11/5/12 Master data management - Wikipedia, the f ree ency clopedia

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Master data managementFrom Wikipedia, the free encyclopedia

In computing, Master Data Management (MDM) comprises a set of processes, governance, policies,standards and tools that consistently defines and manages the master data (i.e. non-transactional data entities) of anorganization (which may include reference data).

An MDM tool can be used to support Master Data Management by removing duplicates, standardizing data (MassMaintaining), incorporating rules to eliminate incorrect data from entering the system in order to create anauthoritative source of master data. Master data are the products, accounts and parties for which the businesstransactions are completed. The root cause problem stems from business unit and product line segmentation, inwhich the same customer will be serviced by different product lines, with redundant data being entered about thecustomer (aka party in the role of customer) and account in order to process the transaction. The redundancy ofparty and account data is compounded in the front to back office life cycle, where the authoritative single source forthe party, account and product data is needed but is often once again redundantly entered or augmented.

MDM 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 ongoingmaintenance and application use of this information.

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

Contents

1 Issues

2 Solutions

3 Criticism of MDM solutions4 See also

5 References6 External links

Issues

At a basic level, MDM seeks to ensure that an organization does not use multiple (potentially inconsistent) versionsof the same master data in different parts of its operations, which can occur in large organizations. A commonexample of poor MDM is the scenario of a bank at which a customer has taken out a mortgage and the bankbegins to send mortgage solicitations to that customer, ignoring the fact that the person already has a mortgageaccount relationship with the bank. This happens because the customer information used by the marketing sectionwithin 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 ofrecord linkage is used to associate different records that correspond to the same entity, in this case the sameperson.

Other problems include (for example) issues with the quality of data, consistent classification and identification of

11/5/12 Master data management - Wikipedia, the f ree ency clopedia

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data, and data-reconciliation issues. Master data management of disparate data systems requires datatransformations as the data extracted from the disparate source data system is transformed and loaded into themaster data management hub. To synchronize the disparate source master data, the managed master dataextracted from the master data management hub is again transformed and loaded into the disparate source datasystem as the master data is updated. As with other Extract, Transform, Load-based data movement, theseprocesses are expensive and inefficient to develop and to maintain which greatly reduces the return on investmentfor the master data management product.

One of the most common reasons some large corporations experience massive issues with MDM is growth throughmergers or acquisitions. Two organizations which merge will typically create an entity with duplicate master data(since each likely had at least one master database of its own prior to the merger). Ideally, database administratorsresolve this problem through deduplication of the master data as part of the merger. In practice, however,reconciling several master data systems can present difficulties because of the dependencies that existingapplications have on the master databases. As a result, more often than not the two systems do not fully merge, butremain separate, with a special reconciliation process defined that ensures consistency between the data stored inthe two systems. Over time, however, as further mergers and acquisitions occur, the problem multiplies, more andmore master databases appear, and data-reconciliation processes become extremely complex, and consequentlyunmanageable and unreliable. Because of this trend, one can find organizations with 10, 15, or even as many as 100separate, poorly integrated master databases, which can cause serious operational problems in the areas ofcustomer satisfaction, operational efficiency, decision-support, and regulatory compliance.

Solutions

Processes commonly seen in MDM solutions include source identification, data collection, data transformation,normalization, rule administration, error detection and correction, data consolidation, data storage, data distribution,data classification, taxonomy services, item master creation, schema mapping, product codification, data enrichmentand data governance

The tools include data networks, file systems, a data warehouse, data marts, an operational data store, data mining,data analysis, data virtualization, data federation and data visualization. One of the newest tools, virtual master datamanagement (also called virtual mdm) utilizes data virtualization and a persistent metadata server to implement amulti-level automated MDM hierarchy.

The selection of entities considered for MDM depends somewhat on the nature of an organization. In the commoncase of commercial enterprises, MDM may apply to such entities as customer (Customer Data Integration),product (Product Information Management), employee, and vendor. MDM processes identify the sources fromwhich to collect descriptions of these entities. In the course of transformation and normalization, administratorsadapt descriptions to conform to standard formats and data domains, making it possible to remove duplicateinstances of any entity. Such processes generally result in an organizational MDM repository, from which allrequests for a certain entity instance produce the same description, irrespective of the originating sources and therequesting destination.

Criticism of MDM solutions

The value and current approaches to MDM have come under criticism due to some parties claiming large costs and

low return on investment from major MDM solution providers.[1]

11/5/12 Master data management - Wikipedia, the f ree ency clopedia

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See also

Reference data

Master dataRecord linkage

Data stewardData visualizationCustomer data integration

Data IntegrationInformation as a service

Product information managementIdentity resolution

Enterprise Information IntegrationLinked data

Semantic WebData governanceOperational data store

Form, fit and functionSingle Customer View

Multi - Data Domain MDM (http://tdwi.org/blogs/philip-russom/2011/08/state-of-multi-data-domain-mdm.aspx)

References

1. ^ Margulius, David L. (2005-10-14). "Mastering data comes at a price | Platforms"(http://www.infoworld.com/t/platforms/mastering-data-comes-price-604) . InfoWorld.http://www.infoworld.com/t/platforms/mastering-data-comes-price-604. Retrieved 2010-08-27.

External links

Master data management (http://www.dmoz.org/Computers/Software/Master_Data_Management/) at theOpen Directory Project

Microsoft: The What, Why, and How of Master Data Management (http://msdn2.microsoft.com/en-us/library/bb190163.aspx#mdm04_topic4)

Microsoft: Master Data Management (MDM) Hub Architecture (http://msdn.microsoft.com/en-us/library/bb410798.aspx)PolarLake: Reference Data Management (RDM) and Governance (http://www.polarlake.com/reference-

data-management/introduction)

Open Methodology for Master Data Management(http://mike2.openmethodology.org/wiki/Master_Data_Management_Solution_Offering)

Semarchy: Why do I Need MDM? (Video) (http://www.semarchy.com/overview/why-do-i-need-mdm/)

MDM Community (http://www.mdmalliancegroup.com/)

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Categories: Database management systems Business intelligence Data management Data warehousing

11/5/12 Master data management - Wikipedia, the f ree ency clopedia

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