People always ask me what is the difference between Master Data Management (MDM) and Master Data Governance (MDG). Are they the same or totally diffrent. The answer is yes, they’re related but different aspects
What is the Difference between Master Data Management and Master Data Governance?
Master Data Management is the technology, tools, and processes that ensure Master Data is coordinated across the business. MDM provides a consistent Master Data service that provides accurate, consistent, and complete Master Data across the enterprise and to business partners. Within this framework, MDG should be pondered as an essential part of MDM.
Master Data Governance defines how Master Data is accessed and treated within a broader MDM strategy, down to access granted to specific users and compliance protocols. MDG constitutes an essential piece in any enterprise Master Data Management strategy; and relates to the way data is managed and protected as an asset. Master Data Governance can be best understood as the use of policies, human resources, processes, and technology to create consistent and proper use of a company’s data.
For instance, a MDG program will define the Master Data models, detail data retention policies, define roles and responsibilities for data creation, management, and access.
Master Data Governance must ensure that the enterprise’s information assets are officially, properly, proactively, and efficiently managed throughout the company to safeguard its trust & accountability. This implies a better organization of business operations. In an era of sprouting regulations like GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) and conspicuous data leaks, Master Data Governance has become a priority for data executives.
Master Data Governance is the procedure to handle the availability, usability, integrity, and security of the data in enterprise systems; based on internal data standards and policies that control data usage. Good Master Data Governance ensures that data is consistent and trustworthy and does not get misused. It is crucial for an organization to meet its goals, derive substantial improvements, and maintain a legal and ethical reputation in the eyes of shareholders, regulators, and the wider community.
Advantages of successful Master Data Governance
Adopting an effective Master Data Governance strategy has many vital benefits:
- Better decision-making. This applies to both the decision-making process, as well as the decisions themselves. Well-governed data makes it easier to find helpful insights. Decisions will be based on the right data, ensuring greater accuracy and trust.
- Operational efficiency
- Improves data understanding: of what your data is and where it is stored; provides an ample view of all data assets.
- Greater accountability. Enforcing roles and responsibility for Master Data Management makes it far easier to determine who is responsible for specific data.
- Greater data quality: Data quality refers to how valuable and complete data is, while Master Data Governance refers to where the data is and who handles it. Master Data Governance improves data quality because answering the latter makes it easier to tackle the former.
- Preserves regulatory compliance, Master Data Governance is necessary.
- Standardizes Master Data Management and exploitation.
- Reduces inefficiencies and costs for Master Data Management.
- Expands data security thanks to the requirements for data access.
- Increases revenue: All the benefits of Master Data Governance addressed above help businesses make faster, better decisions with more certainty. It results in less costly errors.
How Master Data Governance and Master Data Management work together?
Master Data Governance is an essential element in any business MDM strategy, but it cannot work alone. Master Data Management plans and programs are still essential to guarantee that data is properly collected, structured, organized, and stored.
Besides, a good Master Data Governance framework can be implemented only when the proper data collection, classification, architecture, quality control methods, and integration mechanisms, and Master Data Management are in place. You cannot govern data if you do not specify what it is about, how it is collected, where it is stored, and how it can be accessed.
Master Data Management includes procedures from the creation of Master Data to its disposal. MDG makes the rules of the operational processes executed within those procedures. Hence, MDG does not sit as an isolated process. Competent MDM creates remarkable consistency and accuracy in data. It can be an advantage to propel world-class operations.