Master Data Management (MDM) is a comprehensive approach to ensuring the accuracy, consistency, and accountability of an organization's critical data entities, often referred to as "master data." This type of data typically includes key business entities such as customers, products, suppliers, and locations. MDM involves processes and technologies that help organizations define and manage this data across various systems, applications, and business units. For example, if a company has customer profiles in different CRM systems, MDM consolidates this information into a single, authoritative source, eliminating redundancies and ensuring all departments are referencing the same data.
Data governance complements MDM by establishing the policies, procedures, and standards to manage data assets effectively across the organization. It focuses on the overall management of data availability, usability, integrity, and security. Through data governance, organizations create a framework that delineates who can access what data, how it should be maintained, and the rules for its usage. For instance, a data governance strategy might specify that only certain roles can edit customer information, while others can only view it, ensuring that data integrity is maintained and that sensitive information is protected.
Together, MDM and data governance create a robust environment for managing data quality and consistency. While MDM deals specifically with the practices of collecting and standardizing master data, data governance ensures that there are clear rules and responsibilities around how that data is handled. For instance, in a retail company, MDM may standardize product dimensions and pricing across different databases, while data governance sets rules for who can update those details and how often. This synergy between MDM and data governance supports better decision-making, enhances operational efficiency, and promotes compliance with regulations like GDPR or HIPAA.