January 23rd, 2021 | Updated on June 28th, 2022
Enterprise organizations all likely collect master data. This is basically any data that’s shared between separate applications or computer systems.
If your business used a point of sale system, for example, and data from that was sent to your inventory tracking software to set up alerts for new orders, the data they share would be part of your master data.
As companies continue to pursue digital transformations by integrating their systems to improve business processes, proper data management becomes increasingly more crucial.
Reference data is a subset of your master data that’s used for classification and setting hierarchies.
Like most data sets, reference data can come from within your organization, or it can be collected from external sources like suppliers, industrial codes, or outside authorities. There are two basic types of reference data sets: multi-domain and real-time data.
Multi-domain data isn’t connected to any specific industry and can be collected from multiple areas and appear in different content forms.
Real-time data has traditionally been used in the venture capital and military intelligence industries, but it’s recently been used in various internet of things (IoT) applications to tag metadata. Here are some of the most practical ways enterprise organizations can make use of their reference data.
Business Rules Authoring
The idea that businesses need some set standards and rules in place to enforce best practices is as old as businesses themselves.
In the digital age, however, it’s becoming important to let your automated systems set and enforce certain business rules so that employees are always guided down the right path.
Modern business rules often include things like a hierarchy of managers who receive authorization to approve certain processes or a series of automated questions that have to be answered to determine if the proper conditions have been met.
Reference data can be incredibly useful for authoring business rules or determining how they should be tweaked.
As far as automated business rules go, you can set up conditional rules that require certain steps to be completed before continuing a process, qualification rules that determine if a certain user/account should be involved in a process, and decision rules that evaluate subjects.
You can use your reference data to ensure all rules are compliant with laws and regulations.
Transaction data is one of the most important types of reference data. It basically keeps track of all sales and B2B transactions your organization takes part in. Transaction data is broken down into three basic categories.
- Cash Data – These transaction codes are produced when customers make purchases via cash or check.
Bank Services – These are for transactions carried out with a credit or debit card.
- Bills of Exchange – BOEs are written orders to make specific payments. They aren’t commonly used in the U.S., but international enterprises may have to deal with them.
Transaction codes are crucial for keeping up with your financial forecasts and for filing taxes properly.
You can also use them to help your marketing team determine what demographics are buying your products the most and come up with new advertising strategies.
Speaking of marketing, the customer data you collect with your CRM solutions counts as reference data. This can be used for a number of purposes, including making special offers to your best customers to inspire further loyalty.
You can also use it to determine how many customer segments you actually have and how you can better cater to each one.
Every business has a target audience, but that audience could be split into different demographics or by different needs.
By dividing your customer base into segments, you can create separate marketing strategies to cater to each part of your target audience or even come up with products and services that more precisely fit their needs.
These are just some general insights into how reference data can be utilized. Each specific industry will be able to benefit in its own way as well.