A Definition of Master Data Management (MDM)
Master data management (MDM) is an approach to reducing data redundancy by maintaining a definitive "record of truth," or master file, for critical data in order to supply a single source as a reference. Ideally, MDM organizes data sharing among multiple applications or departments.
It Starts with Data Integration
It's common for organizations to have duplicate information on different systems. For example, customer information could be stored in both a CRM and accounting system:
While some data in both systems is identical, some is similar but not the same.
With small organizations, there usually isn't an issue keeping just a few systems up to date. The process of keeping data up to date between disparate systems is called Data Integration or DI.
As organizations bring more and more systems online, their business data is duplicated even further and the problem of keeping all of the systems up to date becomes problematic. For example, imagine a delivery service that stores information about its customers in several systems:
As information about their customers change, the difficulty of keeping all the systems up to date becomes exponentially more difficult as the number of systems increases.
Considering the diagram above:
- Where is the truth?
A customer's email address would be stored on several systems and there may be conflicting values. If this is the case, which system holds the truth?
- Which system gets notified of a change and what data elements do other systems need?
If all systems need to be updated, then each system needs to know how to transform the data to be consumable by the each of the other systems, which requires programming many transformations. In an extreme case, the example above could take five transformations for each of the six systems, totaling 30 transformation modules or adaptors.
- Are changes handled in real time or in batch?
The easiest and most common change handling is via batch updates. However, the latency between batch updates usually causes issues with business processes.
- How is DI handled?
The onus of transferring data between systems becomes a daunting task. While some applications have built-in adaptors to handle transformations they generally handle only a subset of what is required. Where the built-in adaptors fall short or don't exist, the organization has to spend resources developing adaptors as "one-off" applications to meet the ongoing transformation need.
- How does the organization manage access to the data?
Perhaps the Warehouse should get access to only a subset of the customer data or shouldn't get any level of access to the Credit Card Processing system. The term Governance is used to describe managing access to the data.
The problem doesn't end with just the customer data. Other data such as product, inventory, and employee data may need to be kept up to date on several systems as well:
In Master Data Management, the set of fields or properties that define a set of data (e.g. Customer) is called a data domain.
Migrating to Master Data Management
Master data management (MDM) solves the problem of keeping interrelated systems up to date by creating a separate system where data domains (or domains) are defined for all systems inside the organization. The domains provide neutral data formats or schemas for all systems.
A YOUnite MDM domain can either:
- Centrally save the latest change of a record (centralized MDM) or,
- It can make note of when a change occurs in one of the organization's systems without actually storing the data in YOUnite; this is called federated MDM.
The latest version of a customer record is called the customer's Master Data Record, or MDR.
In the example of our delivery service:
- In a centralized domain, the MDR is stored by YOUnite and can be retrieved, in whole or in part, by applications that have appropriate access.
- In a federated MDM implementation, the MDR is NOT stored inside of YOUnite but is created in real-time by referencing the elements (or properties) as they reside inside the various systems. An identical property is often stored in multiple systems.
MDM's governance model can manage who can see what so in the federated example, perhaps the Warehouse Management system only has access to data stored in the Distribution and CRM systems. but the Accounting System has access to all systems. When the Warehouse Division looks up the MDR for its customer the Acme Company it may get a different result than Accounting Division since the Accounting Division has access or scope to Acme Company's information on all systems.
Reviewing New Terms
Several terms have been introduced and it may be helpful to review them before moving on:
- Data Integration (DI) The process of transforming and transferring data from one system to another.
- Adaptor Applications, modules or some software or hardware component that transforms data from one format to the other so that the data can be consumed by another system.
- Governance Managing who accesses certain data sets based on role, application, etc.
- Data Domain (Domain) A set of fields or properties that define a set of data (i.e. "Customer").
- Master Data Management (MDM) An approach to reducing data redundancy across systems by maintaining a master file for critical data.
- Master Data Record (MDR) The latest version of a record (for a customer, for example).
- Centralized MDM An MDM solution whereby the latest change to a record is saved centrally (in the YOUnite MDM domain). From http://www.oracle.com/technetwork/articles/soa/ind-soa-mdm-2090170.html: MDM with a central database or central business applications.
- Federated MDM An MDM solution whereby the latest change to a record is noted in one of the organization's systems without actually storing the data centrally (in the YOUnite MDM domain). From http://www.oracle.com/technetwork/articles/soa/ind-soa-mdm-2090170.html: MDM with distributed data and a central directory.
- Scope The defined access limit to MDM data for any given system, application, or role.
Now you are ready for An Introduction to YOUnite MDM