What is Master Data?

Master Data is the collective term for data a company manages that is non-transactional but rather statistical in nature. In this article, we explain in detail what Master Data means.

What does non-transactional data mean?

Transactional data is data that can be linked to a particular transaction such as, for example, the placing of an order by a particular customer. Both the order itself and the relationship between the order and the customer are transactional.

In contrast, the order consists of one or more products. The data of these products themselves is quite static and is therefore considered master data. Indeed, this type of product data is unlikely to be constantly changing. This is because the dimensions and specifications of your product are the dimensions and specifications. These, once defined (in your master data system) will not change easily.

Note that stock information of your product is in fact not master data, but transactional data. This is information that is highly volatile and linked to a transaction.

Customer data linked to the order is also quite static and is therefore considered master data and not transactional data. Indeed, your name and surname are quite static and rarely, if at all, changeable.

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The different forms of master data

Master data comes in different forms. The best-known form of master data is product master data. In your master data system or product information system, you will manage the static attributes of your products and the hierarchy between them.

As already described above, customer master data is another form. In today’s world, it is not unthinkable that your customers buy through different channels and that your customer data is kept in different systems. Think ERP, e-commerce, and maybe even customer data is kept in a spreadsheet or local database. All these sources will most likely contain a piece of the truth regarding customer data.

A central customer master data system can link input from different sources (ERP, e-commerce, spreadsheets, other DBs, …) so that one central record of your customer exists in this system. This can be fully automated where smart automated rules determine which source system holds which piece of the puzzle. You can then send out this central single-source-of-truth image of your customer to your various channels. You obviously want to approach your customer in a uniform way via the various touchpoints in your organization with the same name, surname, and customer ID, …

Besides these two data objects, there is a whole series of data objects that are part of master data and that can be managed centrally in a master data management system. Think for instance of managing supplier master data, managing your own shop locations, employee master data, …

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