Master data is data about resources, products, entities, places or things that includes description of properties and parameters. Unlike the transaction data, the master data is used over a long period of time and thus the quality is essential.
What is the master data used for in practice?
Master data is the main source of information to run an organization. The data about entities (customers, suppliers and other business partners), resources (especially assets, human resources and finances), products, materials, projects or production capacities.
The master data is shared across the business and is used is various business processes. It can be stored in various software or software applications, typically in ERP software, CRM software and the like. A poor quality of master data is the most frequent reason for bad decision-making or loss of time (spent on searching for missing data, etc.) which generates extra processing costs.
Therefore, the quality of master data and master data management is extremely important for healthy business operation. Master data should be managed and stored in such a way, so that it is the single source of truth, no matter if the data is managed centrally or not. What is important is that the organization keeps the processes of master data creation and editing under control to avoid unnecessary redundancy, duplication, or other defects.