18.12.2024 | BJÖRN BAYARD
Master Data Management (MDM) is an elementary component of the digital value chain, but it is not limited to a specific data domain like other software disciplines. While product information management (PIM) systems manage product information and descriptions, and customer relationship management (CRM) systems maintain and provide customer data, MDM provides a consolidated view of all central master data – this can be product, customer, location, or supplier data.
The data must always be correct and up to date and be readable,
accessible, and interpretable for all relevant data recipients.
The idea of MDM is to make these elementary information modules centrally available to all business areas and to ensure that system-specific differences in data storage are equalised. For example, addresses may be recorded differently in ERP than in CRM, which can easily lead to data quality problems. MDM neutralises these differences by providing a uniform data view.
Corresponding requirements can be derived from this unified data view. The data must always be correct and up to date and be readable, accessible, and interpretable for all relevant data recipients. Due to the central importance and holistic overall perspective of MDM, relevant data recipients are, for example, business intelligence (BI) and analytics applications that link the information accordingly and prepare it in a comprehensible and role-specific manner.
18.12.2024 | BJÖRN BAYARD
Master Data mManagement (MDM) is an elementary component of the digital value chain, but it is not limited to a specific data domain like other software disciplines. While product information management (PIM) systems manage product information and descriptions, and customer relationship management (CRM) systems maintain and provide customer data, MDM provides a consolidated view of all central master data – this can be product, customer, location, or supplier data.
The data must always be correct and up to date and be readable, accessible, and interpretable for all relevant data recipients.
The idea of MDM is to make these elementary information modules centrally available to all business areas and to ensure that system-specific differences in data storage are equalised. For example, addresses may be recorded differently in ERP than in CRM, which can easily lead to data quality problems. MDM neutralises these differences by providing a uniform data view.
Corresponding requirements can be derived from this unified data view. The data must always be correct and up to date and be readable, accessible, and interpretable for all relevant data recipients. Due to the central importance and holistic overall perspective of MDM, relevant data recipients are, for example, business intelligence (BI) and analytics applications that link the information accordingly and prepare it in a comprehensible and role-specific manner.
What is master data?
Master data is information on the most important data domains in a company that is used and shared by the entire organisation and across all business areas. The main task here is to network the data with the business in order to support its business processes and, for example, to form contexts through which business-relevant findings can be derived and decisions can be made on the basis of the most complete information possible.
What is master data?
Master data is information on the most important data domains in a company that is used and shared by the entire organisation and across all business areas. The main task here is to network the data with the business in order to support its business processes and, for example, to form contexts through which business-relevant findings can be derived and decisions can be made on the basis of the most complete information possible.
Why MDM is so important for industry and commerce
This makes MDM particularly interesting for complex organisational structures that are based on different data domains. In industry and retail, for example, there is a dynamic interplay between customer, product, location, and supplier data. Each data domain is highly relevant to business processes in its own right. However, it is only when these data points are linked together that really exciting contexts are created that can be used to optimise strategies in communication, product, and even company development.
Why MDM is so important for industry and commerce
This makes MDM particularly interesting for complex organisational structures that are based on different data domains. In industry and retail, for example, there is a dynamic interplay between customer, product, location, and supplier data. Each data domain is highly relevant to business processes in its own right. However, it is only when these data points are linked together that really exciting contexts are created that can be used to optimise strategies in communication, product, and even company development.
Consequences for the system architecture
It is important to understand that MDM does not replace any systems in the product content lifecycle. Rather, it is a complementary solution that increases the potential of the overall system architecture by promoting the agility and efficiency of business and decision-making processes.
In order to maximise this potential, MDM must be seamlessly integrated into the existing system landscape and, in particular, connected to the PIM, CRM, and ERP in order to consolidate the master data of the different domains.
Consequences for the system architecture
It is important to understand that MDM does not replace any systems in the product content lifecycle. Rather, it is a complementary solution that increases the potential of the overall system architecture by promoting the agility and efficiency of business and decision-making processes.
In order to maximise this potential, MDM must be seamlessly integrated into the existing system landscape and, in particular, connected to the PIM, CRM, and ERP in order to consolidate the master data of the different domains.
MDM in the context of data virtualisation
In addition to specific software solutions such as ERP, PIM, and CRM, MDM also provides important added value in conjunction with data virtualisation concepts such as data mesh and data fabric. The task of these data management solutions is to centralise structured and unstructured data of all kinds and make it available either to a specific user group such as the data & analytics team or to individual business users in order to serve a wide range of requests from the various business areas.
However, these data virtualisation concepts lack the option of integrating data governance – and this is where MDM comes into play. As a consolidating authority across all business and system areas, MDM has the important task of implementing a standardised set of rules that centrally regulates the handling and use of master data.
MDM therefore plays an important role in enforcing and maintaining high data quality, which is particularly important in the context of industry and commerce.
MDM in the context of data virtualisation
In addition to specific software solutions such as ERP, PIM, and CRM, MDM also provides important added value in conjunction with data virtualisation concepts such as data mesh and data fabric. The task of these data management solutions is to centralise structured and unstructured data of all kinds and make it available either to a specific user group such as the data & analytics team or to individual business users in order to serve a wide range of requests from the various business areas.
However, these data virtualisation concepts lack the option of integrating data governance – and this is where MDM comes into play. As a consolidating authority across all business and system areas, MDM has the important task of implementing a standardised set of rules that centrally regulates the handling and use of master data.
MDM therefore plays an important role in enforcing and maintaining high data quality, which is particularly important in the context of industry and commerce.
The advantages of MDM at a glance
The standardised and centralised view of the most important company data gives rise to the following advantages for companies in industry and retail:
- Improved data quality. Errors and redundancies can be eliminated thanks to the standardised view and consolidation of master data. Data governance can also be enforced more easily, which can generally lead to improved data quality.
- Better decisions. High quality and better availability of master data make it possible not only to organise decision-making processes more effectively but also to back them up with correct data.
- More efficient data processes. By consolidating master data, many cross-system and cross-divisional processes can also be set up more efficiently and automated, for example through the integration of AI services, thereby further accelerating them.
- Greater data transparency. Particularly in industry and trade, where the traceability of production chains and increasing pressure from legislators demand an ever higher level of transparency, MDM provides support by producing a standardised and correct view of the most important company data.
- Support for M&A activities. MDM also offers comprehensive support for takeovers or company mergers through the simple integration of cross-organisational data and processes.
The advantages of MDM at a glance
The standardised and centralised view of the most important company data gives rise to the following advantages for companies in industry and retail:
- Improved data quality. Errors and redundancies can be eliminated thanks to the standardised view and consolidation of master data. Data governance can also be enforced more easily, which can generally lead to improved data quality.
- Better decisions. High quality and better availability of master data make it possible not only to organise decision-making processes more effectively but also to back them up with correct data.
- More efficient data processes. By consolidating master data, many cross-system and cross-divisional processes can also be set up more efficiently and automated, for example through the integration of AI services, thereby further accelerating them.
- Greater data transparency. Particularly in industry and trade, where the traceability of production chains and increasing pressure from legislators demand an ever higher level of transparency, MDM provides support by producing a standardised and correct view of the most important company data.
- Support for M&A activities. MDM also offers comprehensive support for takeovers or company mergers through the simple integration of cross-organisational data and processes.
Would you like to find out more about the benefits of Master Data Management?
Kind regards – your Björn Bayard