Master Data Modelling: What Is It & Why Does It Matter for Business?

Try PIM Cost Calculator

By: Sagar Sharma

Master Data Modelling: What Is It & Why Does It Matter for Enterprises?

Data becomes vital for businesses. The dependency on data for enterprises keeps on rising as the business processes and business decisions on being taken based on the data. So, managing such data in a highly secure way becomes inevitable for businesses. This is where master data modelling and master data management come to play.

This article provides you with a holistic view of how master data modelling and MDM system benefits your business.

What is Master Data Modelling?

Master Data Management (MDM) is a familiar aspect to all. But what is Master Data Modelling? Many might not be aware of this.

Master data modelling is nothing but just an information model that is used to portray the business concept and dependency. Also, the data model helps point out how business entities interact with each other. In simple words, a master data model is to serve the business interest and assists businesses to achieve its goal and objective in a short time.

Why Master Data Modelling is Important?

Here are a few aspects that give you a holistic view of why master data modelling is considered an important thing for modern businesses.

  • The master data model acts as a component that helps businesses to solve many problems related to data quality.
  • The data model gathers multiple data which are related to the same logical object from multiple systems together. This helps businesses to make difficult decisions easily and quickly.
  • Master data modelling relies more on real-time data consolidation which allows businesses to predict the complex rules and difficulties in implementing data models.

Essential Technological Assistance Needed for Master Data Modelling

After knowing what is master data modelling? you have a curiosity of knowing what kind of assistance you need in terms of technology for master data modelling.

If you are looking to have an effective master data modelling for your business, then make sure you have the upcoming tech stacks. Master data models are living documents that are supposed to evolve according to market conditions and business needs.

Moreover, the master data models need to be shared between vendors, partners, and other business entities for better business workflow.

Ideally, master data models play a crucial role in providing essential support to the business process, planning IT architecture, and also creating an effective business strategy. Your business tech stack should support a data model to perform all these operations seamlessly.

Here are the vital 3 technology solutions which are essential for businesses to perform master data modelling.

1. Master Data Modelling Hub

Master data modelling hub is nothing but a simple computing device that comes with an API for seamless integrations with multiple systems. The computing device, the master data model hub performs various operations like machine learning, aggregates, sharing/transmitting data, displaying routes, and so.

Here are the 3 types of master data modelling hubs you need to know.

Persistent Hub

It is a device that collects crucial and critical business data from various source systems and stores them in a hub.

Registry Hub

It is a device carry out the identification process of spotting information and key records and copies them into a registry.

Hybrid Hub

It is a device that performs the same operations as a persistent and registry hub. However, it combines the elements & filters and by using those, it allows administrators to gain fine control over the data hub.

2. Data Integrations/Middleware

For better data management and to leverage the full benefits of high data quality, the presence of scattered data across multiple systems needs to be synchronized. Also, with such synchronization data quality can be improved significantly by eliminating data duplicity.

The stack structure of a typical master data modelling comes with various interfacing and workflow-type techniques that ensure seamless data synchronization.

3. Data Quality Tool

Data quality tools are one of the essentials that every enterprise shouldn’t ignore. As data becomes the prime weapon for businesses to beat the competition and to succeed in the market, owning data quality tools becomes mandatory.

Here are the lists of categories where data quality tools fall, pick the one based on the category for your organization and leverage its benefits.

  • Data Auditing
  • Data Parsing/Standardisation
  • Data Cleansing
  • Data hybrid

Master Data Management in Data Modelling

Master Data Management (MDM) is a set of essential information management techniques that utilizes technology and processes to manage the lifespan of important data pieces and the documentation that goes with them for an organization’s main financial and operational systems.

MDM works to ensure that every component of a company’s master data is correct, standardized, and consistent. It is a crucial IT procedure that seeks to improve the consistency and caliber of critical data assets.

By lowering the administrative expenses incurred by faulty or incomplete data entry, inaccurate records, and inaccurate reports, a well-executed MDM strategy contributes to an improvement in company efficiency.

