Imagine sending a confidential email to a wrong address, or having factory standing by due to malfunction, or even crashing a rocket into a planet instead of safely reaching its orbit. All of these cases are real life examples caused by the poor master data quality. In the first case the problem was in the customer data containing erroneous address for person. The second case was caused by poor master data regarding factory maintenance schedule. The third case happened due to invalid reference data of metrics used. The saying “devil is in the detail” applies really well in the world of master data. Those seemingly small issues will quickly grow into major problems impacting the whole business. Most of these data quality related issues would have been easily avoided by a proper master data management.
But what exactly is master data and how it should be managed? This blog series dives into the world of master data management: What is it, why it is important, and how it should be executed. But before going too deep into technical detail, let’s start by defining what could be considered as master data. There are various definitions for the term and none of those is absolute. One definition could be that master data can be seen as the data describing the most relevant business entities, on which the activities of an organization are based on. But what are those entities?
Each industry has its own master data requirements and characteristics, but there can be total of five common core master data domains identified:
- Product (What): All master data related to e.g. products, services, or assets offered or owned by the organization. This domain can vary a lot depending on the industry.
- Party (Who): Domain consisting of all business partner related master data such as customers, suppliers, distributors, employees or citizens. It can be either person or organization, and contains e.g. name, party identifier and contact details.
- Location (Where): Master data regarding places, sites and regions. Sales territories, cities, offices and production facilities are examples of locations.
- Account (How): Explains how parties are related to each other and to the things offered by organizations. It contains data such as accounts, financials, agreements, contracts and other relationships between entities.
- Calendar (When): Time domain of master data containing e.g. validity periods and schedules associated with e.g. creation, marketing, shipping, and obsolescence of products. This is the most ambiguous domain since the time dimension can also be seen as part of the life-cycle management of other domains.
