What is Master Data Management?


Your essential business guide to MDM

Master Data Management (MDM) brings your data together to create a single, accurate, view of your data throughout your enterprise. This guide will explain everything you need to know about Master Data Management.


What Master Data Management is and why you need it

Are you puzzled by what Master Data Management (MDM) is? 

Or do you understand the concept, but can’t see how it helps companies like yours? 

Whichever you are, this web page tells you everything you need to know.

 It starts by defining master data. Then explains why it’s important for both you and your customers.

 Next, you’ll discover what Master Data Management is and the benefits it can offer you.

 Finally, we consider a world without Master Data Management. Which could be the world you’re in right now. 

And if you don’t have time to read everything now, you can download a short whitepaper, below, which will provide you with more useful insight. 

Find out what MDM is and why you need it


Overview of Master Data Management

Master data can take the form of product, customer, supplier, location, information and more. And Master Data Management is the efficient management of this master data, in a central repository, providing you with a single view that eliminates costly inefficiencies caused by data silos.


Here’s three example scenarios of how it works in practice:

A customer has married and is no longer using their maiden name. In which case, orders, promotions and other communications are sent to the same person and at the same address. Twice. MDM resolves duplication by allowing you to retain a single trusted golden-record.

Should you wish to introduce a new product to market, with MDM, you now have just one system of record, meaning you only need to make an update once, in a single place, for the change to be reflected across all other connected systems.

If someone in sales enters the wrong company name in the billing field such as Company Ltd rather than Company (EU) - an invoice is raised on 90-day payment terms for the wrong organization, and you don’t find out until day 89. The result: 90 days lost cash flow.

These scenarios highlight three primary challenges that you may be facing today:

1. You have numerous data silos and multiple versions of your data.

2. Your reliance on people and automated tools leaves you vulnerable to data handling errors.

3. You don’t know which elements of your data you can trust.

To avoid these issues, your data needs to be governed. And this is where Master Data Management comes in.

Master Data Management definition

Master data is a single source of common data used across multiple business processes. For example, reference data, such as currency codes; customer data, such as contact records; product data, such as a product in an e-commerce environment that lists product information and specifications.

Master Data Management introduction

Master Data Management, is an organization-defining approach to data management and is the foundation for increasing the value of your analytics tools.

But it’s not about the technology, that’s merely the enabler. Instead, it’s about the process of connecting information together to help you meet your business objectives.

When information gets better fewer mistakes are made
- MDM validates data meaning the number of errors is significantly reduced.

Research from Ventana discovered that 46% of organizations that do not have a single source of product information use spreadsheets - and 47% of those said that they find product-related errors frequently. And for 19%, those errors have a major financial impact.

Another report from ‘Demand Gen’ revealed: Almost 85% of businesses said they’re operating databases with between 10-40% bad records.

And regarding prospective customers, the report said: 62% of organizations still rely on prospect data that is 20-40% incomplete or inaccurate.

And the staggering cost of this poor data? According to Ovum Research, at least 30% in revenue. As your business grows, your IT landscape will evolve, and, undoubtedly, become more complex. Acquisitions, expansion into new countries, and growth in new markets can result in you being lumbered with different systems, applications, and technologies.

And it’s this fragmented environment that creates your most significant data management headaches.

What is the role of Master Data Management?

The role of Master Data Management, at its heart, is simple: to place, manage and correct your data from one place. Because data that isn’t siloed, data that’s accurate and accessible and can be easily managed and shared, has a great many business benefits:

1.Launch products up to 4X faster.

2.Reduce refunds and customer service queries.

3.Slash your marketing costs by up to 50%.

4.Reduce supply chain complexity.

5.See all your customer information from every source at a glance.

6.Improve operational efficiency.

7.Target customers with more effective marketing and sales promotions.

8.Free up resources to focus on adding more value in other areas.

The more control you have over your data, the more power you have to meet your business objectives.

"To me, all the front-office systems such as customer relationship management (CRM), business intelligence and even enterprise resource planning (ERP) on the back end are all data. In the end, MDM is the key contributor to making sure all these systems have the right data and the right data quality.”

- Hema Kadali, Director, Information Management, PwC


Master Data Management glossary

PIM, DAM, CDO, data enrichment, matching and linking ...

Not quite sure what all those abbreviations, terms and hypes mean and how they relate to Master Data Management? Get your MDM facts straight in this A-Z of MDM.


Master Data Management uses

As you know, extracting insights from your data to make smart business decisions on products and services has its challenges, including:

Poor data quality from operating multiple disconnected data silos.

