What is Master Data Management?

Master Data Management (MDM), is a set of tools and methods for managing a company’s data pertaining to its business needs, such as sales, marketing, and operational strategies. The function of a MDM is to ensure the integrity of a company’s data repository, so that all services can access accurate, relevant, and up-to-date data at all times, from a single point of access.

Today, all businesses have access to large volumes of disparate and dispersed data sets and information. These are either generated by internal software or external sources, such as Big Data.

Companies realize that they need to control, sort, and evaluate all this information to be able to exploit it with confidence.

According to experts, the implementation of a MDM is an economic and strategic advantage:

  • A survey by Gartner reveals that organizations poor data quality is responsible for an average loss of $15 million per year,
  • An IBM report to ABERDEEN Group, a company specializing in international market research, states: “Companies that use Master Data Management (MDM) are twice as satisfied with the quality of the data and the speed of delivery.”

In this article, we’ll see how Master Data Management simplifies business data management through the following topics:

What is a company’s reference data?

In computer science, data is classified as basic coded information: a customer ID, a postcode, an order number, an order date, etc.

A definition of reference data for Master Data Management

This reference data varies depending on the user, or the need for it. For an operator, for instance,it involves structuring business information: a customer account for a sales manager, an accounting account for a chief accountant, and so on.

For a business project manager, reference data is the information shared across several business processes. For example, a customer account is accessed by sales, marketing, and accounting services.

In the caseof an IT project manager, reference data is the data set used in various software solutions, such as Customer Relationship Management (CRM), Commercial Management, and Accounting.

The three main types of baseline data are:

  • Master data, which contains key business objects: customer, supplier, commodity, employee, etc.
  • Consecutive data that complements the master data: a customer’s address (street, zip code, country, etc.); the features of a commodity (color, dimensions, photograph, etc.).
  • Value tables or billings: VAT rates, currency codes, country identifiers, postcodes, etc.

Within the company, all this data must meet established quality criteria, such as uniqueness, accuracy, completeness, compliance, consistency and integrity. But the data must also respond to operational issues. That is to say: to be up-to-date, easy to access, relevant, and understandable. Data records must also comply with security rules of the country in which the enterprise is based. In fact, they must be accessible only through authorized services and personnel. The company must also implement the logging of access and changes.

An example: Customer data

Let’s consider customer data, which is shared and used by CRM, Business Management and Accounting.

These three systems retain and use common information–such as, names and addresses–which complements the client entity. They also hold and update business information specific to their functions:

  • CRM: exchange dates with the sales department, the name of the account’s salesman,
  • Business Management: purchase history, pricing conditions,
  • Accounting: financial accounts, outstanding payments, date of last payment.

The difficulty with this constantly changing information is to retain an accurate record of customers’ situations at all times:

  • Who is responsible for updating customers’ addresses?
  • How can we replicate an address change reliably, and in real time so that all departments have access to the updated record?
  • How can we maintain the accuracy of common information between potentially different applications in different departments?
  • Under what conditions do CRM[EP3]  and Accounting Management have access to the clients’ outstanding payments?

The functions of Master Data Management?

Master Data Management is a set of tools, methods, and also rules and best practices that allow a company to manage its data.

A MDM has all the means to create a repository for the company’s structuring data. The scope of a MDM’s intervention is, therefore, enormous, as the MDM will centralize all functions:

  • Data acquisition: direct entry, internal sources (application processing, connected objects, IOT), and external sources (databanks),
  • Data validation according to common syntax rules, business management rules, and consistency rules,
  • Quality treatments, such as research and removal of duplicate information, ISO standards, etc.,
  • Identification of the data through a single client ID,
  • Data security (a change of address which does not involve a third party[EP5] ),
  • Data description: metadata updates,
  • Transcodification: reorganization of the data between applications.

Depending on the type of data within the system, these functions will be performed directly by a MDM tool, an application that owns [EP6] the data, and grants access to users:

  • A list of municipalities is imported from the The National Institute of Statistics and Economic Studies (INSEE) database and made available to applications that need it,
  • Customers are created in the CRM and disseminated to Commercial Management and Accounting services,
  • Any outstanding payments are updated in Accounting and also accessible by authorized personnel within the company.

Master Data Management will also be responsible for ensuring compliance with data management and retention times in accordance with existing data protection and financial regulations, such as the RGPD (General Data Protection Regulation) for personal data and for accounting and financial data, IFRS (International Financial Reporting Standards).

Why implement a Master Data Management tool?

Centralized management of reference data is good for the company.

In the absence of the centralized management of reference data, the company retains separate data archives. This is problematic because the data is likely to be in different formats, not always synchronized, and introduces the risk of false, inaccurate, and inconsistent data which costs the company time and money.

