A Seamless Approach to Reference Data Management

Reference data underpins every transaction, decision and report. Yet, many organizations only notice its importance when inconsistencies slow down operations, create reporting errors or block regulatory compliance.

Managing reference data proactively ensures seamless collaboration across systems and partners. It also enables your employees to trust reference data as the validated reference. Having consistent reference data can help: 

• Reduce costs and mitigate the risks of inconsistent and erroneous data integrations 

• Meet regulatory compliance requirements 
• Support process management and operational efficiency 
• Reduce inconsistencies in data structures and data values between systems 
• Improve reliability of analytics and reporting
• Increase data quality by embedded data validations  

Govern reference data with confidence 

To properly maintain reference data sets, you need a strict data governance process. Data sets are versioned and therefore any change will have an impact on downstream business systems. Reference data governance ensures that the organization has a single source and that everyone refers to the same entity using the same terminology. 

However, even large organizations manage reference data sets manually. The manual approach causes efficiency bottlenecks when changes must be pushed to all applications. Governance of reference data includes managing changes and maintaining a crossorganizational process to ensure data will be consistently shared. To strengthen control, versioning and lineage tracking are also essential capabilities, allowing data stewards to view change history and downstream impact before approval. 

Reference data and master data: Understanding the difference 

Reference data is often referred to as a subset of master data. It’s probably more correct to say that reference data overlaps with master data, and both are, generally speaking, low-volatility data. The following definitions provide further distinction: 

• Reference data is defined as any data used to characterize or classify other data, or to relate data to information external to an organization.  ( Chisholm, 2001 )

• Master data, on the other hand, is data about the business entities (employees, customers, products, financial structures, assets and location) that provide context for business transactions and analysis.  ( DAMA-DMBOK, 2019 )