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What is Master Data Management? – Definition

What is Master Data Management? – Definition

Master data management (MDM) is a system for organizing and managing the core pieces of information about an organization. This includes employee records, product information, customer data, supplier details, and any other essential data required to maintain efficient operations. Although organizations have long used MDM in some form or another, advances in technology now allow for more comprehensive and unified management of master data across multiple systems. In this article, we will explore what master data management is, why it’s important for businesses, and how it can be used to improve operational efficiency.

Master Data Management (MDM)

Master data management (MDM) is a system that allows an organization to centralize and maintain its critical data. This data includes customer information, product information, supplier information, financial information, and more. MDM systems help organizations keep this data accurate and up-to-date, which is essential for making sound business decisions. MDM systems typically include tools for data cleansing, data governance, and data security.

What is Master Data?

Master data is the core data that is used to identify and describe an organization’s key assets, including customers, products, suppliers, employees, locations, and financial transactions. It is typically managed in a central repository that can be accessed and shared by authorized users across the enterprise.

An effective master data management (MDM) solution helps organizations to maintain a single, consistent view of their master data and ensures that this data is accurate, complete, and timely. It also provides the foundation for other critical business processes such as customer relationship management (CRM), supply chain management (SCM), and enterprise resource planning (ERP).

The Benefits of MDM

MDM provides a single, 360-degree view of an entity.

It eliminates data silos and enables the integration of disparate data sources.

MDM can improve data quality and completeness by deduplicating and cleansing data.

It can also help organizations to comply with data governance and privacy regulations.

The Components of MDM

There are four key components of MDM: data discovery, data quality management, data integration, and data governance.

1. Data discovery is the process of identifying the relevant data sets that need to be managed. This may include internal data sets as well as external data sources.

2. Data quality management is the process of ensuring that the data sets are accurate and complete. This includes cleansing and standardizing the data.

3. Data integration is the process of bringing together the various data sets into a single repository. This may be done through ETL (extract-transform-load) processes or by using a tool such as a masterdata hub.

4. Data governance is the process of ensuring that the data sets are properly managed and controlled. This includes establishing policies and procedures for managing the data, as well as assigning roles and responsibilities for those who will be working with the data.

Implementing MDM

There are various approaches to implementing master data management (MDM). One common approach is to use a centralized data repository, which can be either a database or a file system. The advantage of using a centralized repository is that it allows for easy sharing of data across different applications and departments. Another common approach is to use a distributed data model, which involves replicating data across multiple locations. This approach has the advantage of being more scalable and resilient, but can be more complex to manage.

Once you have decided on an approach, you will need to select the tools and technologies required to implement MDM. There are many commercial and open source options available, so it is important to evaluate your needs before making a decision. Once you have selected the tools and technologies, you will need to configure them to work together and integrate them with your existing systems.


Master Data Management is a critical part of any business and understanding what it is, how it works and why it is important can help organizations run more efficiently. Master data management helps ensure that all the data collected by an organization is accurate, consistent and up to date, which leads to better decision making within the organization and improved customer service. Having an effective MDM solution in place can lead to increased organizational efficiency and profitability while also reducing costs associated with data errors.