Master Data Management

In business, master data management (MDM) comprises the processes, governance, policies, standards and tools that consistently define and manage the critical data of an organization to provide a single point of reference.

The data that is mastered may include:

In computing, a master data management tool can be used to support master data management by removing duplicates, standardizing data (mass maintaining), and incorporating rules to eliminate incorrect data from entering the system in order to create an authoritative source of master data. Master data are the products, accounts and parties for which the business transactions are completed. The root cause problem stems from business unit and product line segmentation, in which the same customer will be serviced by different product lines, with redundant data being entered about the customer (a.k.a. party in the role of customer) and account in order to process the transaction. The redundancy of party and account data is compounded in the front to back office life cycle, where the authoritative single source for the party, account and product data is needed but is often once again redundantly entered or augmented.

Master data management has the objective of providing processes for collecting, aggregating, matching, consolidating, quality-assuring, persisting and distributing such data throughout an organization to ensure consistency and control in the ongoing maintenance and application use of this information.

The term recalls the concept of a master file from an earlier computing era.

Master data management (MDM) is a comprehensive method of enabling an enterprise to link all of its critical data to one file, called a master file, that provides a common point of reference. When properly done, master data management streamlines data sharing among personnel and departments. In addition, master data management can facilitate computing in multiple system architectures, platforms and applications.

At its core Master Data Management (MDM) can be viewed as a "discipline for specialized quality improvement" defined by the policies and procedures put in place by a data governance organization. The ultimate goal being to provide the end user community with a "trusted single version of the truth" from which to base decisions.

At a basic level, master data management seeks to ensure that an organization does not use multiple (potentially inconsistent) versions of the same master data in different parts of its operations, which can occur in large organizations. A typical example of poor master data management is the scenario of a bank at which a customer has taken out a mortgage and the bank begins to send mortgage solicitations to that customer, ignoring the fact that the person already has a mortgage account relationship with the bank. This happens because the customer information used by the marketing section within the bank lacks integration with the customer information used by the customer services section of the bank. Thus the two groups remain unaware that an existing customer is also considered a sales lead. The process of record linkage is used to associate different records that correspond to the same entity, in this case the same person.

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Wikipedia