Master Data Management

Full text

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Master Data Management (MDM) –
Strategies, Architecture and
Synchronisation Techniques
Pavan Kumar Purohit
B9021 – Data Management
March 31, 2014

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Table of Contents
1. Abstract ................................................................................................................................................. 3
2. Introduction .......................................................................................................................................... 3
1. Master Data ...................................................................................................................................... 4
2. Data Domains .................................................................................................................................... 5
3. Master Data Management ................................................................................................................ 5
3. Building a Business Case for MDM........................................................................................................ 7
3.1. Business Case #1: Merger of two companies. ................................................................................... 7
3.2. Business Case #2: Replacement of an ERP application ...................................................................... 8
3.3. Business Case #3: New application introduced ................................................................................. 9
3.4. Business Case #4: The Homeless Shelter Network ............................................................................ 9
4. MDM Approaches and Architecture ................................................................................................... 10
5. MDM Framework ................................................................................................................................ 13
5.1. Single Central Repository Architecture (SCRA) ........................................................................... 14
5.2. Central Hub and Spoke Architecture (CHSA) .............................................................................. 16
5.3. Virtual Integration (VI) ................................................................................................................ 17
5.3.1. Data Service Federation (DSF) ................................................................................................ 18
6. Data Synchronisation Techniques ....................................................................................................... 19
6.1. Trigger based ............................................................................................................................... 19
6.2. Message-based Data Synchronisation and Integration Framework (MDSIF) ............................. 20
6.3. Conflict resolution ....................................................................................................................... 21
6.3.1. Confidence Tables Approach .............................................................................................. 21
7. Case Study ........................................................................................................................................... 22
Problem statement ................................................................................................................................. 22
Proposed MDM solution ......................................................................................................................... 23
8. Conclusion ........................................................................................................................................... 24
9. References .......................................................................................................................................... 25

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1. Abstract
In this term paper the author first introduces the concepts of Master Data Management
(MDM), Master Data, Data Domain, Customer Data Integration (CDI), Product Data
Management (PDM) and One Master Data. Next a business case in support of MDM is
presented. In the business case studies various industry scenarios that would require or
benefit from a MDM initiative. The implementation of Master Data Management requires
business initiative and an IT initiative. The paper will therefore explain various
implementation architecture and management framework for MDM implementations that
are published in journals and books. The most important part of MDM is data
synchronisation techniques. The data synchronisation is required to maintain the
integrity of Master Data in a steady state scenario. The paper will explain data
synchronisation techniques that could be used. In the conclusion the paper will provide
a MDM implementation solution using a case study which will use the concepts
explained in the paper. The problem statement in the case study is derived from the
authors work experience. In order to complete the term paper multiple articles from
various management and technology journal and books were reviewed. These articles
are listed in the references table..
2. Introduction
The increasing amount of data is creating challenges to companies' data management
practices, causing data quality problems which are very common in today's companies.
Additionally today's technology allows storing more data than a company can manage
and different enterprise solutions often lead to further data confusion [8].

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Disparate systems create potential for data error; data errors are these inconsistencies
in data that cause data quality issues which could result in lost consumer cross selling
opportunities, invoicing problems, or even failed products. It is estimated that incorrect
data in retail industry lead to a loss of approximately $40 billion annually [9].
Master Data Management also called Reference Data Management, is an integrated
business and IT function that focuses on the management and interlinking of reference
or master data that is shared by different systems and used by different groups within
an organization [4].
Gartner defines Master Data Management as below.
“Master Data Management is a technology enabled business discipline that helps
organisation achieve a “single version of truth” in such important areas as customers,
product, accounts etc.
In MDM, the business and IT organisation work together to ensure the uniformity,
accuracy, semantic persistence, stewardship and accountability of enterprise’s official,
shared master data. Organisation apply MDM to eliminate the costly debates on “whose
data is right” which can lead to poor decision making and business performance” [6]
1. Master Data
Master data provides a foundation and a connecting function for business
Intelligence(BI) by the way in which it interacts and connects with transactional data

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from multiple business areas such as sales, service, order management, purchasing,
manufacturing, billing, accounts receivable, and accounts payable(AP) [1].
According to master data (also called reference data), is any information that is
considered to play a key role in the core operation of a business, typically shared by
multiple users and groups across an organization and stored on different systems [4].
Master Data is complementary to BI and can provide an excellent source of dimensional
data [11].
2. Data Domains
Master Data consists of information critical to a company’s operations. The data is
usually categorised master data entity such as customer, products, vendors, partners,
employees, inventory etc. These categories are called Data Domains [1 and 9]. The
concepts of Master Data Management apply to each of the domains in general. Each of
the domains has different implementations challenges.
3. Master Data Management
In an article on Enterprise Data Management (EDM), Cohen [5] describes MDM as one
of the main components of an effective enterprise data management (EDM) program.
There are six components in enterprise data management (EDM). Figure 1 describes
the components of enterprise data management (EDM) which when managed well
together help companies to take advantage of the latest technological innovations and
more effectively manage their information.

