In conventional master data management (MDM) techniques, companies typically maintain their different types of master data separately across various systems.
While this method was widely used in the past, it created significant challenges for organizations when trying to get a unified view of their data.
Decision-makers often found it difficult to identify spend trends, and pinpoint cost-saving opportunities. The lack of integration between different data sources made it harder to draw insights from the data, which is critical for informed decision-making and strategic planning.
What is Multi-Domain Master Data?
While master data management is a process of keeping and maintaining the data accurate, consistent and complete, multi-domain master data management is taking a step further to integrate data sets of different domains in a centralized database.
This allows organizations to access all of their different types of data in one place. These data types are critical for the organization’s operations and must be maintained consistently across industries and business functions.
Different industries require the management of various data types. For instance, the food and beverage industry needs to maintain product master data, material master data, vendor master data, customer master data, and employee master data, among others.
Similarly, in the oil and gas industry, companies focus on geotechnical data, employee data, vendor data, material data, and equipment master data.
Regardless of the sector, transaction, vendor, customer, employee, and location master data are universally essential across all industries. There are several vendors offering master data management solutions, such as SAP Ariba for supplier master data management, SAP CX for customer data management, and various other platforms designed to streamline data maintenance for organizations.
However, maintaining each database separately creates a cumbersome process for companies, leading to challenges in achieving a unified view of their spending activities, difficulties in processing information, and ultimately complicates decision-making, making it a more time-consuming and challenging task.
Multi-Domain MDM typically consists of several core components that work together to deliver a unified data management solution. These components are designed to handle data across various business domains such as:
Customer Data Management (CDM)
Customer data is crucial for business operations. Multi-Domain MDM consolidates data across CRM, sales, and support systems, providing a 360-degree view for accurate, consistent, and up-to-date customer information across all touchpoints.
Multi-Domain MDM ensures accurate supplier data across procurement, finance, and logistics systems, helping organizations strengthen supplier relationships, streamline procurement, and ensure compliance.
Multi-Domain MDM ensures accurate, consistent employee data across HR, payroll, and business systems, optimizing workforce management, engagement, and compliance.
Geospatial and Location Data
Multi-Domain MDM integrates geospatial data across systems, ensuring accurate mapping of store locations, distribution centers, and warehouses, supporting better route planning, logistics, and expansion.
Financial and Accounting Data
Multi-Domain MDM enhances financial data by integrating ERP, accounting, and billing systems, providing a consistent view of financial health. This improves reporting, compliance, auditing, and decision-making.
The Shift Towards Multi-Domain Master Data
Recognizing these challenges, vendors began offering Multi-Domain Master Data Management (MDM) solutions to help organizations streamline their data management processes. These solutions aim to simplify not just master data management, but also broader global operations such as supply chain management, inventory management, and data analytics.
Multi-Domain MDM tools integrate various domains into one platform, making it easier for organizations to manage data across different departments, geographies, and functions.
While many vendors claim to offer multi-domain solutions, there is often a distinction between multi-domain data management and multiple domain management. The former refers to an integrated approach where data from multiple domains is managed in a unified system, whereas the latter involves managing each domain in separate applications.
Building Blocks of Multi-Domain MDM
The Multi-Domain MDM model typically integrates three core layers of data: reference data, transaction structure data, and enterprise structure data.
Reference Data: This includes standardized values, such as country codes, currency codes, product categories, and customer types, that ensure consistency and accuracy across all systems and applications within the organization.
Transaction Structure Data: This refers to the data that defines how transactions are recorded, including order IDs, invoice numbers, payment status, and related metadata. Structuring this data properly ensures that transactions are processed in a consistent and traceable manner across the business.
Enterprise Structure Data: This includes organizational information such as company codes, business units, departments, cost centers, and geographic locations. It helps define how business operations are structured and supports efficient data management across various departments and geographies.
The implementation of Multi-Domain MDM is not only a technological challenge but also an organizational strategy. Technology needs to address key tasks such as Entity Resolution (ER) and Entity Identity Information Management (EIIM). The Entity Resolution process ensures that when systems refer to one or more entities, the system can prioritize and select the most accurate information. Entity Identity Information Management involves maintaining the integrity of the entity’s identity over time, a basic requirement for any MDM system.
