science

Master data

Master data is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Master data rather than just read about it. In short: Master data represents "data about the business entities that provide context for business transactions". The most commonly found categories of master data are parties (individuals and organisations, and their roles, such as customers, suppliers, employees), products, financial structures (such as ledgers and cost centres) and locational concepts.

Key takeaways

Master data belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Master data to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Master data from memory before moving on to harder problems.

Reference excerpt

Master data represents "data about the business entities that provide context for business transactions". The most commonly found categories of master data are parties (individuals and organisations, and their roles, such as customers, suppliers, employees), products, financial structures (such as ledgers and cost centres) and locational concepts. Master data should be distinguished from reference data. While both provide context for business transactions, reference data is concerned with classification and categorisation, while master data is concerned with business entities. Master data is, by its nature, almost always non-transactional in nature. There exist edge cases where an organization may need to treat certain transactional processes and operations as "master data". This arises, for example, where information about master data entities, such as customers or products, is only contained within transactional data such as orders and receipts and is not housed separately. ISO 8000 is the international standard for data quality and data portability in master data.

Alternative definition An alternative definition of the term master data is that it represents the business objects that contain the most valuable, agreed upon information shared across an organization. In this sense, it gives context to business activities and transactions, answering questions like who, what, when and how as well as expanding the ability to make sense of these activities through categorizations, groupings and hierarchies. It can cover relatively static reference data, transactional, unstructured, analytical, hierarchical and metadata. What constitutes master data under this definition is therefore not about an essential quality of the data (e.g. it is a business entity that provides context for business transactions), but rather about the context in which the organisation has decided to treat the data.

Externally-defined master data For most organisations, most or all master data is defined and managed within that organisation. Some master data, however, may be externally defined and managed. This represents the single source of basic business data used across a marketplace, regardless of organisation or location. Thus, it can be used by multiple enterprises within a value chain, facilitating "integration of multiple data sources and literally [putting] everyone in the market on the same page." An example of market master data is the Universal Product Code (UPC) found on consumer products.

Master data management

Curating and managing master data is key to ensuring its quality and thus fitness for purpose. All aspects of an organisation, operational and analytical, are greatly dependent on the quality of an organization's master data. Master Data is therefore the focus of the information technology (IT) discipline of master data management (MDM). Without this discipline in place, organisations commonly encounter difficulties with having multiple versions of "the truth" about a business entity, both within individual applications, and distributed across applications.

References

Further reading Allen, Mark; Cervo, Dalton (2015), Data Quality Management: Multi-Domain Master Data Management (2015 ed.), Morgan Kaufmann, doi:10.1016/C2013-0-18938-6, ISBN 9780128011478 Talburt, John R.; Zhou, Yinle (2015), Entity Information Life Cycle for Big Data Master Data Management and Information Integration (2015 ed.), Elsevier, doi:10.1016/C2013-0-18748-X, ISBN 978-0-12-800537-8 Berson, Alex (2011). Master Data Management and Data Governance. McGraw-Hill Osborne Media. ISBN 978-0071744584. Loshin, David (2006), "Defining Master Data", BeyeNetwork. Retrieved 6 June 2020. Whei-Jen, Chen (2014). Master Data Management for SaaS Applications. IBM Redbooks. ISBN 978-0738440040. Effective Master Data Management

See also Authoritative Legal Entity Identifier Customer data integration Data governance Data quality ISO 8000 Master data management Product information management

Worked examples

Example 1 — a first encounter with Master data

Start with the simplest possible case. Write down what Master data claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Master data before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Master data ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Master data

In research: Master data appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Master data in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Master data is common in secondary-school and first-year university syllabi. It links to neighbouring topics Data management, so understanding it makes those chapters shorter.
In everyday life: Look for Master data outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Master data in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Master data means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Master data out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Master data in simple terms?

Why does Master data matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Master data?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Master data.