Having a lack of central control makes it difficult to maintain standards and compliance.

Lack of insight and understanding of historical customer behavior.

The purpose of Master Data Management is to alleviate these challenges, and it does so by:

1.Consolidating disparate data sources

2. Matching and de-duplicating records

3. Improving organizational views

4. Managing access control and ownership

5. Cleaning data, improving its quality and standardization

6. Integrating external data

Knowing your data better could save you vast sums in research, development, marketing and sales. If you’re launching new promotions, it helps to know who has already bought from you, particularly if you want to reduce the cost of wasted efforts.


Master Data Management benefits

Master Data Management is a fundamental part of any information management strategy because with better data management comes control. And with control comes insight and better decision making.

Master Data Management connects and shares enterprise data from your ERP, CRM, eCommerce platforms, supply chain systems and more - allowing you to create a 360° picture of your data. With this information, you’ll learn everything from the buying history of your customers to product availability and supplier interaction.


Master Data Management will boost your profits by giving you the insight to:

Focus your product, service and business efforts on the things that increase sales

Deliver a highly personal service and engagement experience

Defocus from unprofitable activities that drain time and resource

What underpins these benefits is that Master Data Management enables you to:

Eliminate silos of master data that exist in different departments or business units

Reduce risks associated with regulatory compliance such as the GDPR

Improve operational efficiency by aligning organizational and operational data

Increase collaboration between internal and external groups.

Enhance the customer experience by using insights to drive business performance.

Save resources by automating a number of essential data processes.

Master Data Management how to get started

“From the dawn of civilization until 2003, humankind generated 5 exabytes of data.
Now we produce 5 exabytes every two days … and the pace is accelerating.”

– Eric Schmidt, Executive Chairman, Google

A problem for some, an opportunity for others – with the right data management tools in place. Perhaps you’re considering whether your business needs to adopt a Master Data Management solution. Or maybe you’ve decided it does but you don’t know where to start. If you already have some Master Data Management capabilities, perhaps you feel they should be updated. If any of these scenarios relate to you, it would be worth stepping back and considering Master Data Management with a business mindset.

These three steps are an ideal starting point:


Align with, and help deliver the business vision

Every company has a different business vision. You just need to establish what your vision is, where it’s going in the future and who owns it.


Quantify and demonstrate the business value

The business worth of MDM must be clear. Justifying the ROI upfront is essential to making a good business case. The value of MDM is made visible by using metrics that each have a business owner – Financial, Strategic, Process and Operational.


Choose the right strategy and approach

Your data strategy should explain how MDM will support your business vision and how you plan to gain the necessary MDM capabilities.



Master Data Management use cases


There are a number of scenarios you may be experiencing that give you cause to consider a Master Data Management solution.

Your data is scattered across multiple geographies, departments and domains.

You want to identify inaccurate data and clean it to gain a single view.

You want to store your clean master data in a data warehouse so it can be interrogated by BI.

Your data related processes are slow and very resource demanding.

Take this scenario we encountered recently with one of our clients, Kraft-Heinz. They needed to ensure all their internal systems and external websites had the same accurate, detailed product information. Which was a challenge, given they had:


More than
23,000 images

Over 200
different brands

And all the information was held in five different systems.

What's more, any new product or data had to be added automatically – everywhere. The same for any changes or deletions. So, what did they do? They brought in a Master Data Management solution to bring all their product and nutrition information – including images and marketing materials – into one place to create a single approved source of enterprise master data. This single source is now used by all Kraft Heinz's internal business systems and external websites, as well as by third parties such as Amazon, Walmart and others. And Kraft Heinz say themselves:

“Excellent knowledge of Master Data systems, including PIM, and able to amplify the benefits for our company.”

- Wayne Phillips, Ecommerce Systems Manager, The Kraft Heinz Company

A World Without MDM


A World Without MDM is a strange place indeed. A place where the things your customers order are not always what they get, where you’re often bombarded with the same offer multiple times and where sometimes there’s a mix up with your products …

Master Data Types


Master data is a single source of common data, but there are many different types, and often it’s duplicated across the business and stored with little agreement on standard definitions.

This creates inconsistencies, hindering your ability to use your data to reduce operational cost and increase customer spend. And, according to ‘The Information Difference MDM Landscape’, 25% of organizations have 15 or more data repositories. This is something Master Data Management aims to resolve – allowing you to manage and govern data as a single source of reference.

Customer data


Perhaps the single most common type of master data is customer records – names, email, postal addresses, purchase history and more. 

