Master data (eg. is data and about things or people. which if not managed can be different in each system. For example customers names, customer addresses, employees, products, parts, vendors.

Master data management is the process and tools used to manage this master data.

The other types of data that an organization has are :

1. Reference data (data that rarely changes (if ever) eg. calendar dates, US states and territories, etc.)
2. Transactional data

Master data if not managed can be different in each system, for example customers names, customer addresses, employees, products, parts, vendors.

The impact of this is that the reports are ever so different, the customers are not segmented right (ie because customers are not in the appropriate segment, they are usually treated like the customer belongs to a lower segment), decisions are not “correct” for the customer because they were not segmented correctly).  Work load increases as the data is input anew for each customer.

Customer intimacy is missing as the customer has better knowledge about the relationship than the company does.  This has a direct impact on customer retention, which in turn leads to a higher churn rate and lower revenues.