The principles of setting up a MDM:

  • A unique and identified data source,
  • The dissemination and provision of accurate data to data “consuming” applications (ERP, CRM, WMS, BI, and so forth).

The benefits of a MDM for your business:

  • Operating gains from having access to quality data,
  • Time savings to access accurate data,
  • A complete overview of the company’s data set,
  • Greater ease in implementing Business Intelligence analytics tools.

Master Data Management and Big Data?

The implementation of Master Data Management will also allow the company to exploit Big Data to its benefit.

Today with improved technology, enormous volumes of accessible data (Big Data) are of growing importance. This structured and unstructured data comes from the Web, Open Data (freely available to everyone), IOTs, etc.

However, Big Data is not in usable condition by the company, because it’s too numerous, most of it is redundant, available in multiple formats, and of unknown origin.

The idea, therefore, is to use an ETL (Extract Information Load) which consolidates the information contained in a “Data Lake” into a destination system that can be used as reference data. For example, the hashtag #MDM if the company wants to process and analyze posts on social media about MDM.

This information is processed, qualified by removing duplicates, inconsistencies are dealt with, the data is made understandable and interpretable, and can then be linked to company reference data to be used by marketing and sales departments, track customer behavior, measure brand awareness, make predictions, etc.

The EAI, a tool for sharing and exchanging reference data

The deployment of an Enterprise Application Integration (EAI) will allow the dissemination of reference data to be organized by linking applications within an organization together.

One of the main goals of an EAI is that all connected applications share the same data source. For each piece of data a data application source is defined. The EAI then disseminates the data via the EAI bus which allows different systems to communicate through a shared set of interfaces to the applications that request it.

Data transport and transformation provided by the EAI (ETL):

  • Transformed into a pivotal format,
  • Transported between different applications that provide/input the data and the applications that consume it.

The EAI will thus make it possible to define a single-entry point for the reference data.

The EAI also implements a “virtual repository” of reference data that is shared with all connected business applications.

Connection of the EAI bus to other tools/applications

So that users can share information, through this EAI bus it is also possible to connect:

  • The company’s websites,
  • Middleware, Web services for mobile applications,
  • The Data Lake (a repository of data stored in its natural/raw format)

The implementation of an EAI in a company is therefore an important step in the implementation of a MDM project. It will both identify data, and set up the processing and loading stages. But what are the benefits for the company?

What are the immediate benefits of EAI for the company?

Setting up an EAI in an information system is tactical and strategic for the company. These benefits are characterized below.

Tactical benefits:

  • Obtain quality baseline data quickly,
  • Speed up data delivery to consumer applications,
  • Delete point-to-point interfaces and batches of data updates in different applications,
  • Simplify the architecture of the existing Information System (IS), and end spaghetti syndrome with EAI flows.

Strategic benefits:

  • Gain greater agility to evolve the company’s IS,
  • Simplify the integration of new applications,
  • Facilitate access to external data sources (Open Data, Big Data),
  • Enable the consolidation of subsidiaries and acquisitions.

In short, Master Data Management (MDM) offers many advantages. Beyond centralizing and updating data through the company’s data repository, the MDM ensures the uniqueness of the data that is collected, and eliminates the risk of duplicated data in your IS.

For more than thirty years, Tenor has been supporting its customers in managing their data flow through specially crafted EDI solutions and software, EAI, and dematerialization. If you liked this article feel free to check out the one on the definition of the EAI available on the Tenor Blog.

EAI and ETL: two separate engines for integrating your data

Many differences exist between EAI and ETL. Although it can sometimes be confusing, EAI and ETL each play a distinct role in the urbanization of an Information System (IS).

Find out more in this article about their similarities and differences, which presents the opportunity to identify how to use them in your inter-application communication exchanges.

What is an EAI?

An Enterprise Application Integration (EAI) is a software solution that communicates the different applications of a company’s information system by linking applications within an organization together.

Thus, this type of platform orchestrates inter-application flows according to sophisticated routing rules: this is the workflow of your project.

An EAI is an application that organizes the flow of information between heterogeneous applications and makes them interoperable.

An EAI has three functions:

  • Connecting to the application bricks[EP1] ,
  • Data integration: converting and integrating information into a common language,
  • Transporting data streams: from the transmitting application to the receiving app.

To operate, the EAI has access to company-related reference data, a business rules engine, application connectors and an information transportation system.

There are, indeed, some similarities between EAI and ETL. But first, let’s find out what an ETL is.


An ETL (Extract Transform Load) is a type of exchange software that collects data from multiple sources, restructures it, and transfers it to a data warehouse.

In this age of Big Data, ELTs are adapting to new types and sources of business-related data to facilitate and support decision-making from a large amount of information.

The operation of an ETL can be broken down into three stages:

  • Data collection where all the data that has been collected/altered since the last run. The raw data may come from one or more sources;
  • Data transformation, to format data, including aggregating it;
  • Data input which involves inserting the data into the decision-making database or target databases.

In short, EAI and ETL are both considered as middleware. But how do they fit into your IT architecture?

EAI and ETL: two different middleware engines

Although they can be both pigeonholed under the generic term “middleware,” an EAI is not an ETL, and an ETL is not an EAI. Each meets different objectives connected with data integration issues.

An EAI is business oriented, it works according to functional rules, and links all the applications of your information system. Similarly, it knows how to manage two-way flows with moderate volumes of information.

An EAI makes it easier for applications to maintain interoperability by transferring only their most necessary data, almost in real time, to system users.

TIP: During data flow processing, pay attention to complex management rules and transaction size for network bandwidth.

For its part, an ETL works in batch form where consolidation rules are linked to data or metadata. It is BI-oriented (Business Intelligence) and functions at the level of decision analysis applications. As a result, the ETL manages one-way flows and can process Big Data.

In summary, an ETL allows complex transformations and aggregations of large volumes of data for a multidimensional database.

TIP: Pay attention to disk space requirements and network latency between extraction time and availability in the data warehouse. Therefore, focus on running operations at night.

How to choose between ETL and EAI

EAI is a choice based on target architecture

The implementation of an EAI forms, in part, a construction called an EAI (Enterprise Architecture Interface). In other words, it is application-oriented architecture. However, ETL is the tool of data-oriented, inter-software architecture.

EAI architectures are “Hub and spoke” (star topology), “Network centric” or SOA, for sharing the functionality of applications.

Often, flow mapping is not frozen and is malleable. This is the case for migration projects in which existing computer systems must coexist within a new system.

ETL for flow analysis and Big Data

Until now, decision-making tools have been primarily intended to manage internal corporate data as a decision-making aid.

Today, with variants such as the ELT, it is becoming possible to integrate external and strategic information to improve performance. One step closer to utilizing the power of Big Data for your company’s decision-making chain!

CIO names Business Intelligence solutions as a tech priority in terms of finding solutions for dealing with Big Data and piloting projects over the coming years (CIO TechPolls: tech priorities 2018).

EAI and global enterprise

The specialization of trades and the complexity of their needs often leads to a proliferation of specialized applications within the same company: an ERP application on its own, for example, rarely covers all the needs of a company.

The more business software applications there are in one company, the more complex a business’s integration and data sharing becomes. Moreover, these systems are crucial to the proper functioning of information systems.

The brilliance of an EAI is that it is used to communicate between applications that were not designed to interact with each other.

Therefore, with the implementation of an EAI project, the number of overall interfaces is limited, and the overall system (and the company’s staff) is facilitated to work better.

TIP: Consider organizing file formats by transaction type to reduce the effort of system switching when integrating future new applications.

Different features to consider for your business processes

As we can see above, ETL and EAI are two integration solutions with different functions. The first is decision-oriented, and thus a decision-making tool. The second is service-oriented and collaborative between applications. EAI is, in particular, the bias taken by DEX. Rightly this one is also called ESB (Enterprise Service Bus) where centralized software integrates backend systems to create an interface usable by new applications.

We can still find something in common: sharing a unique vision of your company’s data and business processes !

For more than 30 years, Tenor has been helping its clients set up and manage their data exchanges. Our computerized data exchange and paperless taxation complement our EAI software. To delve deeper into the subject, check out our definition of EAI, or this excellent article on vendor support. If you prefer, you can also contact us to discuss your project.

What is an Enterprise Application Integration (EAI)?

The English term “Enterprise Application Integration” (EAI) is also known as Echanges Inter-applicatifs de Données (inter-application data exchanges) in French. This term refers to an IS architecture that allows the intercommunication of several types of software with each other, and basically manages these various exchanges.

Here we can also talk about managing inter-application flows. Briefly, the middleware software tools used to create these EAI architectures are called EAI software. EAI software allows you to connect to all types of data sources, to extract data, manipulate and structure data, and then deposit it in any other data structure. The execution of these manipulations and the synchronization of data is programmable, and triggered by any type of “event” (meaning an action or occurrence set up to be recognized by the software).

In this era of Big Data, large volumes of data have become the raw material of Information Systems within many companies, and therefore it seems obvious that businesses should take advantage of this data and use it. Indeed, today’s enterprises may want to use data from all of their software infrastructures across parallel tools, while ensuring quality and reliability at all times.

