Master Data Management

Master Data Management is a hot buzz word right now in the Information Management industry...but what is it exactly? At its core, master data management is a methodology to identify your most organization's most critical data and then place business rules and controls around them. Many authors, consultants, and especially vendors will try to make MDM sound more complicated or difficult than that, but it doesn’t have to be.

Master Data Management brings many benefits to an organization.  It improves the quality of the data and all reports that are generated from it.  It prevents your organization from errors that can cost money or public embarrassment.  And, most importantly to the executives, it can help keep them out of jail for Sarbanes-Oxley violations because it helps prevent fraud.

MDM helps improve the quality of the data because everyone who uses that critical data across the organization come to a consensus of what that data is, how it should be used, what business rules should be placed around it, and who is in charge of keeping up with everything related to the data fields. Because MDM places a focus on specific sets of data, the organization as a whole will be more inclined to ensure that the data in the fields is of high quality.  Additionally, hard coded business rules, controls, and reporting should ensure that bad data doesn’t enter the system, and if it does, it is quickly removed.

MDM can also help prevent errors.  When controls and business rules are not placed around data, it is very easy to for mistakes to be made.  There is nothing that prevents bad data entered into a data field from ending up in reports, in communications with a client or customer, or on the nightly news if it is bad enough.  It is bad enough to lack controls, but when you do not have controls around your most critical data, you are asking for trouble.

With the enactment of Sarbanes-Oxley in 2002, executives of public companies are now responsible for the financial statements that come out of their organization.  If they are found to be fraudulent the executive can be forced to spend time in jail. Many executives have asked their management to develop a strategy to ensure compliance with Sarbanes-Oxley, and MDM is often a part of this strategy.  By placing controls and business rules around critical data, along with reporting, information, and analysis, many people are able to review and ensure that the data is clean and accurate.