Multi-domain Master Data Management
Business-critical data resides in more than one domain, which is why enterprises must manage master data across domains with great care.
- By Marty Moseley
- September 23, 2009
By Marty Moseley
Master data management (MDM) is used to improve the outcomes of an organization's most critical business processes. By enabling organizations to optimize enterprise master data, MDM can help companies benefit from these activities and tune them to become strategic differentiators.
Most companies start to master data with a single domain, usually beginning with the data type they consider the most critical to their success. Some begin with customer data, while others tackle product data first. However, once their initial implementation is in place, enterprises soon realize they can achieve a significant increase in business benefits by mastering additional domains and the relationships between them.
The business case for most MDM implementations is driven by the business imperatives of corporate leaders whose operational processes are substantially compromised by poor-quality data. After experiencing MDM successes, these leaders have learned that mastering multiple data domains can help them meet more of their business needs.
For example, identifying customer buying patterns requires the ability to master both customer and product data, and streamlining supply chain issues depends on access to accurate product and supplier information. By mastering multiple data domains and managing their interrelationships, companies will reduce cycle times, lower (or control) costs, enhance marketing, and improve forecasting, planning, and transactional and analytical outcomes, which translate into measurable revenue and margin benefits.
The data that flows through an enterprise can be categorized into six types: who, what, when, where, how, and why. Master data management is the discipline through which who, what, when, and where data are optimized for business benefits.
- "Who" data represent the parties of interest that matter most to a business or organization, including stakeholders, benefactors, customers, suppliers, owners, providers, partners, etc.
- "What" data concern the things that an organization buys, creates, provides or sells.
- "When" data involves the overlays of time, such as calendar years (which differ by culture and include cultural, religious, and governmental holidays, etc.) and time periods specific to an organization (fiscal year, product release schedule, marketing calendar, and calendars for markets that an organization sells into).
- "Where" data are locations in space, such as where people and organizations are located; where products are manufactured, shipped, sold, stored, and inventoried, and the distribution locations and delivery addresses where they are shipped and used.
- "When" data is mastered by only a few organizations; most enterprises rely instead on core functions within their applications and databases to properly tag events with dates and times.
Mastering Multiple Domains
Regardless of whether they're actively managing domains, companies rely on understanding multiple master data domains and the relationships between them to successfully manage their business. Commercial enterprises derive substantial benefit from knowing about their customers, contacts, products, locations, licenses, and suppliers, as well as the the relationships between these entities. Therefore, it is essential that organizations manage the integrity of these master data. Similarly, healthcare providers must master their patients, providers, treatments, facilities, labs, and tests data.
In fact, most organizations are best served by mastering who, what, when, and where data types discussed above, but they also must manage the interdependencies between these domains.
Consider product ("what") data. Product master data doesn't exist independently from other kinds of master data. Products exist for a period of time ("when" data), and have specific "calendars" associated with their creation, public introduction, marketing literature, first shipment, campaigns, withdrawal from the market, and obsolescence. Physical products also have ties to locations ("where" data). They were manufactured at a certain place, inspected or tested at another, and packaged, shipped, distributed and sold at other locations.
When a company sells a product to a customer ("who" data), a transaction record is created for where and when the sale took place, where the product was shipped or downloaded, where it was installed, and any conditions for its use. If product master data is integrated with time, location, and customer master data, companies will benefit from better forecasting and planning, reduced costs, and increased margins.
In addition to space and time data combinations (which are pervasive), other combinations of master data are common in organizations and across business processes. For example, a manufacturing company has supplier data ("who" data), part ("what") data, and assembly location ("where") data that exists in numerous systems and should be mastered.
However, these data are naturally interdependent, which is where multi-domain MDM adds value. Suppliers don't exist independently of what they sell, and their manufacturing and shipping locations are integral aspects of supplier data. Parts and components aren't purchased unless they are used to create something (which has its own bill of materials and interrelationships with other parts, components, assemblies and finished goods) during a specific period of time, to be produced and managed at specific locations. During the procurement cycle, the purchasing manager may add, cancel, or modify contracts (another multi-domain artifact), impacting associations between suppliers, parts, and components being purchased from them, manufacturing and delivery locations, and other data.
If all of these associated data are not mastered, the overall integrity of a manufacturer's procurement processes will be affected. Mastering multiple data domains will enable a manufacturer to plan better, reduce cycle times, and control or decrease costs, which can translate into higher revenue and larger margins.
Multi-domain MDM can also be helpful in law enforcement. For example, a police officer ("who" data) gets notified by radio that there is a code violation ("what" data) occurring at a specific location ("where" data) at a particular time ("when" data). The specific code informs the officer that there is an armed robbery in process and it may even include instructions on how to proceed. For this incident, the master data domains involved are the location or address, the robbery event, the parties ("who" data) involved (including the officer, suspects, witnesses, victims, and perhaps an organization -- such as a store or bank) where the incident occurred. In addition, there are potential weapons and vehicles ("what" data) involved, and which will have registration numbers and license plates).
All of these data elements exist around a single event and create a complex combination of master data domains that can be immediately brought together and managed at one point in time. If these master data domains are not managed, the ability to correlate events across towns, similar events, suspects, known associates, vehicle registrations, are hampered, putting law enforcement at a disadvantage in their role of protecting citizens, neighborhoods, and communities. The benefits, if multiple domains are managed, are not necessarily measured in financial terms but in how the technologies will increase the protection of communities from harmful people and organizations.
In the financial world, accounts are the association between individuals, households, organizations (trusts, boards, companies), portfolios, products, instruments, holdings, locations, policies, balances, and calendar periods. If any of the master data are inaccurate, the consequences may be dire for the account holders, participants, and the financial institution itself. The individual data domains be managed, and the interrelationships between them must be governed to complete business transactions, and meet governance, regulatory, and compliance demands (privacy laws are prime examples). Financial companies that leverage multi-domain MDM to understand their customers better and offer them more comprehensive products and services can benefit revenue and market share.
Multi-domain MDM: Building on Value
Multi-domain MDM provides organizations with the data they need to better manage relationships with customers and external suppliers and partners, and better understand the complexity of the goods and services they provide. The result: more substantial business benefits than result from only mastering a single data domain.
By providing "who," "what," "when," and "where," master data to the entire organization, companies can more easily support and improve their most valuable transactional and analytical business processes. The results are tangible improvements to bottom-line costs and top-line revenues.
Marty Moseley is the chief technical officer for Initiate Systems (http://www.initiate.com), a multi-domain master data management (MDM) solutions provider whose products enable information sharing and improve data quality. He can be reached at [email protected].