Customer data is central to a large number of operations as better insight helps you provide an experience that has the potential to increase customer satisfaction by as much as 20%.

Product Master Data Management

Product DATA

Description, cost, unit of measure, image, and so on, are all examples of product data that helps your customers make informed buying decisions.

Studies have even shown giving people better product information boosts online sales from 17% to 56% - so, get product information right and you significantly boost sales.

Supplier master data management

Supplier DATA

With greater control over your data you can see all elements of your supply chain helping you manage and organise suppliers.

And by doing so, the result is more control, closer relationships and an improved supplier and product onboarding process - amongst many other benefits, which you can find here.


Party DATA

Recording party data allows you to create the relationships that are important to gain a true understanding of the importance and value of each of your records - and used wisely, this will give you a significant competitive advantage.


Location DATA

If you want to analyse the geographic shopping habits of your customers, gain a deeper understanding of where your products are or simply improve the efficiency with which you manage physical stores, it’s essential to record location data.


reference DATA

Keeping reference data fields such as country, currency and conversions up-to-date is critical because they affect key business decisions, impact the performance of your systems and are needed to meet regulatory compliance.


MDM Key strategies


If you want results from your Master Data Solution on day one, these are some of the most important points you should consider when building your project plan.

Develop a Master Data Management roadmap

Start, and work, with the end business goal in mind. This will help you define, shape and follow a roadmap that will keep your project team focused and aligned.

The roadmap typically ties together the deliverables agreed from the business case:

Identify the issues that need to be solved.


Create the project strategy plan that describes the timeframe (the “when”), the vision for the initiative and how Master Data Management supports the overall business strategy (the “what”), and the value and benefits of the program (the “why”).

List the gaps and gap closure strategies (the “how”).


Create a high-level Gantt chart for the program over the next few years (beyond implementation).

Setting your master data management objectives

Identifying the master data domain(s) you should target will be one of the first things you do. This will define the direction, focus and ownership of the project moving forward, and help you reach the end objective in less time, with minimal disruption and without the expense of having to correct mistakes.

Master Data ownership

Who owns the data? Who controls it? Who oversees it? If data has not historically been central to the day-to-day working of your business, you may find there are many different data owners within your organization you need to identify and pull into the project (this could be one of the reasons why you’re looking into Master Data Management in the first place).

Once you’ve identified the owners, consider the roles of each in your new single and central data world. Clear and concise direction is vital to ensure your data retains its value long into the future – establishing a collaborative stakeholder team may be the best way to achieve this.

Master Data Management challenges

As with any large-scale IT project, you’ll be faced with barriers to overcome – the most challenging of these are seldom technically led:

Stakeholder engagement

There’s a risk of MDM being seen by users as purely an IT initiative, so you need to educate your business stakeholders on the business benefits of MDM.

Gaining executive sponsorship

MDM involves considerable change, therefore sustaining executive support is essential to business-wide adoption. To achieve this, it’s important to demonstrate quick wins and value.

Transforming the culture

You may find, even after gaining executive sponsorship, there is resistance to change from some areas of the business - particularly if they feel their role or function is under threat.

Managing requirements

While gathering MDM requirements, sidestep unnecessary requests as this will help you avoid making bad design decisions that could be difficult to reverse.

Operating to budget

As the project develops you may uncover things that were not obvious in your initial investigation. Here, understand what impact the new development will have on your budget and what the change means for the business.

Keeping to time

As with any enterprise wide IT project, things change. It’s essential to keep your plan flexible and adaptable – here, communication to your stakeholder group is critical so everyone’s expectations remain joined up.

To overcome these challenges, one of your greatest assets will be your ability to communicate the long-term business benefits of moving to a data culture.

Master Data Management technologies


As a technology agnostic platform, Master Data Management helps extend the value of your existing IT investments because it integrates and works with any other system you run.

Master Data Management is based on data linkage, but to manage the various types of data, MDM covers different data domains, making it more relevant depending on your focus or business challenge. For example, if you want to extract more profit from customers and prospects, building your MDM platform around Customer Master Data Management (CMDM) will help you engage with your customers more accurately.

If your challenge is to get products to market faster or improve omnichannel efforts by making better connections between your online store and in-shop system, a Product Master Data Management (PMDM/PIM) approach is going to work best for you. But for a wholly connected product and customer journey, you’ll want both – and this multi-domain setup is the direction many of the world’s largest companies are going as it gives them the greatest insight into their data.

