Master data is the consistent and similar type of set of identifiers and extended attributes that forms the core elements of the enterprise that includes the customers, prospects, citizens, sites, hierarchies, suppliers, and the details of accounts.
Master data Management (MDM) is the effort made by an organization to create one single master reference source for all critical business data that will result in less number of errors and reduction in redundancy in business processes.
MDM solutions consist of broad range of data cleansing, transformation, and integration practices. As data sources are added to the system, MDM starts processes to identify, collect, transform, and repair data. As the quality of the data is improved and is of the desired standard, schemas, and taxonomies are created to get the desired high quality master reference. The organizations that have MDM, incorporated in their working they have better opportunity of providing customer experience. An error free and complete data helps in better decision making and thus the growth of the business is better and as expected.
It can be explained as the core basics of your business’s process. Like the suppliers, buyers, and locations are the master data domains. Theses are the data assets that are managed within the business. The master data domains is further classified in sub- domains, like the party domain will consist of the sub- domains like the customer, supplier, sales person and employee. Thus it is clear that is crucial to the business and therefore it has to be managed without any errors and here the Master Data Management comes in the picture.
Importance of Master Data Management:
Organizations have immense data and as they grow the data increases. Huge amount of resources is required and spent to prepare the data and gain insights. It takes a lot of efficient efforts and resources of the business to get the data. Thus is this very data is not managed or has errors then the resources gets wasted.
There are certain data related challenges and thus it has all the reasons for which it needs to be managed:
- Inconsistent data across the value chain- organizations have data in various domains, across functions and thus getting a single view is difficult, for decision making and therefore the need of data management arises.
- Lack of process orchestration and data governance- organizations need to maintain data integrity and security and have no collaborative authorization of data. Thus in order to make organizational policies data management is needed.
- Authentic data manipulation- maintaining the huge data from the present and past is a huge task. It is also very challenging and this to not affect the authenticity of the organization with regard to the master data, it is required to manage it with great efforts.
- Absence of cross- domain relationships- the domain masters are not related and thus to use operational intelligence it gets difficult and the business process gets hampered thus it is required to maintain the master data.