In recent posts Aaron Zornes (@azornes: MDM and Next-Generation Data Sources) and
Henrik Liliendahl Sørensen (@hlsdk: Another Facet of MDM: Master Relationship Management) shared their vision about the future of Master Data
Management as a discipline that does not only mitigate architectural flaws
of the past, but will create business value for the years to come. They
identified management of relationships as a next-generation focus, and Henrik even suggested the terms Master Entity Management and Master Relationship
Management.
Indeed, this is another reminder that successful Master
Data Management is based on Master Data Modeling which actually distinguishes
Master Entities and Master Relationships. Moreover, here is the historic
opportunity to underscore the business value of (Master) Data
Modeling.
Party (as described in my comment post What domains are people managing with MDM?) refers to any natural person or
legal entity that is relevant for a business. High-quality Party data are necessary ingredients,
but to generate business value, an organization needs to win Parties as
Customers, Suppliers, Employees etc., i.e. to create and record
relationships between those Parties and the business.
In a traditional siloed approach, Parties and their
relationships with the business organization are not differentiated. Parties in
the role of Customer are kept in sales systems, Parties in the role of Supplier
in procurement systems and Parties in the role Employee in systems related to
Human Resources. This approach neglects a.o. that
- A Party can e.g. be Customer and Supplier
- A Party can be Customer in multiple sales systems that may coexist and be used depending on the product / service which was ordered
- Even within the same organization, Marketing, Sales, Order Processing and Accounting will naturally have a different understanding of what a "Customer" is
- Depending on the industry, even one purchase (order) / contract may have multiple "Customers", e.g. the roles of Contract Partner, Beneficiary and Payer may be represented by different parties.
Conclusion: The differentiation of Master Entities
and Master Relationships is not only paramount for a structurally-sound approach that allows to generate a complete view of all relationships which a party has with a business
organization. It is also a crucial prerequisite to extract and distill the value-critical components from the Master Entities and thus to reliably evaluate the actual benefits and
costs as well as the opportunities and risks of a business connection based on
the detailed benefit / cost / opportunity / risk that come with each single
role that a Party occupies.