In addition to managing customer data, which is crucial for most organizations, businesses that deal with large volumes of data across multiple partners, suppliers, and agents must deploy Multi-Domain MDM solutions to handle the complexity of their data.
By coordinating data across multiple business units at different levels and geographies, Multi-Domain MDM helps organizations ensure data accuracy and consistency, facilitating better decision-making and operational efficiency.
The Benefits of Multi-Domain MDM
Single Source of Truth: One of the primary benefits of Multi-Domain MDM is the ability to create a single source of truth (SSOT) for all data across the organization. By integrating data from various domains into one platform, companies can avoid inconsistencies and duplication, leading to better data quality and more informed decision-making.
Improved Data Governance: Multi-Domain MDM enforces governance rules that ensure the accuracy, consistency, and compliance of data. This is critical in today’s data-driven environment where businesses must adhere to various regulatory standards (such as GDPR, HIPAA, etc.). By centralizing data and applying governance policies, organizations reduce the risk of data breaches, errors, and inconsistencies.
Enhanced Operational Efficiency: Multi-Domain MDM eliminates manual processes that arise from siloed data management. For example, having customer data scattered across different systems can lead to duplicate records, inconsistent customer profiles, and inefficiencies in sales, marketing, and service operations. By centralizing customer data and other business-critical information, MDM streamlines operations, increases productivity, and reduces operational costs.
Better Decision-Making: With unified data at their fingertips, decision-makers have access to a complete view of the business. This leads to better forecasting, trend analysis, and performance tracking, ultimately driving business growth. Multi-Domain MDM provides real-time, accurate data that is crucial for strategic decisions, from financial planning to customer experience optimization.
Cross-Department Collaboration: Since Multi-Domain MDM integrates data from various business functions, it enhances cross-department collaboration. Teams can work from the same data sets, ensuring alignment across departments such as sales, marketing, finance, HR, and operations. This cohesion helps organizations operate more efficiently and align their efforts toward common goals.
Scalability and Flexibility: As businesses grow and expand into new markets, regions, or industries, Multi-Domain MDM provides the flexibility to scale. Organizations can add new domains, integrate additional data sources, and adapt their systems to changing business requirements without disrupting existing processes.
Multi-Domain MDM Model
The architecture of Multi-Domain MDM is designed to integrate, manage, and distribute data across various domains and systems. It typically consists of several layers and components:
Data Integration Layer: This layer is responsible for connecting different data sources, including enterprise applications (ERP, CRM, HR systems), databases, and external data sources. It ensures seamless data flow from source systems into the MDM platform.
Data Quality and Governance Layer: This layer ensures that data quality standards and governance policies are applied consistently across all domains. It handles data validation, cleansing, deduplication, and enrichment processes to maintain high-quality, consistent data.
Master Data Repository: The core component of any MDM system is the master data repository, which stores the authoritative version of the data. It centralizes all master data entities and allows for data versioning, tracking changes, and updating records in real time.
Entity Resolution: Entity resolution is a crucial process in Multi-Domain MDM that identifies and merges duplicate records across systems, ensuring a single, accurate entity profile (e.g., a single customer, vendor, or employee record). This process helps avoid inconsistencies and ensures that organizations work with the most up-to-date and accurate data.
Data Distribution Layer: This layer enables the distribution of master data to other systems within the organization, ensuring that business applications always access the most accurate and consistent version of the data. It may include APIs, data connectors, or integration tools for seamless communication between systems.
Reporting and Analytics Layer: Multi-Domain MDM often integrates with analytics tools to enable real-time reporting, dashboards, and business intelligence. This layer helps organizations derive insights from their master data, supporting decision-making processes.
Conclusion
In conclusion, Multi-Domain Master Data Management provides organizations with a unified, efficient way to manage diverse data sets across multiple business domains. By consolidating data into a single platform, organizations can gain better insights, improve data quality, and enhance decision-making across all business functions. Multi-Domain MDM simplifies data governance, reduces costs, and accelerates business operations, ultimately benefiting companies with streamlined processes, improved data accuracy, and a clear, consistent data framework.
Organizations implementing a Multi-Domain MDM system can expect a significant improvement in their ability to leverage data for growth, innovation, and competitive advantage, all while maintaining a strong governance framework that ensures data integrity and consistency.
