Master Data Management

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Master Data Management (MDM), also known as Reference Data Management, is a discipline in Information Technology (IT) that focuses on the management of reference or master data that is shared by several disparate IT systems and groups. MDM is required to enable consistent computing between diverse system architectures and business functions.

Large companies often have IT systems that are used by diverse business functions (e.g., finance, sales, R&D, etc.) and span across multiple countries. These diverse systems usually need to share key data that is relevant to the parent company (e.g., products, customers, and suppliers). It is critical for the company to consistently use these shared data elements through various IT systems.

MDM also becomes important when two or more companies want to share data across corporate boundaries. In this case, MDM becomes an industry issue such as is the case with the Finance industry and the required STP (Straight Through Processing) or T+1.

In the Y computing model, MDM is one of three computing types (OLTP transactional computing (typically ERP), DSS (Decision Support Systems) and MDM). These types range from operational reporting to EIS (Executive Information Systems). Master data management is not only required to coordinate different ERP systems, but also necessary to supply meta-data for aggregating and integrating transactional data. This use of MDM is necessary for Data Warehouse projects typically incorporated in Decision Support Systems. For this reason, MDM systems sometimes provide a meta-data abstraction layer.

Master Data Management solutions tackle the rapidly escalating issues of dimension coordination, integration and reconciliation that enterprises face with each incremental year of systems evolution.An easy to use, web-based master data management system is the missing link between operational/transactional systems, business intelligence and Performance Management systems.

Most enterprises have implemented their own special blends of ERP, CRM, Business Intelligence, Financial Reporting, Planning, and other operational systems in order to accommodate unique business requirements. Each of these systems requires the same dimensional information to operate, yet they manage this information independently, which directly affects dimensional synchronization and reconciliation across systems. Master data management software aims to integrate dimensional and master data across BI, data warehouse, financial & operational systems, providing for accurate, consistent and compliant enterprise reporting.

Recent legislation, such as Sarbanes-Oxley in the United States and new international accounting standards, has driven many enterprises to evaluate their master data management system for the first time. Master Data Management software empowers business users with a best-practice business management process to centralize and directly manage the structure of corporate data.