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What is Master Data?

by Jodee Hale-Schmid

August 4, 2010

Authored by Jim Whyte, Director of Solutions Consulting, Utopia, Inc.

Definition: Master data is reference data that is shared or exchanged across strategic applications, work processes, lines of business, or enterprises.

My definition has been personally field tested for the better part of 20 years and has served a number of Fortune 500 organizations very well. For me, the focus is on the sharing and leveraging of the reference data across the various organizational boundaries that master data can and must cross.

The definition is based on the goals and objectives my former employer was trying to achieve back in the late 80’s – ERP consolidation, moving from a decentralized, LOB/regional multi-national company to a global, top-down, centralized management, standardizing applications, infrastructure, business processes, roles and responsibilities, and reporting. To achieve that, we needed common reference data across our solution landscape. Does that sound familiar to you?

We were reducing the number of ERP systems, moving to four regional instances, based on SAP software (common applications). This required a broader view of master data than most are willing to adopt today. We wanted to ensure that our four SAP instances were configured identically. It was the start of our implementation of enterprise data governance, data standards and standardized master data content. We knew we couldn’t achieve one, without the other .

I often wonder if I would have the same deep belief in my MDM definition and support of centralized data governance if it would have been possible to run our entire enterprise on a single instance back then. I might not have been as concerned with managing configuration table changes across four production instances (e.g. order types, pricing conditions, and unit of measure, currency and exchange rates in addition to customers, vendors and materials) are system development landscape with common data content across development, user acceptance, training and production environments.

We successfully implemented a global data warehouse a few years following our ERP consolidation and we recognized that all fifty, yes 50, master data objects and hierarchies we maintained in our propriety MDM application were either enterprise KPIs or global reporting dimensions in our data warehouse. That wasn’t by design up front, but it became a benchmark for us when determining what additional reference data objects we should consider to centrally manage on behalf of our enterprise.

So what is master data? It is somewhat in the eye of the beholder – but I firmly believe it is those data objects shared and exchanged across your enterprise, that are core to your business operations. Additionally, they are the data objects that you will pick up and migrate from one strategic application to the other, as they are timeless. They are your enterprise “family jewels” and will be handed down from one generation to the next.

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