How Master Data Mangement helps you


Customer Master Data Management

Accessing customer data quickly by having a single accessible view has a number of benefits when it comes to creating and delivering personalized products and services. It …

  • Helps you cut costs
  • Increases average order size
  • Helps you retain customers for life

Your customers expect an increasingly personalised experience, no matter how or where they engage with you.

And being able to do this offers significant rewards, as, according to Accenture, simply knowing a customer’s purchase history makes them 65% more likely to choose you.

And that’s not all. Research also confirms that they’re more likely to pay a premium for an exceptional experience from a brand they trust.


Product Information Management

Without accurate information and a connected set of systems, getting your products to market quickly will always be a challenge.

Many organisations rely on multiple systems, an army of people, considerable time and money and … excel. This is unnecessary.

Product Master Data Management (also known as Product Information Management or PIM) brings all your data into one place to create a single approved source.

This approach worked with Marks and Spencer, a British institution, which had 585 different product attributes and eight international websites using five languages. With PIM in place, M&S:

  • Used rules to control their data.
  • Tailored their product range for each country.
  • Managed all the content in English.

key principles of Master Data Management


Imagine you have entered the wrong Stock Keeping Unit (SKU) into your system – when your customers go to search for a particular item they are presented with something very different. You lose a sale and your customer loses confidence. Perhaps because you have duplicate customer information, you send them multiple offers, perhaps at different rates, for the same thing – causing confusion and reducing the chance of closing a sale.

These are examples of a world where Master Data Management is not being used, data is not connected, and customer experience suffers as a result.


Combining data from isolated systems produces a complete picture


Accurate, well-structured data is easier to use


Linking entities creates new information


Collaboration reduces inconsistencies, promotes reuse and improves integration


When you know where your data is, it becomes easier to secure

Master Data Management data governance

“I would advise that a data owner in any organization puts a robust data governance structure in place from which everything else can flow.
This will help to drive commercial value and ensure that the organization is fully compliant”

– Nina Barakzai, Head of Data Protection and Privacy, Sky Group

There are two things worth noting when it comes to data governance:


1. Any data governance policies you put in place should free you to focus on achieving business outcomes.

2. A recent Ventana Research survey indicated 50% of all companies consider the establishment of data governance a key capability for product information management.


Without effective data governance, no Master Data Management project can succeed.


Master Data Management architecture principles

You can’t build a house without a blueprint, and the same holds true for Master Data Management projects.
Setting the right foundation and architecting the solution while keeping long-term goals in mind is crucial.
Here are five fundamental principles you should consider when architecting your MDM project:

Undertake data profiling to understand the current state of data quality

Consider the data integration mechanisms you will use to consolidate your data

How will you design an extensible master data repository?


Are data matching and survivorship functionalities a key part of your solution?

How can you seamlessly synchronise your master data?


Database operations management

Searching through millions of records or executing complex and resource-intensive requests depends heavily on the speed of your database. On the scale you’re operating at, high-speed data access is essential – and that’s where in-memory comes in.


Data security management

Data security management is a way of maintaining the integrity of your data and ensuring it’s not accessible by unauthorised users. To ensure that you can have a configurable, extensible security unique to your business needs, administrators can define whether users can perform certain actions on specific objects, and enable user access to certain areas but not others. Furthermore, configuring privilege rules, allow you to determine which users can maintain groups of attributes, business rules or workflows.

building blocks for MDM success


Whether your organization is just starting with Master Data Management (MDM) or it’s trying to move on from a previous, less than ideal, experience, there’s a need to understand the fundamental building blocks for Master Data Management success.

How to align your business

Understanding the value of Master Data Management can be a challenge. If you're thinking about how an MDM strategy would fit into your organization, then a good starting point is to hear from a seasoned, independent expert.


How to find the right solution for you

Customer MDM, product MDM; in the cloud, or on-premise – the specific elements of the MDM solution you decide on will be defined, largely, by these factors:

Will the solution solve your particular business challenges?

Do you have a CAPEX budget dedicated (choose on-premise), or would you rather fund through OPEX (choose MDM in the cloud)?

Are you focused on product, customer or multidomain MDM?

Is the scope of the project local or global?

Can the MDM solution scale and futureproof your data requirements?

Is the MDM solution flexible and does it have a broad set of data integrators?

There are of course many other considerations, but any good Master Data Management vendor should be able to talk you through your best options, in a language you understand.


How to instill universal governance


With your data governance team, you must review the current state of your data governance program before creating a strategy for improvement.


