Master data management (MDM) is software that works out which records in different systems describe the same customer, product or supplier, and builds one agreed version of each, called the golden record. Master data means these core records that many systems share. It is different from transactions, such as individual orders.
Why do records split? Each system collects details for its own job. Consider a mobile phone retailer with 150 stores across West Bengal, run from Kolkata. Its billing system lists a customer as "Ananya Ghosh", with a mobile number. Its online shop lists "ANANYA GHOSH", with an email address and a delivery address in Salt Lake. Its service centre knows only "A. Ghosh" and the same mobile number. Its customer relationship management (CRM) system has her twice: once from the online shop, and once from a Durga Puja offer form. So the marketing team sends her four messages about one offer. And the service centre cannot see that she bought the phone it is repairing.
MDM fixes this in three steps. First, it collects the records from each system, after data quality software has put names, phone numbers and addresses into a standard form. Second, it matches them. It compares fields using rules and scores, for example: the same mobile number, a similar name and the same PIN code. Pairs with a high score are merged automatically. Pairs with a middling score go to an employee in the data team, who decides. Third, it builds the golden record. For each field, a survivorship rule picks the best value, for example the most recently verified address, or the email address from the online shop. In this case, MDM links five records to one customer ID.
The golden record is then sent back to the systems that need it, or they look it up when they need it. From then on, the billing system, the CRM and the ERP all use the same customer ID.
The same work applies to products and suppliers. A factory may hold one bearing under four part numbers, all bought from one supplier. MDM shows that they are one part, so the purchase team can order it in bulk. A product information management (PIM) system holds the detailed descriptions used to sell each product. MDM holds the one agreed identity of each product.
How is MDM different from an identity graph? An identity graph links devices, cookies and logins to a person for marketing, and it accepts probable matches. MDM builds an official record that billing and finance rely on, so its matching is stricter, and doubtful cases go to a person.