Master data should not be confused with internal or external reference data<\/a> (such as country codes or currencies). While reference data is considered a subset of master data it is much more static and changes less often than master data.<\/p>\n Companies gather data from a wide variety of sources, both inside and outside the organization. There may be differences in how this data refers to common, key entities, such as customers or company offices. This may be due to different departmental naming conventions and systems, for example.<\/p>\n It is therefore vital that companies are consistent in how they classify and refer to these key entities. Otherwise, data risks becoming inconsistent and inaccurate, undermining the success of operational activities such as marketing campaigns or sales calls and analytical activities such as business intelligence<\/a> or reporting. Master Data Management is therefore central to data governance<\/a>, particularly for larger organizations with multiple systems and many departments\/offices.<\/p>\n To ensure master data is managed successfully business and IT have to work together to create a master record (sometimes called a golden record), that contains what an organization needs to know about critical entities.<\/p>\n This has to be agreed by all stakeholders, including data stewards<\/a> and data owners, to ensure consistency. It is then used to harmonize data across all of a company\u2019s systems. All data has to be cleaned and transformed to ensure it matches the master record as soon as it is created or enters the organization. Systems also need to be regularly reviewed to ensure that no inconsistencies have crept in.<\/p>\n Master Data Management is a key part of overall data management<\/a>, benefiting companies in three ways:<\/p>\n Master Data Management is a major project that must be rolled out consistently across the organization. Businesses need to overcome challenges around the complexity of their systems and operations and also get agreement from different business units and departments on master data standards to guarantee consistency.<\/p>\n <\/p>\nWhy is it important?<\/h2>\n
How does Master Data Management work?<\/h2>\n
What are the business benefits of Master Data Management and the challenges to success?<\/h2>\n
The Benefits of Master Data Management<\/h3>\n
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The challenges to successful Master Data Management<\/h3>\n
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