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Figure 1: Enterprise Data Management [5]
MDM is the process of helping a company to standardize the definition and attributes of
all of its critical data elements (customer, vendor, product, etc.) to create a common
point of reference enterprise wide. MDM can facilitate the sharing of data among all a
company's disparate business functions, departments and even divisions - not to
mention across all information systems, platforms and applications. Without an effective
enterprise wide MDM implementation the other components for EDM will not be as
effective. The business cases defined in the next section provide some examples to
support this statement.
A MDM solution therefore creates a single view of data in any targeted data domain.
This is also referred to as the golden record. For example, if the master data
management is for Customer Data then any record will refers to the “single truth” or
“single customer view” which is an authoritative customer record that has usually been
generated by extracting, cleansing the data from multiple channels of enterprise. This
process is called Customer Data Integration (CDI). CDI is the subset of MDM and

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encompasses every aspect of customer touch points in the organisation. CDI is the
most widely used implementation of MDM [1] while [8] mention that customer master
data is a common starting point for an organization’s MDM.. An effective CDI means
that any customer attribute is uniquely identifiable and there exists no multiple versions
of customer attribute in any of the company’s enterprise IT systems.
Product data management (PDM) systems are used to manage all product-related data
and also product master data. Product master data is far more complex than customer
master data [8].
3. Building a Business Case for MDM
In this section four Business Case scenario are provided. These business cases
present a problem statement the solution to which is implementation of MDM.
3.1. Business Case #1: Merger of two companies.
In U.S.A, a major telecom service Provider Company A bought telecom service provider
company B. The two major telecom service providers merged in 2005. Each of the
company individually provided mobile phone services to approximately 20 million
subscribers each – one used CDMA technology and other used GSM technology.
The challenges for the newly merged companies where multiple, the chief among them
being to consolidate their customer service department such that the outward projection
to the customer was one brand. This was in addition to normal integration related
problems like, HR, finance and regulatory etc.
The challenges resulting out of this merger that MDM could address are:

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a. How do we accomplish consolidation of all customer bases such that there is
single source of truth on all the customer attributes? This is CDI part of MDM.
b. Because the two companies had different price plan, devices, and products –
they need to be consolidated into one product reference. This is part of PDM or
MDM.
3.2. Business Case #2: Replacement of an ERP application
In the year 2008, a major crown corporation, managing social housing portfolio replaced
its legacy ERP system with a Commercial off the shelf (COTS) implementation. This
had a unintended impact on the downstream applications when the migration to new
ERP was completed. The downstream applications that used the original ERP’s unique
identifier (UiD) to cross reference were now out of sync with the corporate property
master data in the corporate ERP because the new application did not use the same
Unique Identifier (UiD). Additionally the new ERP did not integrate with the downstream
application. That is whenever a attribute is modified in the new ERP, that modification is
not communicated to the downstream applications. The new ERP being COTS product,
cannot be modified without incurring huge cost.
Thus the challenge here is to ensure to synchronise the data in the down steam
applications whenever data is the main ERP is modified. This is a classic case for MDM
implementation.

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3.3. Business Case #3: New application introduced
In year 2012 a new application was introduced in an organisation that manages building
repairs. This application was a web based application which was used to order jobs.
The application used the job costing information from the ERP system and
communicated back to the ERP system when the order was completed. This required
that the job costing information that is actually maintained in the corporate ERP is
shared with the new web based application. This is problem can be tackled using MDM.
3.4. Business Case #4: The Homeless Shelter Network
There are many homeless shelters in a big city. Big urban center could have upwards of
hundreds of such shelters. All of them are mostly funded either directly by provincial
government or a provincial government funding agency and/or individual city councils.
However each one of shelter house is a mostly independent not-for-profit organisation
or a charity run entity. Each one of the shelters would have their own distinct business
processes, and data collection methods with varying degree of sophistication [12].
Each shelter would be able to provide the number of clients it served in a particular time
period. However if the funding agency or the governments wants to know how many
unique homeless individual were served by the all the shelters funded by it, there is no
way of knowing it unless every shelter uniquely and uniformly identify the homeless
individual it serves i.e. if each one of them run same software application to manage
their shelter or at least use same identity proof. However, in practice not everyone uses
same software or same method of indentifying the homeless client.
MDM can be used in scenario like this to overcome data duplication problem.