A strong MDM deployment may help businesses in several ways. The upcoming section dives deep into this established practice involving various business processes, particularly on master data modelling boosted through effective master data management strategy.

What is a Master Data Management Strategy?

With the use of MDM techniques, businesses may unify all data pieces inside an organization under a single master record, independent of their ownership or point of origin. Enabling organized data access across many systems facilitates clients to receive the same data where they choose to source their information, lowering costs and streamlining processes.

To make it simple to exchange and communicate information with other systems, MDM aims to guarantee that all processes are compatible with one another. Every firm needs master data management because it enables them to better manage their business operations and increase productivity by utilizing reusable data parts.

It is just a process of managing data in a consistent and coordinated way across the entire enterprise. The Master Data Management strategy is to create one single point of truth for all enterprise data that can be easily accessed by all departments. The department that needs access to the data will be given permission and will have access to the data for as long as they need it.

Why is a Master Data Management Strategy Necessary?

The benefits of MDM to an organization include improved IT governance through effective information management and a reduction of costs associated with maintaining key data. Businesses spend $2 billion annually on duplicate business processes, mainly in customer relationship management and ERP systems.

Moreover, 29 percent of small businesses miss out on revenue opportunities due to inaccurate information. MDM can be useful in this situation. Any organization’s data management strategy is built on the MDM strategy plan.

A collection of business procedures known as MDM (Master Data Management) makes sure that all data related to an entity is maintained uniformly, effectively, and in line with the organization’s expectations.

Additionally, it guarantees that almost all data is recorded, saved, accessed, and kept safely. The MDM strategy needs to be in line with your company’s objectives. You may accomplish these objectives with the aid of a solid MDM strategy by:

  • Providing accurate master data over different channels (like vendors and customers)
  • Improving customer experience through faster access to data-rich content.
  • Minimizing costs by automating repetitive tasks (such as cleansing duplicate records)

Phases Involved in Master Data Management Strategy

The benefits of MDM to an organization include improved IT governance through effective information management, as well as a reduction of costs associated with maintaining key data. Businesses spend $2 billion annually on duplicate business processes, mainly in customer relationship management and ERP systems.

Moreover, 29 percent of small businesses miss out on revenue opportunities due to inaccurate data. This is where MDM comes into play. The MDM strategy plan is the foundation for any organization’s data management strategy.

Master Data Management strategy is the process of collecting and organizing data that is used by multiple departments in an organization. It’s a cross-functional, cross-departmental effort that spans the entire life cycle of data from its creation to its use. The key phrases in the Master Data Management strategy are:


The first step in the master data management strategy process is to plan for the project. This includes determining what information needs to be collected, how it will be collected, and who will be responsible for collecting it.

Project management

Once the planning phase has been completed, project management can start. This involves managing the project timeline and making sure that all deadlines are met.

Data collection

The next step in a master data management strategy is to collect all of the necessary data from various sources within an organization.

Quality assurance

The quality assurance stage checks whether or not all of the collected data meets certain criteria, such as accuracy and completeness.

Data integration

The last stage of a Master Data Management Strategy process is integrating collected data into its respective databases or systems where it can be stored and accessed more efficiently.

Who Should be Involved in The Master Data Management Strategy?

Master Data Management Strategy is a complex process that requires a lot of expertise from different departments. It is crucial for the success of a Master Data Management Strategy that all the stakeholders are involved in its planning and implementation process.

This will ensure that the strategy will be implemented successfully and provide more accurate results. The Master Data Management Strategy process should be initiated by the stakeholders themselves.

They should start with a brainstorming and evaluation process, which includes all the key stakeholder groups. All of their ideas need to be considered during this phase. After evaluating the input, they will then create a plan that has a list of objectives and details what resources are needed to complete it successfully.

They should also include how they will measure success in completing all the tasks outlined in the plan.

