Master Data Management Overview

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Questions and Answers

What is the primary purpose of reference data?

To provide real-time analytics for business operations

To define complex algorithms for data analysis

To categorize other data through predefined values (correct)

To store all transactional data of a company

Which of the following best describes master data?

Entities critical for business operations across various departments (correct)

Information that is not shared across different systems

Data used solely for accounting processes

Data that is frequently updated and changed

Which of these is NOT considered reference data?

Employee transaction records (correct)

Customer Status (active, inactive)

Level of education (MS, BS, PhD)

Geographic codes used for categorization

What characteristic is common to both reference data and master data?

They are vital to business operations and systems Signup and view all the answers

Which of the following is a correct example of reference data?

Predefined status categories for customers Signup and view all the answers

What is one of the main goals of a master data management program?

Managing the costs of data integration Signup and view all the answers

Which principle emphasizes the responsibility for managing and maintaining data within a system?

Ownership Signup and view all the answers

How does reference data management help organizations?

By reducing risks and costs of data integration through consistent reference data use Signup and view all the answers

What does MDM primarily control?

Master data values and identifiers Signup and view all the answers

Which of the following is NOT a business driver for establishing a reference data management program?

Increase data redundancy Signup and view all the answers

Which goal focuses on ensuring data integrity and quality?

Quality Signup and view all the answers

What is a key benefit of having complete and consistent master data?

Easier sharing of data across company functions Signup and view all the answers

What does the principle of controlled change refer to in reference and master data management?

The methodologies for handling changes to data Signup and view all the answers

What is a false negative in the context of data matching?

When the system fails to identify two matching records as the same Signup and view all the answers

What constitutes Party Master Data?

Data about individuals, organizations, and their roles in business relationships Signup and view all the answers

What is the purpose of linking all roles to a central person in Party Master Data?

To create a 360° visibility of the entities involved Signup and view all the answers

Which of the following best describes cross reference lists?

They translate between different code values Signup and view all the answers

What type of data structure provides hierarchical information?

Taxonomies Signup and view all the answers

Why must RDM manage and standardize reference data sets across a company?

To maintain consistency and effectiveness in internal processes Signup and view all the answers

What does internal reference data generally refer to?

Standardized values used for categorizing internal operations Signup and view all the answers

Which of the following roles can a single individual occupy within Party Master Data?

Multiple roles at once Signup and view all the answers

What is a key purpose of governance processes in data management?

To determine data sources to integrate Signup and view all the answers

What differentiates a System of Record from a System of Reference?

A System of Reference provides data but does not capture it. Signup and view all the answers

What is a primary focus of Data Sharing Agreements?

To ensure high quality data is shared Signup and view all the answers

Which metric would NOT typically be tied to reference and master data processes?

Employee satisfaction ratings Signup and view all the answers

What can be said about a data warehouse?

It serves as a storage space for integrated data. Signup and view all the answers

What is the primary goal of Reference Data Management (RDM)?

To ensure consistency and accuracy of categorical values used for classification Signup and view all the answers

What types of entities does Master Data Management (MDM) primarily focus on?

Core business entities such as customers and products Signup and view all the answers

What does a false positive in data matching indicate?

Two distinct records are incorrectly identified as the same entity Signup and view all the answers

How does RDM contribute to the classification of data within an organization?

By providing context through standardized values Signup and view all the answers

What is a potential risk associated with data matching?

False negatives where matching records are overlooked Signup and view all the answers

Which of the following is NOT typically included in master data managed by MDM?

Market research data Signup and view all the answers

What is the primary purpose of data matching?

To combine records that refer to the same entity Signup and view all the answers

According to the definition of MDM, who collaborates to ensure the accuracy of master data?

Business and IT teams together Signup and view all the answers

Study Notes

Party Master Data

A single individual can play multiple roles such as Agent, Beneficiary, Customer, and Employee.
Party Master data provides a 360° view by linking all roles to a central person record.
Roles associated with the central person record are Owner, Agent, Employee, Insured, Beneficiary, Customer, and Other.

Reference Data Structure

Reference data is used to categorize and classify other data.
Reference data remains relatively static and provides standardized values for other data elements.
Reference data structures include lists, cross-reference lists, and taxonomies.

Reference Data Management (RDM)

RDM manages and standardizes reference data sets across the company.
Client applications utilize reference data to define statuses like Accepted or Received, Paid or Funded, and Closed or Completed.
Reference data helps ensure consistent data usage across systems.

Master Data Management (MDM)

MDM ensures the consistency, accuracy, and reliability of Master Data, which details critical business entities like customers, products, employees, and suppliers.
MDM focuses on managing core business entities, ensuring that data about entities is consistent across multiple systems and departments.

Goal and Principles of MDM and RDM

The goal of MDM and RDM is to ensure complete, consistent, current, and authoritative data across company processes.
This data should be easily shared across company functions and processes.
Key principles of MDM and RDM are shared data ownership, data quality, stewardship, controlled change, and data authority.

Data Matching

Data Matching involves identifying potential duplicates across datasets for consolidation and improved data quality.
False positives occur when two distinct records are mistakenly deemed duplicates.
False negatives occur when two records representing the same entity are not recognized as duplicates.
Data governance processes define data sources, quality rules, stakeholder needs, and data steward responsibilities.

System of Record and System of Reference

A System of Record is the authoritative source for data creation and capture, adhering to specific rules and expectations.
A System of Reference provides reliable data to consumers, even if the data didn’t originate within that system.
Data warehouses act as repositories for data from various sources, promoting consolidated information.

Agreements define data sharing policies and conditions.
Data quality is critical to ensure that consumers receive high-quality information.
Processes address root causes of quality or availability issues.

Metrics for MDM and RDM

Important metrics include data quality and compliance, data change activity, data ingestion and consumption, service level agreements, data steward coverage, total cost of ownership, and data sharing volume and usage.

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Description

This quiz covers key concepts in Master Data Management (MDM) and Reference Data Management (RDM), including the roles of individuals in party master data and the significance of reference data structures. Understand how these frameworks help maintain data consistency and provide standardized values in various applications.