Oracle DRM Blog

Master data management is a booming area of specialization in recent years. In the beginning this maybe more of an IT domain, where professionals deal only with metadata. But over time, the one that yields true benefits are actually from the business, and it has huge implications for Business Intelligence.

Here’s a pretty good definition of Master Data Management I found: “MDM is the practice of defining and maintaining consistent definitions of business entities, then sharing them via integration techniques across multiple IT systems within an enterprise and sometimes beyond to partnering companies or customers. More simply put: MDM is the practice of acquiring, improving, and sharing master data.”

In an Internet-based survey that TDWI ran in mid-2006 (based on 700+ respondant), a whopping 83% of respondents reported that their organizations have suffered problems due to poor master data. Poor-quality master data creates problems mostly within data warehousing and BI—but also outside it.

“The top three problems relate directly to BI, namely inaccurate reporting (81%), arguments over which data is appropriate (78%), and bad decisions based on incorrect definitions (54%). Others are general data management problems that sometimes impact management reporting, like data governance and stewardship limitations (53%), limited visibility for data lineage (52%), and no understanding of master data definitions (46%). Other problems cited by survey participants are business problems, like poor customer service (35%), inefficient marketing (32%) or purchasing (18%), and new products delayed (17%).

As with master data problems, the benefits likewise relate most strongly to data management practices, followed by general business issues. Near the top of the list are BI issues like accurate reporting (75%), better decision making (69%), and easier auditing of information’s origins (47%). Mixed with these are general data management issues, like data quality (76%), consistent definitions (65%), and data governance (39%). Low-ranked benefits are mostly general business issues, like risk reduction (33%), superior customer service (21%), and supply chain optimization (15%).

Inaccurate reporting is the leading problem and accurate reporting is the second leading benefit. The survey aside, most of the users interviewed pointed to reports as an area where both technical and business people seek improvement via MDM.

After Enron and WorldCom, many corporations requires accountability and executive actions are driven by audit paranoia. SOX can also be alleviated with MDM