Master Data Management, abbreviated as MDM (and not to be confused with mobile device management, also abbreviated as MDM), is a technology-based discipline integral to any data governance strategy. MDM attempts to minimize the risk of dirty data by creating and maintaining a single source of truth—or master data record—for every data point. This allows an organization to gain a consistent and reliable record that can be shared across departments., leading to better reporting, decision-making, and operational efficiency.
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Clarifying master data management as a technology and discipline
Master data management as a discipline heavily relies on the principles of data governance with the primary goal of maintaining data integrity. In considering MDM for your organization, you must create a governance plan that prioritizes strategies that minimize the risk of data corruption.
As a technology, on the other hand, MDM solutions automate how business-critical data is governed, managed, and shared throughout the organization. These tools typically use data integration, reconciliation, and enrichment to create master records and ensure clean data across the board. MDM software can also correct or merge duplicate data and create an audit trail of any changes (typically through an IT report).
What is master data?
Master data management is just that: It manages master data—but what exactly does that mean? While there are many definitions of “master data”, the consensus is that it refers to the “best version of the truth”, containing essential information about a specific data point (such as customer names, employees, suppliers, products, offices, etc.) so you can take more informed action in your company, whether that’s for a targeted marketing campaign, sales conversation, or improving your product offerings.
Master data can be further classified into domains, which include:
- B2B and B2C customer master data management
- Product master data management
- Reference data master data management
- Location master data management
- Asset master data management
- Employee master data management
The importance of maintaining and managing your master data cannot be overemphasized. In an article by the St. Andrews Economist, data is considered the “new form of currency”, where the world’s most valuable resource is no longer oil but data. This should come as no surprise when you consider that global data creation is projected to grow to more than 180 zettabytes by 2025. For reference, that’s four and a half times as much as all recorded spoken words in human history.
Regardless of your industry or business size, you must take the necessary steps to protect your data and meet quality thresholds to maintain a high-quality master reference.
Why do I need master data management?
Having multiple sources of information can become a challenge, especially if your company manages a hybrid workforce. As your business grows and you begin to have multiple departments, your risk of having siloed data increases as well. Because data changes over time and departments may not share all data points with each other, it’s easy for data sets to become fragmented, incomplete, or inaccurate.
Consider its potential impacts on your end-users. Imagine a sales call to a loyal customer only to find that their address has now changed or, worse, they’re called by the wrong name. Or, think about how confident an account manager would be if they didn’t know which products the customer owns or uses.
But we also need to consider its effects on your bottom line. Incorrect, unreliable data can have profound impacts on your company. Wrong data affects all decision-making processes, and you could decide on issues that need not be corrected.
Key components of master data management
Semantic consistency
We’ve come a long way from early master data management strategies. With the rise of machine learning and large language models, modern software can distinguish homonyms (the same words with different meanings) and synonyms with relative proficiency. Nevertheless, technology still has limitations in identifying semantic consistency.
This is where humans can work together with MDM solutions. MDM tools can point out possible semantic differences in a data set for a human to check and then establish business rules in each specific context. MDM solutions make this process much faster, since they can evaluate big data more efficiently and accurately.
Data synchronization
MDM solutions ensure that all data is kept up to date and that all changes are accurately reflected in the master data repository. Master data synchronization converts new data into a standardized format and structure, guaranteeing that all systems have the latest and consistent information.
Data stewardship
Robust master data management ensures that specific departments or individuals have appropriate responsibilities to maintain specific data domains. This collaboration prevents a single department from being overwhelmed and fosters a company culture of prioritizing clean data all throughout every stage.
Data quality
This includes data cleansing and strategies to prevent data rot. When planning your master data management, it’s important to consider strategies (and software) to ensure that data points are valid, complete, and consistent.
Data security
Your organization must deploy different security measures to protect data from threat actors. Some recommended strategies include implementing least privilege access, using strong data encryption policies, using MFA on all endpoints, and enforcing compliance with relevant regulations such as GDPR and HIPAA.
Data mapping
Relevant stakeholders must be able to see a map of every master data set easily. In data mapping, an MDM solution connects data sets across domains with their corresponding fields within the repository.
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What are the benefits of master data management?
- Improved data quality: MDM ensures data consistency and accuracy across your organization. This means that you have more reliable data to make more accurate decisions.
- Increased operational efficiency: A single source of truth increases operational efficiency by allowing you to spend less time reconciling data and performing data maintenance activities.
- Maintain compliance: MDM solutions help you comply with multiple data privacy regulations.
- Streamlined operations: Master data management makes it easier for teams to view data sets without having to compare different types or formats of data. A single view of the data model can streamline operations, allowing for better coordination between departments.
NinjaOne protects your data
NinjaOne, an endpoint management company trusted by 20,000+ customers worldwide, helps you protect critical business data with real-time monitoring and alerts through endpoint backup. Its endpoint security tool is built into its multi-awarded RMM software to reduce silos and enable seamless security.
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