Master Data: A Key to Unlock the True Power of Data
by Ramanuja Dwarakinath | 14 | Master , Data , Master Data Management

In today’s world, “data”
has become an integral part of our lives. Whether a step we take during our
morning walks, a click on the mouse of our personal computers, or a tap on our
smartphones, practically everything we do from sunup to sundown generates data.
The amount of data being generated has reached gargantuan
proportions; it comes in all shapes, forms, and sizes. In fact, data analysts
have zeroed-in on four important terms called the ‘4 Vs’ to characterize
data: Volume (the amount of data generated, from a single byte
to exabytes), Velocity (the rate at which data is
generated/consumed), Variety (different types of data: emails,
voicemails, videos, pictures, etc.), and Veracity (the quality
and accuracy of the data).
This data phenomenon has given birth to a new buzzword: “Data
Explosion.” To put things into perspective here is a graphic of what One
Internet Minute does to the data world.
Source: Wikipedia, Statista
In businesses, organizations, and enterprises, data from this
explosion is distributed and scattered across different lines of businesses,
silos, domains, and IT application systems. The current evolution and
omnipresent use of mobile, IoT, and the cloud has created a data-goldmine.
However, the sheer scale of the data sets, complexities of the business
processes, and the many applications on which the data is stored or used make
it difficult to maintain high-quality data and nearly impossible to gain a complete
view of actionable business insights.
More often than not, this valuable information ends up becoming
a thorn in a company’s side rather than a catalyst that drives their business
forward. Managing these overwhelming amounts of data and utilizing them
effectively to foster business growth has become a herculean task. This is
where “Master Data” comes in.
What is Master Data?
Master Data represents the business objects that contain the most
valuable, agreed-upon information shared across an organization. Master Data
gives context to business activities and transactions, answering questions
like who, what, when, and how, as
well as expanding the ability to make sense of these activities through
categorizations, groupings, and hierarchies. Master Data essentially contains a
consistent and uniform set of identifiers for enterprise products, suppliers,
locations, etc.
The kinds of information treated as master data vary from one
industry to another, and even from one company to another within the same
industry. This could be data on customers, products, suppliers, locations,
patients, or equipment. Master Data that is mastered and governed often becomes
the core data that is essential to operations in a specific business or
business unit.
Master data is often referred to by various synonyms such as
Trusted Data, Golden Record, Best Version of Truth (BVT), Single Version of
Truth, Reference Data, Foundational Data, and Federated Data.
On the other hand, Master Data Management (MDM) is
a controlled process that defines, creates and manages various
business-critical data of an organization to provide a single point of
reference. Master Data Management removes duplicates, standardizes data and
incorporates rules to eliminate incorrect data from entering the system. This
creates an authoritative source of master data. It is a technology-enabled
discipline in which business and IT work together to ensure the uniformity,
accuracy, stewardship, semantic consistency, and accountability of the
enterprise’s official shared master data assets.
Master Data and its Business Implications
According to Harvard Business Review, only three percent of companies’ data meets basic quality standards. This number is shocking especially given the fact that data is the nucleus of anything and everything that happens in businesses. Data quality issues lead to data errors, incomplete information, and unreliable data. Subsequently, analytics projects executed on this data run the risk of producing incomplete, error-prone, and non-standardized results. Needless to say, business decisions made on these bad results will have inherent flaws.
Poor customer data won’t just annoy the
existing customers, it may turn prospects and buyers away from the
organization’s brand, costing them sales, damaging profits, and eroding the
brand’s reputation. Distributing an email that includes an incorrect name or
other personal details, offering irrelevant discounts based on incorrect
purchase history or geography, or emailing an offering twice to the same person
are some embarrassing acts MDM can prevent.
Bad data can also get the
organizations in bad books of regulatory and compliance authorities, resulting
in hefty fines and irreparable damage to companies’ reputations. Therefore,
data quality improvement, mastering data, and managing data should be among the
top priorities of any company looking to stay relevant.
Curious how exactly MDM supports compliance efforts? > >
How can Master Data Propel your Business?
MDM isn’t simply a data management system. MDM is a complete
package complete with numerous milestones of data integration, data mastering,
data management, and data governance. These data milestones often are broken
down into: Discover, Model, Cleanse, Enrich, Recognize, Resolve, Relate,
Govern, Access and Deliver.
MDM acts as a central repository providing a single version of
the truth and equips organizations with a complete, end-to-end solution that
drives innovation, achieves better business outcomes, and addresses most of the
challenges mentioned thus far. MDM also empowers organizations to embark on
a data-driven digital transformation journey.
Various Aspects of MDM and
its Capabilities
Source: Informatica
A few tangible impacts seen in most MDM implementations across industries right off the bat, are:
- Achieve outstanding Customer Satisfaction and deliver exceptional experiences to the customer
- Data Quality Improvement
- Lower Operating Costs
- Competitive Edge
- Regulation and Compliance
- Streamline Mergers and Acquisitions
Master Data Management Strategy
With all this, would implementing an MDM-program guarantee positive outcomes in your organization? The answer is ‘yes,’ but with a caveat. Merely implementing a master data management program doesn’t solve all data conundrums. An effective master data management strategy entails an end-to-end, comprehensive view of trusted, relevant, governed, and authoritative data.
This approach can be modular based on your needs and can
span across multiple data domains–including customer, product, supplier and
potentially dozens more. A complete master data management strategy addresses
the critical business objectives for today’s customer-centric and data-driven
business. Without a complete strategy, MDM will produce limited benefits.
In order to be successful, an MDM implementation needs to be
approached strategically, with active participation from all stakeholders. It’s
paramount the right kind of experts are working with the MDM tools that fit the
organization’s needs, irrespective of the project methodologies used. And of
course, the involved project teams, business owners, data stewards, data
owners, and various other stakeholders should work in unison to make the
program successful.
A Corporate and Strategic Asset to your Business
All these years, enterprises have been collecting the attributes
that contribute to master data without even realizing it. Since the data was
disorganized and dispersed, management didn’t see the data as the asset,
failing to realize its full potential. But the evolution of the digital world
has changed the perception of data and the lens it’s looked through. Data is an
innate and quintessential part and everything that goes on, so much so that it
can make or break an enterprise.
The emergence of social media giant tech companies such as Facebook, Twitter, Instagram, and defunct Cambridge Analytica respectively are a testament to the role that data plays. In fact, it looks as though all roads are leading to one eventuality: where data, sooner or later, will be recorded as a tangible asset. Gartner predicts that by 2022, companies will be valued on their information portfolios.
Gartner even advises using its Information
Valuation Method to value information assets much like other enterprise assets.
As they stated, “Those in the business of valuing corporate investments,
including equity analysts, will be compelled to consider a company’s wealth of
information in properly valuing the company itself.”
Conclusion: Master Data - The Golden Truth
In today’s new world order, the need for a single source of the truth is more prevalent than ever before because “Trusted Data Leads to Trusted Insights.”
Data that’s mastered is an invaluable
asset to an organization that fast-track insights, empowers employees, gives a
roadmap for mergers or acquisitions to realize growth potential, and improves
end-to-end organization business processes.
Whatever domain your
organization is in or whatever types of customers you cater to, in this
data-driven world, if you ask yourself: should your organization implement a
Master Data Management Strategy? the answer will have to be a resounding ‘Yes.’
That’s the Golden Truth.