DATA MANAGEMENT

Reference master data is master data which is used across the organisation by various departments. The data itself is reference data also known as code tables or look-up data. Examples of reference master data such as within a bank with multiple branches across the country may include currencies, branch locations, geographic divisions, region names etc. As you can see from the examples, some reference data may actually be used to build a hierarchy of reference master data such as countries, regions, cities, city areas, branch locations. From a database perspective, there will be 10s or 100s of reference master data tables which are usually smaller in size compared to others within the same database. A reference table would mainly consist of two key attributes/data items:

Code: This is like a unique key to identify each reference master data item. It varies between reference master data hubs and therefore may be purely numeric such as 1, 2, 3 etc or it may be alphanumeric such as LON1, LON2, LON3 etc where the charters could have a meaning such as ‘LON’ referring to ‘London’ and the number to which London-based branch.

Description: The value of the data item such as London branch, Birmingham branch etc. In the above example of LON1, LON2, LON3 etc it may be names of London branches such as LON1 = London Monument, London Bank, London Victoria etc.

Reference master data is generic in its nature i.e. it can be used by various types of systems within the organisation including master data repositories such as customer, product, supplier master data etc. Given its wide use across the organisation it is vital that the reference master data is kept accurate and complete.

Managing the reference data within an organisation effectively will offer the following key benefits:

• Operational efficiencies
• Cost savings
• Improved customer service and retention
• Better view and enforcement of data standards

Reference master data may be managed by organisations manually. For instance, when a new branch is to be added to an organisation’s network the branch details need to be added across multiple systems such as CRM, data warehouse, reports, operational systems, website, published company brochures etc. Without going into the details of the business process, in summary multiple employees working on these systems and responsible for the accuracy of the data held within it will be involved and will communicate information through various channels including phone, e-mail and/or face-to-face meetings. The relevant data elements required by each person and system is entered manually and very often this introduces data input issues. For example, one person may enter LON22 as the new branch number in the data warehouse whereas another person responsible for the CRM system may enter LON0022. Due to a small, simple error the two records would not match and therefore would later on lead to further problems in the future until the issue is discovered and raised by a person impacted by the accuracy of data. For example, when it comes to reporting sales levels from within the data warehouse the sales figures at the end of the month may not show an accurate reflection because the operational system records sales using the branch code LON22 whereas the data warehouse equivalent is actually LON0022. Hopefully, the issue will be discovered and rectified if not it could create the perception that a branch is not generating enough revenue and therefore may lead to redundancies and maybe closure of the branch resulting in a loss on the balance sheet. Similarly, if the organisation is regulated by some regulatory requirements then this could result is hefty fines and damage the organisation’s reputation in the market.

So to manage the reference master data, organisations should use reference master data management tools. These may either be available within a MDM tool, although some vendors may provide specific tools just to manage reference master data. Whichever option is purchased from a vendor, you have to ensure that the tool offers at least some of the following capabilities:

• Central storage of the reference master data in order to allow enterprise-wide access to the data through a single and central point via the tool.
• Synchronisation and distribution of reference data updates including additions across all systems storing or referencing the reference master data.
• Workflows to help standardise and manage the process of data updates/additions and monitor the status i.e. who is the next person to do something with the data.

Auditing and history to enable tracking and recording of changes made to the reference data over a period of time, who made the changes, when were the changes made and why etc. Audit trails and maintaining history of data changes is particularly important to meet regulatory requirements such as Solvency 2.
Allow assignment of data stewards responsible for managing certain reference data domains. Similarly, the tool show allow to assign access controls to each reference data domain to control who can and cannot make changes or read the data.

Creating and managing hierarchies of reference data in order to support and represent the organisation’s business structure. Hierarchy management can be quite simple, but may also be extremely complex. So ensure that the hierarchy management features meets you present as well as foreseeable future requirements.

Integration with all the existing systems which need to source reference master data from this data hub.
Easy to use so that you do not have to spend a lot of time and money training up the users.

By implementing a suitable reference master data solution organisations can become more operationally efficient by means of automation and communicating through a single channel ( i.e. the reference master data tool).

Costs are also reduced, because when exchanging information about any data updates/additions these would be provided by one person and then another person responsible for putting the data in the system – the cost is therefore born by two people. The reference master data management solution would allow the “data provider” to immediately enter the details into the system hence a cost saving of one person and also limited room of misspelling or miscommunication any information about the data. Multiple people would be involved in the process when updating or adding a data element because multiple people who difference information about the reference data and require different information for their relevant system. Thus the reference master data system would provide a single, complete and consistent view about the data in question compared to previously fragmented pieces of information about the data communicated over phone, e-mail etc.

Customer service and retention is also improved, because incorrect reference master data for a customer-related data element is likely to be more accurate and correct. A critical mistake in the information could cause the customer frustration about the mistake by the organisation and therefore a less happy customer. In the worst case if the data error affects thousands of customers then the retention rates could decrease almost immediately causing further damage to an organisation’s revenue and position in the market.

Furthermore, if an organisation has a data governance council which oversees data standards they can easily monitor if data standards are correctly followed and make any corrections immediately through a clear view of all reference master data via the tool. Some of the workload can perhaps be reduced by implementing data validation rules within the reference master data tool.

Overall, when starting any kind of MDM implementation can be a very good point to start with. This is for several reasons and maybe should perhaps be another discussion, but in brief implementing a reference master data solution would be quicker and easier to implement. It can therefore also be used as a starting point of MDM to demonstrate a quick ROI in mostly 6 – 12 months depending on business complexity, data sources, reference master data you wish to manage.