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4. MDM Approaches and Architecture
Before proceeding with MDM architecture it is important to review the types of data and
tables in a modern database application. Enterprise systems deal with and generate
different types of data. These data are classified into data domains like, customer,
products, accounts, vendors etc. Additionally the data can be classified as transactional
data and non-transactional data. Transaction data are generally stored in transaction
tables. Examples of transaction data include call records of a subscriber (CDRs), or line
items in a purchase order or a bank transaction in ATM machine. Normally transaction
data tables have large number of records. The data in transaction tables is dynamic and
the tables are frequently updated with new rows. The data in the transaction table are
generally critical for regulatory reporting. However before the advent of virtual server
and cheap storage the transaction data used to be archived in tape drives or sometimes
simply deleted after certain time period. The transaction tables provide the point in time
information and therefore are at the heart of any Business Intelligence initiative.
Non-transaction data is also called reference data are stored in tables called reference
table. The reference table contain such information as customer unique identifier details
(name, address, account number etc), vendor details (vendor name, vendor number,
vendor address etc), and company employees, company address etc. This information
is critical to the organisation. The data in reference tables are used for referential
integrity in transaction table. Reference tables are normally never archived or deleted.
Another way of categorising data is operational and non-operational. Operational data is
the real-time collection of data in support of a company’s need in their daily activities.

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Nonoperational data is normally captured in a data warehouse on a less frequent basis
and used of business intelligence (BI) [1].
Accordingly this particular classification of data is used to divide MDM into two sections
Operational MDM and Analytical MDM [1, 3, 4, 8 and 13]. A third category is a
combination of operational and analytical MDM and is called enterprise MDM [1, 4].
Operational MDM integrate operational applications such as enterprise resource
planning (ERP), customer relationship management (CRM), and supply-chain
management (SCM) in upstream data flow [8]. Analytic MDM is seen in practices which
reminds data warehousing (DW) such as customer data integration and financial
performance management. The enterprise MDM system is used for maintain and
publishing all the organisation master data.
The architecture of enterprise MDM is shown in figure 2. The main components of MDM
system are MDM applications, a master data store, a metadata store and a set of
master data integration services [14]. This is shown in figure 3.
Figure 2: Enterprise MDM Architecture [3]

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Figure 3: MDM components [14]
Enterprise MDM is the most intrusive implementation, while analytical MDM is least
intrusive reason being enterprise MDM encompasses both operational and non-
operation data. As a result the gain is highest in enterprise MDM implementation.
Additionally while implementing MDM, it makes sense to break down the MDM initiative
into phases and target just a few applications at a time to avoid disruption.

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5. MDM Framework
It is important to understand how master data is created, used, maintained and
integrated with multiple applications. The MDM frameworks mentioned in this section
describes various ways to store, process and synchronise master data. The main
components of MDM are:
1. Composite applications
The applications are the IT applications which will collect, use and maintain
master data. An example of this application could be customer service
software used in a call-center, an ERP system, a downstream application, a
front end web application etc. Each composite application will have its own
database or two applications could share a database.
2. Business Process Orchestration
This is the most critical part of MDM initiative. Business Process
Orchestration is a set of rules, guidelines, workflow or regulations created by
the business owners and leaders such that the data being entered in the
applications are consistent, and accurate. An example of this role could be as
below. To eliminate discrepancies in name (Michael vs. Mike, Robert vs.
Robert) of the same person, a homeless shelter clerk would verify the name
of the client with his MCP card or any government issued valid ID. This is a
an example of a simple business process and correct implementation of this
is critical for success of MDM. A complex example of business process could
be a set of Microsoft SharePoint workflow steps that would be required by a

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clerk to be completed before an new vendor or a supplier is added to the SCP
application.
3. Enterprise Service Bus
This is the technology component of the MDM. This could be a complex
middleware products like Software AG’s Webmethods, IBM websphere or
Tuxedo. Or it could be a simple solution as a network share with xml reader
products.
4. MDM data synchronisation services
These are services that will synchronise master data between the
applications or between application and the master data store. These could
be triggered based service or could be message based service.
5.1. Single Central Repository Architecture (SCRA)
The Single Central Repository Architecture is shown in figure 4. In this architecture, the
master data is stored in a single central repository which will be updated by the MDM
services, and the applications. The applications will not hold a copy of any master data.
Applications refer to master data from the central repository. There are no local
versions of Master Data anywhere.

