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Navigating Taxonomies in Master Data Management (MDM)

Nikhil Bhatia

By Nikhil Bhatia

On February 1, 2016

Master Data Management Solutions

Master Data Management is not just about having an application to manage master data.

Rather it is a culture where processes and applications help define a Data Governance structure for non-transactional data in the enterprise. Setting up a well-defined semantic structure to map data entities and characteristics is one of the cornerstones of Master Data Management. Hence the natural role of Taxonomy.

As part of the business consulting engagements we are asked by a lot of clients for recommendations / solutions for determining a Master Taxonomy for their business. For most clients this is the Merchandising Hierarchy. To determine the master taxonomy we need to first understand what role it plays in MDM:

  • Entities created as part of the Master Taxonomy inherit characteristics on the basis of taxonomy nodes (categories).
  • The taxonomy is useful for navigation, search and display in the system
  • May be used for Vendor Onboarding as well

It is also important to understand the difference between a merchandising hierarchy and end-customer facing ecommerce / marketplace hierarchies as well as reporting hierarchies. An entity existing in one category under a merchandising hierarchy may exist in multiple categories in ecommerce hierarchy for the sole reason of website display. There have been use cases where reporting hierarchies are different than merchandising hierarchy because of the organizational structure in the enterprise.

Some key considerations to keep in mind while developing the master taxonomy for your Master Data Management initiative.

  • The Master Taxonomy should have a one-to-one mapping to every entity created in MDM
  • The Master Taxonomy should support and ease the entity creation and maintenance for the organization. Hence this is the taxonomy which should have category specific attributes mapped to relevant category levels
  • The Master Taxonomy should be content rich to support all the different types of entities created in the enterprise
  • The Master Taxonomy should be as static as possible. Since the content / category specific attributes are driven off from this taxonomy, changes here will impact on the overall data quality
  • Once an Item is assigned a Master Taxonomy category, this category should also be fairly static. Only reason why this would change is when the current category is split into more granular set of child categories. E.g. cameras is split into point and shoot, SLR, etc.
  • Using mind mapping tools such as Lucid Chart for solution workshops works great when trying to redefine the master taxonomy for the organization. A good practice is also to have the taxonomies of either competitors or standard taxonomies like GDSN as examples to help understand and define the taxonomy further.

Some key considerations for Alternate Hierarchies/taxonomies

  • To be most effective and easy to maintain, these taxonomies should not be content-rich, but just exist as mappings to the Master Taxonomy
  • E.g. if an entity belongs to multiple ecommerce categories for website display it can’t inherit different attributes from multiple parents in the Ecommerce Taxonomy.

At Riversand, we understand why defining and maintaining taxonomies as part of the MDM application is so important for the success of the initiative as well why it is important to support multiple taxonomies for different business functions. As part of Riversand MDMCenter we have a very powerful taxonomy management module which helps our customers maintain not only the master taxonomy but even their reporting, ecommerce, legacy taxonomies along with associated characteristics and even mappings between these taxonomy structures.MDM Solutions