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10 minute read

What Is Reference Data Management?

What Is Reference Data Management?

What Is Reference Data Management?

Reference data management is an essential component of data management. It allows organisations to maintain data accuracy and consistency across data sets. It helps organisations comply with regulations and reduce compliance risks.

This article discusses the purpose of reference data management. It also explores its key features, collaborative efficiencies, and the benefits it can provide.

Key Takeaways

  • Legacy solutions lack important features such as change management, audit controls, and granular security/permissions.
  • Errors in reference data can hurt business operations.
  • Mismatches in reference data can affect data quality, BI reports, and application integration.
  • Reference Data Management (RDM) solutions such as Tempo provide tailored configurations and ongoing support, helping organisations comply with regulations and mitigate compliance risks.

What Is Reference Data Management

Reference data management is the process of collecting, organising, and managing reference data used across multiple systems and applications. It provides a centralised control, ensuring consistency, compliance, scalability, and quick reaction to new data requirements.

It also helps organisations meet regulatory requirements, maintain data integrity, and improve operational efficiency. RDM solutions must have an extensible data model, user-friendly interface, and robust architecture to ensure its effectiveness.

Lastly, governance processes, metadata management, and integration with other solutions are necessary for end-to-end lifecycle management.

Why is Reference Data Management Important

A well-managed system for organising and maintaining information is paramount for businesses of all sizes. Reference Data Management (RDM) provides many benefits, such as:

  • Legacy solutions: Change management, audit controls, granular security/permissions
  • Compliance: Regulations, compliance risks, consistency
  • