Master data is basically all of an organization’s data that’s shared across multiple systems. For example, if a company has their call center software share data with a sales system, that data would be part of their master data. Shared data is crucial for full system integrations, something many organizations are pursuing as part of their digital transformations. System integrations are vital in a world of big data where businesses need to constantly receive the most up-to-date and relevant information in order to gather useful insights that can improve business processes.
Reference data is a subset of master data that’s used for classification. Reference data can include things like product listings, customer information, transaction details, location data, and more. Reference data management ( abbreviation is RDM) is the practice of managing these classifications and hierarchies within a system. In other words, the RDM meaning is to enact reliable frameworks, policies, and standards to manage reference data of all kinds.
Like most forms of data, reference data can be collected from within the organization by an admin or from external sources, such as a technology association, collection of codes, or other authorities. Reference Data Management platforms save organizations from having to build their own RDM devices, which may not be compliant with regulations. Here are a few examples of RDM and why it’s so important.
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Inventory Control
All businesses sell products and services, and most stores have multiple kinds of products. All products have unique PINs that get recorded in inventory, and part of an effective RDM standard is ensuring each product can be accurately tracked to update inventory information provide better customer support. With the right inventory management software, you can always stay up to date on what products you have on hand and even set up automatic restocks when things start to run low.
This also helps improve your customer service, since you’ll always know exactly what models of each product are in, so you can advise customers based on their needs and make new orders before you actually need them. With image recognition technology, you may even be able to flag defective products before they reach shelves.
Transaction Records
Every sale your organization makes and every transaction you have with another business is recorded in a transaction code. These codes differ based on whether they were cash payments (cash or check), bank services (credit and debit cards), or bills of exchange (BOE). While BOE are not typically used in the United States, many worldwide retailers will see them.
Keeping track of all of these through proper RDM is crucial both to determine your profit/loss margins and for tax purposes. Of course, you’ll have to store them following all security protocols to ensure sensitive information is protected.
Customer Segmentation
Every business has a target audience, and you’ve likely honed in on yours already if you’re thinking about reference data. Still, each target market has different segments based on demographics and specific needs. You can use reference data you’ve collected from customers, perhaps via your CRM system, in order to segment your target market and focus more on each segment. This enables you to develop more effective advertising campaigns and come up with ideas for new product development.
Access Control
Effective RDM measures can help you significantly improve your organization’s security. Employee information is stored as reference data which can be used to set access roles for each individual employee. This way, you’ll know that only employees who actually need access to each system will have it. You can also set up multi-factor authentication to protect against password leaks. When employees leave the company, you can also use their reference data to ensure they’re removed from all systems and can’t pose any security threat.
Some additional applications of RDM include life cycle management and easier improvement of system architecture. You’ll likely be able to find additional applications with your own RDM platform.
