The purpose of a master data management system (MDM) is to store information and apply business rules that are specified by management. After you understand the types of data that can be stored and the ways it can be used, it is easy to understand the value of MDM. Storing accurate information in MDM is crucial to running a successful business.
It is important for companies of all sizes to use a data management system to its full potential, but for larger companies, it is vital. The reason for this is that the stakes are higher: an informational error in a large corporation can cost thousands or even millions of dollars.
Many people are confused about the types of data that can be managed by MDM, and how that data is qualified within the system. There are many data items that can easily be identified, like “product” or “customer.” As a matter of fact, many people believe that these items are the only data stored in MDM. However; the way elements of data are identified is much more complex and cannot be defined in those simple terms.
Master Data Management within a corporation can contain the following five types of data:
1. Master data
The definition of master data is similar to that of a noun. You can think of this type of data as falling into one of four categories: person, place, thing, or concept. Within those four groupings, there are more qualifications. Here are a few examples:
- Person: Here you may find employees, customers, or salespeople.
- Place: These are things like your physical storefront or your office location.
- Thing: Likely, products will be stored here, as well as any other tangible property you may have.
- Concept: This is where intangibles are stored, like contracts and warrantees (the paper is tangible, of course, but the agreements themselves are not).
Even the sub-categories, like customer, can be divided further. You might have a section for customer history or promotional offers. Product can even be drilled-down to industry, or some other qualification. The requirements may vary per industry so you’ll want to make sure that your MDM is set up to handle your company’s specific needs. You’ll also be able to determine how far you’ll need to go in defining these categories based on the level of detail you might need. For example, if you are running a smaller company, you may not need to keep and access detailed records of the promotions that were offered to each customer.
2. Hierarchical data
Hierarchical data refers to the relationships between stored data. This data may be stored as part of another system (like accounting), or it be stored separately to mimic real world relationships (think different products within a line). This type of data is sometimes referred to as a super MDM domain because it is critical to understanding the relationship between set data.
3. Metadata
Metadata is essentially information about other information, a clarification of sorts. It may have its own repository, or it may be stored in other places, like an XML document.
4. Unstructured data
This is data that originates from e-mails, PDF files, magazine articles, and the like.
5. Transactional data
This type is just as it sounds; data that is related to transactions that have taken place. These transactions could be sales, support tickets, claims, etc.