, if you have a change an attribute, if you have to remove an attribute for customer profiles, you can do that without downtime.

Deliver Value Fast

  • Accelerate time-to-value, lower TCO, upgrade without disruption
  • Quickly onboard new data sources to enrich Connected Customer 360 Profiles with preferences and sentiments while respecting compliance requirements
  • Add, change, or remove customer profile attributes without downtime
  • Empower app developers to quickly build and launch new digital experiences fueled by Connected Customer 360 Profiles
14
How does Reltio Connected Customer 360 deliver enterprise scale?

Reltio Connected Customer 360 provides the scalability to manage billions of connected customer profiles. Each customer profile can have thousands of attributes, nested attributes, with their relationships, with the transactions and interactions. This information can come from hundreds of data sources to one place and give you that unified, preference-rich, connected customer profile.  System performance allows you to operate in real-time, at a scale, 24/7, with thousands of users.

15
How does Reltio Connected Customer 360 enable big ideas?

Reltio Connected Customer 360 can be used to launch your big ideas, launch your new products, introduce new business models. For example, pay-for-performance in healthcare or subscription-based services, just like Airbnb and Netflix.  Once you have your data in place and mission-critical data foundation ready, you can operationalize your transformation initiatives.  This is where your digital transformation roadmap starts with connected customer data. Then, you can fuel all your ML and AI investments with this data, whether it is to understand more about the customers and determine the next best action for a customer or to launch new services for your customers.