How to achieve Master Data Management success

The more you understand the complexities of your busienss challenges and needs, the more deliberately you can begin to choose your Master Data Management solution. To help, here are 7 steps to making your MDM project a success:


key considerations


If you want to increase sales from your customers; connect your organization to reduce operational pain and cost; or simply want more insights so you can make business decisions based on fact; then Master Data Management is essential to you. But before you embark on your MDM journey, here are four key considerations:


Build the business case

Since there are many stakeholders and factors involved in agreeing to any large-scale IT project, we’ve developed a guide you can follow to help build the business case.

Align with, and help deliver, the business vision

No large-scale IT project can ever work without first being aligned with the vision for your business. That vision should be built around a roadmap that highlights challenges and obstacles you need the solution to overcome. Starting and continuing with your business goals mind gives you the greatest chance of success.


Choose the right strategy and approach

Consider the project delivery options open to you. For example, a waterfall approach helps you keep things linear and clear, moving through the project phases in a structured way. Alternately, an agile project methodology takes more of an iterative approach, relying on good team collaboration to ensure feedback throughout the project is documented and fed back.

Quantify and demonstrate business value

If you’ve developed the project with a long-term business first vision in mind, you should also consider what success looks like to you.


Master Data Management Features


Broadly speaking, the features of your Master Data Management solution should enable you to increase the revenue generating potential of your data by providing you with a single view. But you’ll still want to consider the specific features of your MDM solution to ensure it gives you the ability to achieve good data governance and all of the business benefits this affords you.

Matching and linking

Use matching algorithms and survivorship rules to identify and merge duplicate records from disparate source systems to form accurate single records.



Localization helps you supply region-specific information to your geographically dispersed teams and channels, in their native language. Automation features also allow you to identify content in need of translation or re-translation, as well as currency and unit conversions.


Data enrichment

Seamlessly incorporate data from external third-party sources and consolidate and cleanse with your existing data to improve overall data quality.


Business rules engine

Business rules allow you to centrally modify data meaning rules only need to be changed once with the effect being applied everywhere it’s used, e.g. import, workflow, user interfaces and approval.

Consent management

Capture and manage consent as required, by the GDPR or any other data protection regulation, of each contact stored within your MDM solution or within the source of origin.

Data synchronization

Connecting suppliers, quickly and easily, to your product catalogues, improves the data exchange throughout your supply chain - this reduces errors and creates accurate and up-to-date information.

Master Data Management vendor management

Often, success is as much about the vendors you choose to work with as it is the MDM technology you select as a great solution implemented badly can be far more damaging and costly than something with fewer features implemented well.


Think business-first

when vetting potential vendors, consider those that approach your challenges from the point of view of business first. Your vendor should be able to understand your unique pain points and trace those to the right solution design – rather than force fitting a solution to the problem.

Be the customer

your customers should be at the heart of your solution. Look for an MDM solution that helps you engage better with your customers, rather than one that leaves you with a long list of unused features, but which you pay for anyway.


MDM implementation styles


Master data management provides a single source of truth for your data.
But to get a solution that delivers value back to you from day one, you’ll need to implement according to your business needs.

Here are the 4 most common Master Data Management implementation styles to consider:

Relational MDM implementation

Registry: Only reference IDs are stored within the MDM solution

Here the master data isn’t consolidated but maintained as a set of records mapped to attributes stored in the source systems.

For example, a company maintains different types of customer information across various external systems. A registry is used to identify and associate these different types of customer data with external systems.

Golden records are assembled by using complex queries, and the pay-off is a real-time central reference can be made with little or no infrastructure investment.

Consolidation MDM implementation

Consolidation: Data is mastered and governed within the MDM solution

Master data is consolidated from multiple source systems into a physical golden record. However, any update made to the data is not returned to the original sources.

For example, a company may wish to combine all of their sales channel data across multiple lines of business and regions into one record bank so that data analytics may provide meaningful information and insight.

The pay-off is consolidated MDM hubs are quick and inexpensive to set up.

Co-existence MDM implementation

Co-existence: Data is mastered and updated in more than one place

Co-existence brings multiple sources together to create a physical golden record, whilst updating the original source systems.

It is common for multiple departments in a business to have their own customer databases, and they must be able to edit and use that customer data for their own work.

The pay-off is the linking of centrally governed data back to the source systems.

Transaction/centralized MDM implementation

Transaction/centralized: The MDM solution stores, enhances and maintains all the relevant master data

Transactional/Centralized implementations establish a well-managed and governed central repository for master data, which hold a set of "golden records" that are accessed in a read-only fashion by other systems throughout the business.

With this approach, by having the MDM hub extending governance over the source systems, there is shorter latency in data flow.