Master Data, Why does this matter so much to DBAs, Data Analysts, and Developers?
The concept is not new. But in times of a strong Real (Brazilian currency), acquisitions, mergers, joint ventures, growth, and prosperity in Brazil, this concept gains importance and prominence in medium and large corporations. From the concept of Master Data, we move to MDM (Master Data Management), which is the foundation for any Data Quality process. In this article, I will use the foreign term because I find it nicer.
If we search the internet for what Master Data is, we will find numerous definitions. Personally, I prefer the ones provided by Oracle and Semarchy.
Master Data is the set of the most crucial data for any business. These are the most visceral data, the ones that best describe a corporation, without which the corporation or entity would cease to exist or, at the very least, suffer a huge impact.
Generally, this set of data defined as Master Data is essentially descriptive data (not transactional) and therefore defines the various entities affected by the business.
For the most part, Master Data (Data is the plural of Datum) undergoes little or no change over time. Master Data represents the core (hard nucleus) of a business, corporation, or entity.
Depending on the size of the organization, data of entities may be replicated, redundant, isolated, and unlinked across various distinct databases serving different applications. This is where the problem for MDM—Master Data Management—lies.
Master Data can be divided into four major categories:
- People: Customers, Suppliers, Partners, etc.
- Locations: Headquarters, Branches, Cities, States, Addresses, etc.
- Things: Products, Services, etc.
- Organizational: Organizational structure, regional sales, cost centers, chart of accounts, price lists, etc.
Note that it’s impossible to make a sale without the “thing” Product and a person “customer.” It’s also impossible to imagine a marketing campaign or initiative without knowing which “locations” it will take place in, who the target “people” are, which “things” (products or services) will be offered, and which “price list” will be used.
Transactional or movement data are not considered master data, though they are equally important because they can be used to generate knowledge (BI—Business Intelligence). But the fact is, a company could “run” without transactional data, but never without its master data. Examples of transactional data include budgets, orders/sales, payables, receivables, inventory movements, etc.
Now, imagine this scenario: a medium-sized company has a financial system from vendor A, a sales system from vendor B, and a CRM from vendor C. In this scenario, it is very likely that systems A, B, and C each have their own registers of people, locations, things, etc.
It’s possible, and even likely, that without integration between these systems, the records may contain inconsistent information, such as:
- System A: Alexandre de Almeida lives at R das Nacoes Unitas, 3000
- System B: Alexandre M de Almeida lives at Av NAÇÕES UNIDAS, 3000 – T1 –
- System C: Alexandre Martinho de Almeida lives at Av Nações Unidades, 3000 Torre 1 8th Floor
The challenge will arise when, at some point, we want to unify our databases to improve the quality of our data (Data Quality). Which will be our master data?
Makes sense, right? Imagine a large company with multiple business units that operate somewhat independently, each with its own distinct and independent systems. How many “Alexandre Martinho de Almeida” customers would be scattered across these databases? Imagine the chaos of running a marketing campaign, trying to ensure I don’t get called dozens of times as the same prospect.
I’ll give an example that personally annoys me. I’m a customer of a certain operator, and worse, I’m a customer of fixed-line phone, mobile phone, broadband internet, pay TV, and unfortunately, 3G for tablets.
Well, the bills go to different addresses, and I swear I’ve tried to have my full and correct name on all of them. But it’s impossible. They try, but they don’t know which products to offer me or my full relationship with them. A total mess. If they had a master, unified base—Master Data (call it what you want)—this would never happen. They would certainly know who I am, where I live, how to contact me, my level of engagement, and which products to offer.
Going further, in scenarios of acquisitions, companies buying other companies, imagine the challenge of having unified master data reliably to support the entire corporation.
Master Data’s importance grows exponentially with the size of the company, the quantity of interrelated products, independent business units, and so forth.
To create a perfect master database (Master Data), we need to observe MDM/DQ criteria to unify all four groups of data described above. During this unification, which involves cleansing, deduplication, standardization, and validation processes, we will use algorithms to select the best “name” for a person, their address, and valid documents. Only after this process will we have a consistent and reliable database—our Master Data.Tools
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