Master Data Management (MDM) – Going Where the Enterprise Data Warehouse has Gone Before

May 4, 2011
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Word_MDM There is a lot of industry buzz on Master Data Management (MDM). It would appear from this chatter that MDM is a new thing. But if you look under the covers, you’ll see some aspects of MDM that look mighty familiar.

Word_MDM There is a lot of industry buzz on Master Data Management (MDM). It would appear from this chatter that MDM is a new thing. But if you look under the covers, you’ll see some aspects of MDM that look mighty familiar.

The reality is that for many years, whether people realized it or not, the Enterprise Data Warehouse (EDW) has served as the default MDM repository. This happened because the EDW has to reconcile and produce a master list of data for every data subject area that the business needs for performing enterprise analytics. Most of my customers referred to this as reference data management years before the term MDM was coined.

These subject areas generally include customers, products, suppliers and employees along with variations based on industry. Each subject typically has hierarchical relationships within it (such as products, marketing, and sales territories) that need to be managed.  Again, all this is done to support enterprise analytics.

Naturally, the data for each master data category has to be consistent. In data management terms the process to achieve a master list for each subject is referred to as conforming dimensions. This means as you gather master data from disparate enterprise applications the data-integration process must create one consistent list for reference data such as products, customers and suppliers. This process usually requires creating a surrogate unique key for each master data row and involves de-duping lists. This master list enables enterprise business intelligence and analysis.

The fact that EDWs have served as default MDM solutions means there’s a history there – a history you can learn from. Before you go out and buy an MDM solution it’s important to be sure about what you need to buy.

The history of having the EDW serve as the default MDM solution shows that it has encountered two barriers to success:

  • Too many “master” lists or multiple “single versions of the truth”
  • The assumption that technology would be a silver bullet

See my post next week for an explanation of these two barriers faced by enterprise data warehouses serving as default MDM solutions, and a wrap-up of my thoughts on the subject.