In this article, we are going to talk about master data. Master Data is everywhere. We see master data all around us. For example, if you go to Safeway, you go buy a bunch of products where you buy some soap and other stuff, and then you go to the billing counter, all your items are scanned and you’ll be asked if you have a reward card. So, this is a card that you’ll be given whereby your discounts will be cumulatively added and if you don’t have one, they’ll give one right away. What does the reward card have? A rewards card has your name, address and some of the personal details about you that they think are relevant for your purchase. This right here is Master Data. You can also call it customer master because you’re a customer in this case and Safeway is the company of the vendor which is selling you these products.
What is Master data?
Master Data is at its very fundamental level a collection of properties of an object. Objects could be customers, materials, vendors, assets, any of these. Typically, this kind of data is created only once, meaning you don’t create them again and again and again. For example, in the previous case when Best Buy was created as a customer, you don’t get BestBuy again and again and again. It’s created once, but it’s used again and again and again. And because it’s created once, you rarely change it. It’s changed occasionally. It is also the main source of data in transactions. You take any transaction sales order, delivery, billing, purchase, order, transfer order, posting to accounts, any kind of transaction typically has the bulk of the data coming in from the master data.
Properties of Master data
- Created once and used again and again.
- Rarely changed.
- Main Source of data in transactions.
Types of master data
Let’s dig into some examples.
Let’s say you go buy a piece of bread or buy a bottle of milk and then you go to the counter and these products are scanned. When they are scanned just one little scan can reveal a whole bunch of information about the product.
What kind of information could that be? Some examples, of that information, could be:
- Product name. For example, a particular model of bread is bread plain bread, milk break etc.
- Product description
- Price for that product and
- Discounts they are given on that product
- Cumulative discounts that are given on
Here, Product Name and Product Description are master data. This is called data related to the material. And so it’s called material master data. Whereas, Price, Discounts and Cumulative discounts can be called pricing master data.
Take another example of Amazon. You go to Amazon and you go log in, right? So, you have your username and password as soon as you log in. You can go to your account any time you want. So, when you go to your account you will have details like names, addresses. You can have multiple addresses like one address in Delhi, India one of those in Texas, US, you can store all your different addresses and you can store your credit cards or debit cards details and also different debit cards and credit cards. All of these are master data. And in this case, you are the customer, so you can call it customer master data. All these are common examples of master data that you typically see in a B2C environment all along.
Say, HP is a company that is implementing SAP and a company buying from HP say Best Buy. Now, Best Buy places an order for, let’s say computers or whatever products that HP sells and HP creates an order. The order contains a header and has line items. Let’s say one, two, three, however many.
On the header, what kind of information does it have?
- Customer information: It has customer information of course and that’s Best Buy in this case,
- Tax: The next thing is a tax classification
- Corporate/Government: What kind of a customer is he, a corporate customer or is he a government customer or any other. In this case, he is a corporate customer or retail customer.
- Ship: Can we ship all the goods together, yes or no? In this case, being a customer it’s an option that Best Buy gives, right?
- Address: address to which we need to ship the goods.
- Phone number: If there are issues which phone number to call to.
- Payer: Who will be paying for this transaction.
- Billing address: Where should the bill be sent?
These are all the things that are captured, at the header level.
Now, similarly, at the line-item level, what do we have?
- Material: We have details like material that say it’s a computer model one on one
- Weight: Say, 5 lbs
- Plant: Which plant is it going to send the goods out of? Let’s say it’s sent out to the Bangalore plant.
- Tax classification: Sometimes some goods, some materials are taxable and some materials are not.
Looking back to header data, we have data related to customers and line-item data has data related to the material. So basically, master data in this case is a bunch of properties related to a customer or a material.