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Figure 4: Single Central Repository Architecture (SCRA) [1]
Advantages of SCRA are that it guarantees data consistency [1], and some of the
applications may become redundant one SCRA repository is up and running therefore
enabling to retire legacy applications.
However the disadvantage is the massive upfront cost. The upfront implementation and
migration to SCRA is costly because it requires massive data conversion effort and
migration of data from multiple disparate systems. This can also be disruptive to
business.
The prevalence of COTS products could possibly make implementation of SCRA
difficult if not impossible. However once SCRA is implemented, the cost of maintenance
would be minimal [1].

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5.2. Central Hub and Spoke Architecture (CHSA)
The central Hub and Spoke Architecture is a variation of SCRA [1]. It contains a central
repository (central hub) while also providing ability to the individual application to
maintain an extension of the data. Therefore some application would access master
data from the central hub and not keep a local copy, others might only use the central
hub as a reference [15].
Figure 5: Central Hub and Spoke Architecture (CHSA) [1]
The biggest advantage of CHSA is its flexibility to relatively decouple by supporting
spoke systems. This flexibility is really important when we have COTS applications
which cannot be coupled with the central hub [1]. The flaw of CHSA hub-and-spoke is

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that it doesn’t address issues of timeliness and latency [15]. Additionally the data
conversion effort is still required.
5.3. Virtual Integration (VI)
This pattern uses data virtualization to provide one or more on-demand integrated views
of master data entities such as customer, product, asset, employee etc. even though
the master data is fractured across multiple underlying systems. Applications,
processes, portals, reporting tools and data integration workflows needing master data
can acquire it on-demand via a web service interface or via a query interface such as
SQL [16].
Figure 6: The Virtual Master Data Management pattern

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5.3.1. Data Service Federation (DSF)
Data Service Federation is a common Virtual Integration architecture. The virtual
integration pattern aggregates data from multiple sources into a single view by
maintaining metadata definition for all the sources [1].
Figure 6: Data Service Federation (DSF) [1]
The advantages of DSF is less costly than the SCRA and CHSA because the data does
not have to be physically copied from one location to another nor any additional storage
space is required. However the biggest disadvantage is that the data improvements are
not propagated back to the source application [1].

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6. Data Synchronisation Techniques
The data synchronisation is the critical step to maintain the consistency of master data.
Synchronization step is mostly required regardless of what type of MDM framework is
implemented. In this paper three different types of data synchronisation techniques are
described. However it must be noted that there can multiple other ways of
synchronisation data and that database or data synchronisation is not unique to MDM.
6.1. Trigger based
Trigger based approach is described in the figure below. In this approach the trigger for
data synchronisation is an update or insert event on the source database table record.
In this step when a candidate record is modified in source database, a service polls the
event and propagates the modified data to other database tables.
Figure 8: Trigger based [13]
This kind of synchronisation ensures that all the data in multiple tables are always
synchronised. However while it is easy to implement in a small scale setting, the
process is extremely computation intensive in a large scale. It is also dependent on high
availability of networks.

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6.2. Message-based Data Synchronisation and Integration Framework
(MDSIF)
The message based data synchronisation and Integration Framework is detailed in the
article [13]. In this process message oriented middleware (MOM) like IBM’s MQ Series
is used to propagate the data from multiple data
Figure 7: Message-based Data Synchronisation and Integration Framework (MDSIF) [13]
MDSIF bring all the message based middleware’s advantage that is has an advantage
in that it does not have to depend on network availability. Additionally it does not add
load to the network thus avoiding performance bottleneck [13]. However these are
expensive piece of software and require lots of investments in infrastructure and high
maintenance cost.

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6.3. Conflict resolution
6.3.1. Confidence Tables Approach
When multiple data sources are involved there will be data conflicts. These conflicts are
different from database conflicts. Confidence table approach to resolve data conflicts
mentioned in [13] and is effective tool to manage data conflicts.
In this approach each data that is under consideration are given a confidence level
based on the source that has modified the data. This confidence is designated in the
business layer processes. When data synchronisation process finds data conflicts it
refers to the confidence table. The source that has higher confidence level will get
higher preference and the data with lower confidence level is rejected.
Figure 9: Confidence Tables Approach [13]
The method of resolving conflicts during synchronisation is dynamic and is easy to
maintain. However it needs upfront identification and constant maintenance. Additionally
input from business owners is critical in this approach.