Information Technology (IT)

Naturally, the IT division comes first. Given that they are in charge of monitoring and maintaining the system, they must play a significant role in the formulation and management of any MDM solution.

Business Users

The business users are the next to follow. They will be the ones utilizing the platform regularly; thus, their feedback must be taken into account while designing it. They should also be involved in testing and training to ensure that they are comfortable using it.

Data Managers

The data managers should be responsible for data governance and security, while network admins should take care of the infrastructure and IT operations. Different departments have different needs and responsibilities when it comes to data management.

The risk of not involving them in the planning process is that they may end up feeling like they don’t have any ownership over the project and will not be committed to it.

Project Management Team

Finally, the project management team is responsible for planning, budgeting, and executing the MDM strategy. The IT department is responsible for implementing the system. The data managers are responsible for managing and storing the data.

And finally, network admins are responsible for providing connectivity between different departments and techniques to make sure that information can be shared with everyone who needs it.

MDM is a useful technique for contemporary enterprises. A variety of MDM techniques may be implemented inside a company; however, each can be chosen depending on the unique demands and requirements of the business.

However, with all such effective MDM strategies still, enterprises may face challenges in master data modelling. Let’s see those challenges in brief.

Challenges of Master Data Modelling

The process of Master data modelling is not easy to process to do. Though you up-skill yourself to handle data models efficiently, you are supposed to face a lot of challenges. Here are the lists of a few common challenges you may face during the master data modelling process.


As mentioned earlier, it is not easy for enterprises or organizations to do data modelling on their own. It is a complex process that leads to experiencing data quality issues while dealing with master data.

Particularly, when enterprises deal with a large volume of customer data, multiple product-related SKUs, details of customer location from legacy systems, and so.


Defining primary master data, secondary master data, and slaves for master data is vital for efficient master data modelling.

Organizations and enterprises which fail to provide proper information regarding primary, secondary, and slaves of master data often struggle with the data mastering model. Due to this master data integration process becomes more complicated.


Defining data quality standards becomes an issue for an organization or enterprise when are stores data or domain values across multiple systems. To avoid this complexity, it is highly advised to store data in a centralized and structured manner, particularly product data.

Data Governance

Having an unstructured data storage process will create more trouble in data governance. Such poor data governance on master data will create more chaos in entire organizational operations.

Data Overlap

Storing a large volume of data like customer information across multiple systems of an organization will create a risk of getting data overlapping. Such a high degree of overlap in master data will significantly delay the business operation and also deliver inaccurate results due to data duplication.

How to Enhance Your Master Data Modelling?

If you are looking to enhance your master data modelling process, well this section would be the right spot. Here are some excellent resources by using which you can improve your data modelling process.

Up-skilling By Learning Via Online Portals

If you are about to handle the data modelling process, then you need to master certain skills.

Up-skilling yourself for better handling various applications like Data Quality Pro Virtual Summit, Data management channel, TDWI MDM portal, and so on is essential. There are so many online portals available, where you can easily up-skill your ability.

Expert’s Help Via Online Communities/Forums

In today’s virtual world, you can find so many online communities and forums on social media platforms like LinkedIn, Facebook, and so. By using those platforms efficiently, you can easily improve your master data modelling journey through the assistance of various experts around the world via the community.

Seeking Assistance from Master Data Modelling/Management Books

Though we are in the digital era, still we can get enough assistance via reading books. For effective master data modelling, you can find numerous books which possess in-depth information about data management and data modelling.

Moreover, seeking information via books will allow you to learn and improve your skills by yourself without anyone’s help.


Master data modelling is vital thing for every organization and business. Having an efficient master data model will represent the business core concept/aim/objective and entities.

Moreover, having a well-organized master data model will define how a brand interacts with its consumers. With a good master data management strategy, handling the master data model will be much easier and more efficient.

PIM Cost Calculator

Wondering about the investment involved in implementing a PIM solution? Get an estimate to plan your budget effectively with our PIM Cost Calculator.