Finally, the goal of an EAI is to collect, route, and synchronize data from different applications. In fact, this avoids directly interfacing the applications with each other, and thus creates a complex and tangled (spaghetti) architecture.

Why perform EAI application restructuring?

Rationalize the application fleet and centralize flows with an EAI

The EAI allows companies to overhaul their entire software organization. This can be considered a mandatory crossing point given the mille-feuille architecture of companies computer systems. Switching to an EAI requires systematically and methodically being able to assess the usefulness and practices of keeping a particular software active within the company. Passing this step allows you to conduct the various mappings required for the integration of a company’s business applications. The EAI thus manages a set of flows that are ultimately centralized.

Valuing historical data

When setting up EAIs and reordering data, it is possible to extract this data in a standard format. Historical data recovered from outdated and/or unused applications can be reconfigured with more recent and valuable data in the company’s database.

Reducing costs through the EAI

Avoid more costs associated with maintaining the data stored in outdated systems. EAIs eliminate the maintenance and licensing fees of obsolete data, which tend to increase steadily with a company’s age. In addition, these savings will allow investment to be regained and put towards other areas. Finally, the EAI allows you to add services to already existing streams without re-mapping them.

Data security

Setting up EAIs helps to isolate sensitive data (for data protection purposes), and thus make it unattainable from external threats is made possible by an EAI’s compliance management tools.

Data harmonization

In a business context of reconciliation and external growth, an EAI will allow the harmonization of data and the management of its archives. It is also a good way to meet regulatory expectations and structure data archiving.

What applications can be connected to EAIs?

There are a significant amount of applications that can be connected to EAIs. The ones that are most often used, and of major importance, are often the ones that communicate least with each other! In this context, it is a matter of identifying priority applications in the company which will communicate with the EAI.

  • In particular, ERPs (Enterprise Resource Planning), or IMSs (Integrated Management Software), are at the heart of all industrial companies. Publishers like SAP, Sage or CEGID are already interoperable with EAIs.
  • CRM or Customer Relationship Management and GRC for Gestion de la Relation Client in French. There are many indelibles with EAIs like Sales Force, INES, Microsoft Dynamics, and so on…
  • Some publishers, such as StockIT, are already collaborating on the implementation of EAI for the WMS (or Warehouse Management System) whose objective is the management of storage warehouses.
  • TMS or Transport Management System software manage transport operations. This software is at the heart of all organizations that handle customers/suppliers orders in tight time-restricted flows.
  • EDI or Electronic Data Interchange translators are software that allow information exchanges between two entities, such as trading partners, using standardized messages. These messages can be purchase orders, delivery orders, invoices, etc., Tenor EDI Services has been a major player in EDI for more than 30 years.

What kind of EAI projects exist?

CRM and ERP integration projects

Companies that evolve or change CRM/ERP often find themselves in a situation where recovering and exploiting historical data is extremely complicated, or impossible. Implementing an upstream EAI solution facilitates the migration of information and the evolution of the IS infrastructure. To do so it will be necessary to implement an ETL or ETL Architecture.

Consolidating subsidiary accounts

The most convincing business use for EAIs is the consolidation of existing management systems. Nowadays, groups evolve through external growth, mergers, acquisitions, spin-offs, … In short, the need to be able to quickly consolidate (marry two heterogeneous management systems together) without embarking on heavy and expensive ERP migrations, is essential. An EAI is the ideal alternative to consolidate your ERP and accounting quickly and efficiently.

Interfaced Web portals

User portals (externally accessible) or extranets (internal private networks) can be a real security headache. Thus, it is vital that they are able to communicate and exchange information with the heart of your IS safely. Into the bargain, these portals and e-commerce sites are made by companies in addition to your management tools, and this creates major security vulnerabilities. An EAI allows data to be safely synchronized between your e-commerce portal, your extranet, your customer portal or supplier, and your ERP management tool.

The EDI Interface

Use the data already available in EDIs to communicate with software such as CRM, ERP, TMS, and so forth … Also, having an EAI allows you to construct simplified mappings and monitor simplified streams. All the benefits of EAIs lie in the quality of their interfacing and interoperability with multiple software. It is necessary to secure data and track it over time. But also, to ensure the ease of implementation of new services once they are installed.

Check out our DEX 10 offer to launch your EAI project. You can also get close to our experts to identify your needs and qualify what your specifications are. Experts in data flow exchanges for more than 30 years Tenor also accompanies you throughout your EDI and paperless billing/invoicing projects. Contact us to launch your project now.