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7. Case Study
In this section we will revisit a business case mentioned in the previous section and
apply MDM principles to achieve one Master Data. We will select case study on multiple
homeless shelters mentioned in section 3.4. The synopsis of the problem statement for
this case is mentioned below.
Problem statement
There are multiple homeless shelters that are funded by provincial government
agencies. Each of the shelters is independent entities which have their own business
processes, procedures and, software.
This situation implies that when a homeless client walks into a shelter, because there is
no uniform business processes and because the shelters do not share database
following issues exist:
1. A client may not be identified uniformly by all the shelters. That is shelter A might
register a person with only first name, while shelter B might register the same
person with last name and initials.
2. Suppose the funding agency wants to know how many homeless were served by
the shelters, there does not exist a single place which will hold this information.
Agency cannot track the fund usage, efficiency of usage and perform trend
analysis.

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Proposed MDM solution
Given the background of the problem statement, it is proposed that we will use Data
Service Federation architecture with message based data synchronisation. Additionally
we will use confidence table approach to resolve any conflicts.
Firstly business processes are implemented to ensure that each shelter records the
name correctly. The solution could be as simple as using same identification card to
correctly identify first name and last name and other identification information.
Additionally a workflow could be implemented such that when a new client is registered
a review process happens and the record is approved by a manager. This step will
eliminate any clerical error during data entry.
As discussed in previous section virtual integration framework uses web services and
metadata definition to uniquely record and integration MDM data between composite
applications. In our case the composite applications are the applications in each of the
shelter. Thus a MDM master repository is created in a centralised location and the view
made available to other composite applications.
To ensure data synchronisation with the master data repository we will implement
message based data synchronisation technique. This will eliminate network related
issues that can impede a trigger based approach.
Confidence tables are created to resolve data conflicts. In the confidence table will hold
the confidence level for each information record that is required to be tracked by the
funding agency. When a field is updated by multiple applications then the source with
the highest is given priority and that information is used to update in the repository.

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8. Conclusion
It can be concluded based on the findings in this paper that MDM cannot be classified
as only an IT problem but it is a managerial challenge which requires structural changes
to managing business processes, and managerial decision making. Without
engagement of the business owners MDM cannot succeed.
In the case study we found that the funding agency can now accurately track the
number clients that were served and also provide a bigger picture for policy makers on
the number of clients using the shelters.
Thus MDM improves overall data quality and confidence. With successful
implementation of MDM, a single source of truth exists regarding any master data that is
tracked – customer, products, suppliers etc. This will help businesses make proper
business decisions with the confidence that the data on which these decisions are
based is accurate.

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9. References
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Dalton, Allen, Mark. ISBNs: 9780470910559. 9781118085660. [Wiley Corporate
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2. Management of the master data lifecycle: a framework for analysis. Ofner,
Straub, Otto and Oesterle.
3. Practical Approach for Master Data Management, Chandra Sekhar Bhagi, World
of Computer Science and Information Technology Journal (WCSIT) ISSN: 2221-
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4. Enterprise Master Data Management Trends and Solutions. APOSTOL,
Constantin-Gelu, http://revistaie.ase.ro, Vol. XI, no. 3/2007
5. Understanding the Scope of Data Management: The Components of a Robust
Enterprise Program. Cohen, Rich.
http://www.information-management.com
6. Gartner Inc,.”Hyper Cycle for Master Data Management, 2010” Andrew White
and John Radcliff.
https://www.gartner.com/doc/1464920/hype-cycle-master-data-management
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Page: 49 – 84
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Jaaskelainen, Hanna Kropsu-Vehkapera, Harri Haapasalo. Industrial
Management & Data Systems, ISSN: 0263-5577, Volume 111 issue 1

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9. Methodologies for data quality assessment and improvement, Batini, C.,
Cappiello, C., Francalanci, C., Maurino, A. , ACM Computing Surveys, Vol. 41
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ottawas-math-on-skills-shortages/article17675622/
11. Introduction to Master Data Management. Mark Rittman,
www.rittmanmead.com
12. National Homelessness Information System
http://hifis.hrsdc.gc.ca/initiative/index-eng.shtml
13. Message-Based Approach to Master Data Synchronization among Autonomous
Information Systems, Dongjin Yu and Hangzhou Dianzi. International Journal of
Enterprise Information Systems, 6(3), 33-47, July-September 2010.
14. Using Master Data in Business Intelligence Colin White, BI Research available at
www.fm.sap.com and www.broadstreetdata.com
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http://www.information-
management.com/blogs/business_intelligence_bi_hub_and_spoke_architecture_
analytics10015083-1.html
16. Data Federation- Master Data Patterns - The Virtual MDM Pattern, Mike
Ferguson, available at http://www.b-eye-

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network.co.uk/blogs/ferguson/archives/2009/12/data_federation-
_master_data_p.php