What is Master Data Management and Why do you Need it?

Businesses need to manage their data efficiently, be it customer related or transactional type. They can’t provide better customer experience if they suffer from data inaccuracy. It is not possible to take important business decisions with inaccurate, incomplete or redundant kind of data. This will directly impact the growth of the business. Thankfully, you have an entire set of solutions and technologies for creating and maintaining the huge amount of data. The concerned set of discipline is known as Master Data Management (MDM).

What is Master Data?

The high quality data drives the business success. Master data refers to the core data of the enterprise. It describes the main objects around which the business is conducted. You can say master data are the nouns that describe the business processes. They are non-transactional in nature but they do describe the transactions. For example- customer, product, location, supplier are master data domains. The master data domains are further sub-divided into sub-domains. Like party domain will have sub-domains customer, supplier, employee and salesperson.

Why should I care about managing master data?

This question must have popped in your mind. You know that master data is used by many applications. An error in the data in one place can cause errors in all the applications that are using it. Say, a customer master enters an incorrect address. This will cause all the orders, bills and marketing literature to be sent to the wrong address. An item master enters an incorrect price which will lead to a marketing disaster for the company. Also it is not easy to merge master lists together. Therefore, you require a tool that understands nicknames, alternate spellings and typing errors. The tool should be able to resolve different name variations if they all live at the same address or have the same phone number.

Who needs Master Data Management?

Large and highly data distributed organizations and those organizations that have frequent and large-scale merger and acquisition activity require MDM. At the time of mergers and acquisitions, there are data integration challenges and Microsoft master data services is designed in such a way that it can easily handle such issues. The companies with segmented product lines can also prevent disintegrated customer experiences with the help of MDM.

What is Master Data Management?

Master data management (MDM) is the process of creating a single master reference source for all critical business data. It builds up coordination among master data of the organization ensuring accuracy and consistency of data. MDM may cover a single or multiple domains. The relationship among different domains is crucial for any organization. It empowers them to gain operational intelligence along with better decision making capability.

Who are the MDM Stakeholders?

Data governance team, administrators and data stewards execute and manage the MDM strategy. Apart from them, there are the key stakeholders who are actively involved in a successful MDM project. The business and IT representatives are the active stakeholders and take the following type of roles:

  • Business or IT Executive Sponsors
  • IT Project Leads
  • Subject-matter experts from the concerned Line-of-business
  • Data Stewards
  • IT delivery team

What are the benefits of MDM?

Some of the key benefits of MDM are as follows:

  • Improved decision-making based on high-quality data and related reporting.
  • Better understanding of the core assets that are the key players in business-critical processes.
  • Data management becomes more effective.
  • Data management is more standardized and requires less manual labor.
  • Complex business processes becomes more efficient and streamlined.


Organizations manage their core information regarding customers, suppliers, products, agents, accounts and the relationships between these through Master data management. MDM has helped enterprises to gain control over business data and information. MDM helps them create and maintain a complete, consistent, up-to-date and accurate view of their master data, sometimes called a gold copy.

The effectiveness of MDM greatly increases, if applied to all the master data in the organization. However, if you are concerned about the risk factor and the cost of its application, start with a few key sources of master data first. Later you can expand the effort and apply it to other core assets.