First of all, you are probably thinking, what is MDM? In business, master data management (MDM) is a method used to define and manage the critical data of an organization to provide, with data integration, a single point of reference. The data that is mastered may include reference data - the set of permissible values, and the analytical data that supports decision making. As a business owner, Master Data Management is something that you need to know to be a part of your success. MDM is a comprehensive method of enabling an enterprise to link all of its critical data to one file, called a master file, that provides a common point of reference.

When you use MDM, you will get information like who your best customers are, how many employees you have, what products sell the best and more! Master Data Management is a hub of sorts for all of your information to be in one area so that you can simply understand. There are 6 types of data that you need to understand:
  • Unstructured Data: Data found in email, white papers, magazine articles, corporate intranet portals, product specifications, marketing collateral and PDF files. 
  • Transactional Data: Data about business events (often related to system transactions, such as sales, deliveries, invoices, trouble tickets, claims and other monetary and non-monetary interactions) that have historical significance or are needed for analysis by other systems. Transactional data are unit level transactions that use master data entities. Unlike master data, transactions are inherently temporal and instantaneous by nature. 
  • Metadata: Data about other data. It may reside in a formal repository or in various other forms, such as XML documents, report definitions, column descriptions in a database, log files, connections and configuration files. 
  • Hierarchical Data: Data that stores the relationships between other data. It may be stored as part of an accounting system or separately as descriptions of real world relationships, such as company organizational structures or product lines. Hierarchical data is sometimes considered a super MDM domain because it is critical to understanding and sometimes discovering the relationships between master data. 
  • Reference Data: A special type of master data used to categorize other data or used to relate data to information beyond the boundaries of the enterprise. Reference data can be shared across master or transactional data objects (e.g. countries, currencies, time zones, payment terms, etc.) 
  • Master Data: The core data within the enterprise that describes objects around which business is conducted. It typically changes infrequently and can include reference data that is necessary to operate the business. Master data is not transactional in nature, but it does describe transactions. The critical nouns of a business that master data covers generally fall into four domains and further categorizations within those domains are called subject areas, sub-domains or entity types.
Managing master data is important because it is used by multiple applications and an error can cause err,er applications which lead to chaos. This can lead to bills being sent to the wrong customers, incorrect prices and more! Click this link to learn more about Master Data Management.
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