Master Data Management from a Process Perspective
Master Data Management, or MDM for short, is a process for defining and managing critical data of an organization to provide a single point of reference. The master data may include reference data, which are the permissible values, and analytical data that supports decision making. But what is Master Data Management really, and what is the point of it?
Well, there are a lot of definitions and explanations on the internet and in literature. Most of them similar but also with slight differences. Wikipedia offers the following explanation of Master data management;
“Master data management has the objective of providing processes for collecting, aggregating, matching, consolidating, quality-assuring, persisting and distributing such data throughout an organization to ensure a common understanding, consistency, accuracy and control in the ongoing maintenance and application use of this information.”
For most of us, even after reading this, the question remains; “What is Master Data Management really, and what is the point of it”? In our line of business we come in contact with the concept of Master Data Management quite frequently. A lot of companies are in the process of, or considering to start, looking at their data from a Master Data Management perspective. More often than not, the discussions about Master Data Management tends to focus around tools and systems. While systems and IT is an important part of Master Data Management, it is not what we at NEXTAGE believe is the key to MDM.
Our approach is from a process perspective where the data is in focus and integrations is the key. We recognize that most companies have several tools and systems where data is created, we call them “Authoring Tools”, and others where data is used or consumed in some manner, we call them “Viewing Tools”. We also recognize that many tools can be both an Authoring Tools and a Viewing Tool at the same time. This complicates it if you try to implement Master Data Management from the perspective that one system is the master system that owns all data.
We like to look upon data almost like an organism that is created at some point as the result of a process or event and that this data will grow, evolve and change over time. During its lifecycle you will continue to add information and dimensions to the data, adding value to it, changing the way you look at it and how you consume it. To do this you probably need to use different systems with different toolsets depending on how you are working with the data at the time. This means that the same data has to exist in several different systems at the same time. So how does this align with Master Data Management from the master system perspective? Short answer; not well at all. If you choose to implement a master system solution, you will likely end up with cumbersome processes, expensive integration projects and rigid information models. The master data must always be kept consistent and up to date. Nobody will be able to change anything without everybody being involved every time.
Instead, we like to propose implementing a flexible information model where each system is used to its full potential as it is intended and Master Data Management is achieved through simple integrations using common property sets representing the Master Data.
Each system provides information relevant to the domain it represents. For instance; models, drawings, BOMs and analytical data is collected from CAD and PDM, while information about suppliers, inventory, cost and transactional data is collected from ERP or similar. Key markers are published downstream through integrations and can also be pushed upstream for viewing and consumptional use. These keys are consistent through the entire information model and used to search for, identify and access information.
Getting back to the original question, “What is Master Data Management?”
For us at NEXTAGE is not about which system will master of all data. It’s about applying a consistent principal how to manage data when it exists in multiple systems and is used by many people simultaneously for different purposes. It’s about deciding to what domain information belongs and where it is best managed. For instance; is it prudent to put information about supplier on a drawing, creating a direct dependency between the drawing and the supplier management process? Do we need to manage hierarchal CAD assembly structures in our ERP-system? We might be better off with single level flat structures. Or vice versa. It’s about using the best suited tools and methods for working with data while still making it accessible from other access points.
And finally, “What is the point of it?” Well, there are several good reasons to consider how you manage your data. A lot of time and money can be saved through a proper Master Data Management plan. It will enable smoother collaboration, easier access to information, improved data quality and increased use of your data. Much of this is achieved simply by making sure that the information can found using the key markers. It may be published to other domains in the information model but any authoring and editing is performed in its source domain with familiar tools. Thus source data is kept updated through day to day business and normal processes. Master Data Management shouldn’t complicate thing, it should make them easier.
If you want to know more about how we at NEXTAGE think about Master Data Management and how we approach it, feel free to connect with me on LinkedIn or any of my colleagues at NEXTAGE.