Master Data versus Reference Data Malcolm Chisholm Ph.D. Reference Data Portal www.refdataportal.com mchisholm@refdataportal.com © Askget.com Inc., 2006. All rights reserved

What are Master and Reference Data? © Askget.com Inc., 2006. All rights reserved

Data Exists As Different Layers Increasing: Semantic Content Per Value Data Quality Importance Most Relevant To Design Metadata Reference Data Most Relevant To Outside World Transaction Structure Data Enterprise Structure Data Most Relevant To Business Transaction Activity Data Most Relevant To Technology Transaction Audit Data Increasing: Volume of Data Population Later in Time Shorter Life Span © Askget.com Inc., 2006. All rights reserved

Layers of Data Metadata – Usually describes the structure of databases. Found in a database’s system catalog. Sometimes included in database tables. Reference Data – Codes and descriptions. Tables containing this data usually have just a few rows and columns. Transaction Structure Data – The parties to the transactions of the enterprise. E.g. Customer, Product. Enterprise Structure Data – Data that describes the structure of the enterprise. E.g. organizational or financial structure. Transaction Activity Data – Traditional focus of IT – in many enterprises the only focus. Transaction Audit Data – Data that tracks the life cycle of individual transactions. Includes server logs. © Askget.com Inc., 2006. All rights reserved

What Is Reference Data? Definition of Reference Data: Reference Data is any kind of data that is used solely to categorize other data found in a database, or solely for relating data in a database to information beyond the boundaries of the enterprise. Also known as: Lookup Data, Domain Values. Some people include Master Data and Enterprise Structure Data as reference data. Some people regard any data imported into a database, or not updated by a system as reference data. © Askget.com Inc., 2006. All rights reserved

What Is Transaction Structure Data? Definition of Transaction Structure Data: Data that represents the direct participants in a transaction, and which must be present before a transaction fires. Definition of Transaction Activity Data: Data that represents the operations an enterprise carries out Some people do not think of data that represents all participants in a transaction as Master Data. They only recognize some, e.g. Product, Customer. © Askget.com Inc., 2006. All rights reserved

What Is Enterprise Structure Data? Definition of Enterprise Structure Data: Data that permits business activity to be reported or analyzed by business responsibility. Some people call it “hierarchies” or “dimensions”. © Askget.com Inc., 2006. All rights reserved

Master Data Metadata Reference Data Transaction Structure Data Enterprise Structure Data Transaction Activity Data Transaction Audit Data Master Data = Reference Data (Code Tables, Taxonomies) + Transaction Structure Data (Product, Customer) + Enterprise Structure Data (CoA, Org. Structure) © AskGet.com Inc., 2006. All rights reserved

Common Definition of Master Data does not Include Reference Data Metadata Reference Data Transaction Structure Data Enterprise Structure Data Transaction Activity Data Transaction Audit Data Master Data = Transaction Structure Data (Product, Customer) + Enterprise Structure Data (CoA, Org. Structure) Many people do not like code tables, and see Master Data as Product, Customer, Chart of Accounts, Organization Structure, etc. We will use this definition for this presentation, although we do not agree with it. © AskGet.com Inc., 2006. All rights reserved

Master and Reference Data Transaction Structure Data Transaction Activity Data © Askget.com Inc., 2006. All rights reserved

Characteristics and Management Needs © Askget.com Inc., 2006. All rights reserved

Structure: Differences Master Data Reference Data Many Rows per Table Few Rows per Table Many Columns per Table Few Columns per Table Few Tables per Database Many Tables per Database Changes More Quickly Changes More Slowly Highly Shared within Enterprise Highly Shared within Enterprise and between Enterprises © Askget.com Inc., 2006. All rights reserved

Semantics: Differences Master Data Reference Data Entities Poorly Defined Entities Well Defined No Meaning At Row Level Individual Rows Have Meaning What is “China” in Country Code Table? What is a Customer? Includes Macao Sales: Includes Prospects Accts Rcvbl: Only People who have Paid Excludes Hong Kong © Askget.com Inc., 2006. All rights reserved

Semantics: Management Master Data Reference Data Entities Poorly Defined Entities Well Defined No Meaning At Row Level Individual Rows Have Meaning Definitions Exist within Contexts Need to Attach Definitions to Rows Make Row-Level Definitions Available To Users / Developers “Commonly Accepted Definition” Impossible Need to be aware of Context / Definition in Target System when Exchanging Data Definitions Drive Business Rules Row-level Stewardship © Askget.com Inc., 2006. All rights reserved

Primary Keys: Differences Master Data Reference Data Intelligent Keys Codes / Acronyms Unique Identification Use of Standards Perhaps the Greatest Problem In Master Data Management Standards, e.g. Country (ISO-3166), Currency (ISO-4217) Assist human users Useful in Displaying Data, e.g. “USA” © Askget.com Inc., 2006. All rights reserved

Primary Keys: Management Master Data Reference Data Intelligent Keys Codes / Acronyms Unique Identification Use of Standards Identifying and Resolving Synonyms, and Impact on Transaction Activity Data Finding and Subscribing to Standards Permitting Different Identification Schemes (e.g. CUSIP, SEDOL, ISIN for Securities) Deciding how to create Codes and Acronyms Ensuring Correct Updates Ensuring “Codes” Do Not Violate Semantics, e.g. “EUR” in Country Code Table © Askget.com Inc., 2006. All rights reserved

Business Rules: Differences Master Data Reference Data Business Rules Act on Rows Rows Drive Business Rules Business Rules Reference Data Values Business Rules Act on Master Data E.g. “If Customer Type = ‘GOLD’ Then…” © Askget.com Inc., 2006. All rights reserved

Business Rules: Management Master Data Reference Data Business Rules Act on Rows Rows Drive Business Rules Need to Understand Effects on Business Rules Need to Audit How Business Rules Change Data Versioning Important Stewardship so Change Cycle Does not Disrupt Systems © Askget.com Inc., 2006. All rights reserved

Conclusion Master Data and Reference Data are different kinds of data. They have different properties. They behave differently. They have different management needs. Attempts to manage them using the same techniques will not be successful. © Askget.com Inc., 2006. All rights reserved

Master Data vs. Reference Data Malcolm Chisholm www.refdataportal.com *** Now featuring Reference Data Cost Estimator *** www.masterdatamgmt.com www.bizrulesengine.com mchisholm@refdataportal.com Tel: 732-539-3406 Fax:407-264-6809 © Askget.com Inc., 2006. All rights reserved