Introduction

All businesses, no matter what their size, rely on data to record and analyse business activity. It is the lifeblood of any business operation. Data enters the enterprise during specific process activities, either through the keyboard, via electronic messages or via electronic files. It then flows throughout the enterprise to support every process activity from registering new customers and sales order taking to supplier procurement, product fulfillment, product delivery, invoicing and payment collection. Yet, when you boil down the complexity of business operations and look at data underpinning it in simple terms, there are two broad categories of structured data that any business relies on. These are:

• Master data
• Transaction data

Master data is simply the data associated with core business entities such as customer, employee, supplier, product, partner, asset, etc. This data can reside in many different systems. For example, customer data may reside in a sales force automation system, an e-commerce system, a marketing system, a billing system and a distribution system. Equally, product data may reside in product development systems, manufacturing systems, planning systems and storage systems. A trait of master data, therefore, is that subsets of it are needed in multiple systems to control continuity of business operations as processes progress throughout the enterprise.

Transaction data, on the other hand, is very simple and straight forward. This is the recording of business transactions such as orders in manufacturing, mortgage, loan and credit card payments in banking, and premium payments and claims in insurance. In retail, transaction data is product sales, either at point-of-sale terminals in stores or online. In aviation it is airline ticket sales.

Looking at corporate data in this context makes it look very straightforward. Both types of data together describe everything associated with core business activity. For example, Mr David Jameson (Customer) paid £0.89 on 21st January 2008 (the transaction) for a loaf of bread (Product) in the Oxford Street store (Store) in central London (Location). Here the combination of master and transaction data describes the business activity precisely.

Having understood the simple way in which master and transaction data record business activity, this paper focuses on the former of these, namely master data. More specifically, we will look at what it is, why it is needed, how to get started in managing it, and methodologies for implementing master data management. Master data management forms part of an overall enterprise governance program that aims to establish trusted data throughout the enterprise.