In very simple terms, master data is integrated from various source systems containing bits and pieces of the master data. This integration involves merging, de-duplication, standardizing, cleansing, and other transformations. This integrated data is placed in a central repository and used as the reference for all other systems including Accounting, ERP, CRM and eCommerce.
Key Domains of MDM
Product Information Management – PIM
Even a mid-sized organization will be dealing in thousands of products, if all variations in terms of size, model, color, accessories, multi-product packages are taking in to account a PIM is unique due to the model incrementally changing, as products mature, new attributes will be added. Companies continuously try to bring variations of their products to suit the needs of a customer. Master data is required for the base product, add-on features and each of the thousands of permutations and combinations. A PIM allows management of the inventories, prices, discount policies, product profitability and enables Product Development and Management as it gives a complete view of the product portfolio.
Employee Information Management – EIM
EIM is perhaps one of easier domains to manage. One of the benefits of having an Employee Master Data Management is that it enables centralization of the payroll, employee communication, User administration and security management (both IT level and Physical level). There are not many MDM applications around employees. This is because most of the progressive organizations have single, centralized systems to manage their employee related activities.
Customer Data Integration – CDI
CDI is perhaps most popular domain for MDM however customer data has a unique set of challenges. CDI can be called most rewarding and also among difficult MDM initiatives, the difference between CDI and other domains of MDM is that customer data is mostly generated externally.
Vendor Information Management – VIM
After Customer Data Integration, this domain has most direct influence on organization commercials, most of the CDI principles and benefits also apply with VIM and enables: maintaining a blacklist of vendors; negotiating better deals as vendor data consolidation provides the true relationship value; consolidated billing and payments; standard contractual and legal agreements.