“Master data objects are those core business objects used in the different applications across the organization, along with their associated metadata, attributes, definitions, roles, connections, and taxonomies.”
“Common examples of master data include customers, employees, vendors, suppliers, parts, products, locations, contact mechanisms, profiles, accounting items, contracts, and policies.”
“Master Data Management (MDM) incorporates business applications, information management methods, and data management tools to implement the policies, procedures, and infrastructures that support the capture, integration, and subsequent shared use of accurate, timely, consistent, and complete master data.”
Let’s simplify things for the purposes of discussion
First, let’s simplify the definitions in order to differentiate master and transaction data:
Master data is an abstract description of real-world entities. Transaction data is an abstract description of real-world interactions involving two or more of these entities.
Now, let’s use a simple (and fictional) example of MDM as we know it today:
Michelle Davis purchases a life insurance policy from Vitality Insurance.
In this example, Michelle Davis (customer), the life insurance policy (product), and Vitality Insurance (vendor) are all master data objects, and the premium payments that Michelle Davis sends to Vitality Insurance exemplify the transaction data involved.
Currently, both master and transaction data management is focused entirely on the perspective of Vitality Insurance, which for the most part, does make sense.
Both the vendor and product master data objects used in this example are owned by Vitality Insurance since they are the vendor and they make the product being sold.
Vitality Insurance also owns the transaction data because that is how the company makes money—especially if Michelle Davis lives a relatively long life.
However, Vitality Insurance doesn’t own the other master data object in this example, namely their customer Michelle Davis.
But they would claim (no pun intended) to own the master data that describes her.
It is this particular aspect I will focus on in this discussion about the future of MDM.
I believe this aspect is not only the most significant challenge facing MDM today, but also the fundamental flaw that the future of MDM must resolve.
How many (copies of your) customers do you have?
It can be easily argued that achieving a single view of your customers is one of the fundamental goals of a MDM implementation.
A single customer view allows your organization to understand how many customers you actually have and what the most “accurate, timely, consistent, and complete” data you actually have available to describe those customers.
However, attempting to achieve this goal is fraught with complexities.
The larger your organization and the longer it has been in business, the greater the likelihood you have many disparate systems for storing and managing master data.
Therefore, your organization probably suffers from inconsistent (or a total lack of) standards and ownership for all of your master data objects—and not just customer.
The reality that so many (and potentially conflicting) customer definitions as well as so many (and potentially redundant) copies of customer master data exist throughout the enterprise is what makes MDM such a daunting challenge.
Achieving a single customer view is the holy grail of today’s MDM and is often referred to as creating the “golden copy” of each unique customer.
But even the “Golden Copy” is still just a copy
All data (master and transaction) is an abstraction. Creating golden copies is an attempt to perfect the abstraction, which remains disconnected from reality.
Even the best maintained golden copies still suffer from the digital distance that exists between these internal abstract descriptions and the external real-world entities that they are attempting to describe.
Nothing can change the fact that the text string “Michelle Davis” is only an abstract description of the human being whose name is currently Michelle Davis.
Even if near real-time updates modify the text string as “Michelle Davis-Donovan” after Michelle Davis marries Michael Donovan in a beautiful seaside wedding, the same digital distance remains as a fundamental flaw in our current MDM world-view.
The inconvenient truth is this real-world event was not simply a partial concatenation of two text strings swimming in a beautifully maintained digital sea of information within the world-class MDM system of Vitality Insurance.
Attack of the (Digital) Clones
Let’s switch the perspective of this discussion—to your perspective.
No, I don’t mean your perspective either as someone working on a MDM solution for your organization, or as someone working for a vendor selling MDM solutions.
I mean your own individual and personal perspective.
How many companies currently view you as a customer? How many companies have previously viewed you as a customer at one or more times in the past?
How many copies of your personal information (i.e., your master data) do you think exist within the databases and file systems of all of the companies that you have ever done business with in your entire life?
Don’t forget to count all of the companies that obtained your personal information indirectly from the companies that you directly provided your personal information.
(In our example, imagine all of the third party companies Vitality Insurance sends Michelle Davis’ personal information in order to assess her insurance risk.)
I refer to all of these copies of your master data as your digital clones.
Now imagine how many of your digital clones still look like you. In other words, how many have your current postal addresses? E-mail addresses? Telephone numbers?
How many of your digital clones have all of your relevant personal information?
How many of them don’t know how old you are? How many of them don’t know how many times you have been married or how many children you currently have?
Would you even recognize all of your digital clones if you saw them today?
Now imagine you are a customer of Vitality Insurance. They have implemented a world-class MDM system. Therefore, they are maintaining an accurate, timely, consistent, and complete golden copy of your customer master data.
Great—now what about all of the other companies you do business with?
This is the fundamental flaw of MDM today—the current focus is entirely on companies (e.g, Vitality Insurance) and not on individuals (e.g., Michelle Davis).
Why is your personal information being managed by anyone other than who owns it?
The Personal Data Locker
In his excellent book Pull: The Power of the Semantic Web to Transform Your Business, David Siegel discusses the concept of the personal data locker, which will be your secure online account that stores all of your personal information, where it will be managed by who truly owns it—you.
You will grant permission to access the relevant aspects of your personal information to the vendors and other service providers with which you conduct business.
You will view all the transaction data connected to your master data—or requesting your verification to connect. For those familiar with online banking, imagine something similar to (but more advanced than) how e-bills work in online bill pay.
You will run your own personal MDM system. You will maintain the accurate, timely, consistent, and complete single view of your master data.
There will be no copies (golden or otherwise) of your personal information.
All of your digital clones will be deleted.
The Semantic Future of MDM
The semantic web is a disruptive paradigm shift, which will impact more than just the future of MDM.
However, the semantic web is still in its nascent phase. Although it is rapidly evolving, it will take more time not only before everything necessary is in place, but also for the defenders of the status quo to stop trying to fight the future.
The semantic web is also about much more than just simply cloud computing and software as a service (SaaS), both of which generate a lot of industry buzz today.
There are even some vendors already beginning to offer new MDM “solutions” where master data moves into the cloud. However, these apparent early adopters are still missing the fundamental flaw underlying MDM today.
It is not simply that master data needs to move into the cloud.
The most important aspect of the future of MDM is transitioning the management of master data to the real-world entities that actually own the data, thereby virtually eliminating both the abstraction and the digital distance undermining MDM today.
When this transition finally happens, organizations will be able to focus on managing the data they truly own—transaction data and only the master data that describes the organization and the core business objects it actually owns (e.g., its products).
In the semantic future of MDM, organizations will stop wasting time and money attempting to manage data they do not own.