The Value of Referential Data in Your Master Data Program
Navigating Referential Data Management: Strategies for Success?
Success in referential data management hinges on strategic navigation. Begin by defining clear objectives, aligning them with business goals. Select a reputable vendor offering accurate, relevant data aligned with your industry. Establish seamless integration processes to ensure smooth data flow across systems. Prioritize regular maintenance and updates to keep data current and reliable. With these strategies, you can harness the power of referential data to enhance decision-making, improve data quality, and unlock new opportunities, propelling your referential data program towards success.
Setting the Standard for Data Quality
You’re on a mission—a mission to master your data. The road to master data is threefold. First, you need to create a clear internal relationship view of your customer across all of your business processes and repositories. Second, you need to provide an external view which enables an opportunistic understanding of the additional whitespace. And finally, you need to show value for your master data program and fast.
Like most of us on this mission, you have several source systems all with varying degrees of data quality. Some legacy; predating your time at the company and from what you hear no one who worked on it is still around whom even remembers how the data structures were built. Others aren’t too bad, but they are all somewhat siloed with different data definitions. No one said the road to data mastery would be easy.
Now imagine that one of your internal source systems within your enterprise data environment had expertly pre-mastered data right from the start—meaning no duplicates, every entity was known and enriched with the information necessary to understand its value to you and your organization. It was updated and maintained, required no stewardship and had standard definitions and hierarchies that you could work with. You’d likely consider it your gold standard and you’d use it to compare the data from all of your other data sources to it.
Most of us are not that lucky—we don’t have access to that treasure chest of information. When you don’t have this internal data nirvana at your fingertips you have two options.
There are several advantages to using a referential database. The referential database enables you to take your blinders off regarding your own company data quality. It sets a standard of quality that will show you where data is going right and where it is going wrong in your business.
Your referential data vendor keeps the ‘gold standard’ up to date, deduped and clean. That’s a costly and time-consuming venture you don’t need to take on. You need to spend your time fixing the wrongs and replicating what’s working with your data processes.
The referential database should also provide additional attributes like hierarchies and firmographic data that can further the insight of your internal data. It can bring the value of your mastering to a new level, enabling a quicker ROI for your overall MDM program. All of your data that matches or can be related to the referential database can now have analytics run against it. You can begin to make decisions on your data sooner knowing they will be decisions made on good, clean, standardized data.
Your referential data should consist of a superset of the data that you are attempting to master. The data that you need to steward should be found in your referential set. It will help you clean your data faster. Referential data also provides the view to the outside world – your opportunity. You can’t see that with your internal data. Your referential data can give you access to the best prospects that you didn’t even know about.
Referential data should be an invaluable component of your master data program. It can immediately set your standard for data quality, provide additional insight and visibility to opportunities. It will help you achieve more immediate ROI for your master data program. And most of all it will ease your burden of setting and maintaining the gold standard. It can help your threefold mission seem more like a guided tour than being lost in the wild.
Difference between Referential data and Master data.
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Aspect
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Master Data
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Referential Data
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Definition
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Core data entities essential to business operations.
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Data used to establish relationships between entities.
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Nature
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Represents primary business objects.
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Consists of foreign keys or identifiers.
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Persistence
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Typically, static, or slow changing.
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Dynamic, often changing as relationships evolve.
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Examples
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Customer information, product details, employee records.
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Foreign keys linking tables, IDs referencing other entities.
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Management
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Managed centrally to ensure consistency across organization.
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Used to enforce integrity constraints and maintain relationships.
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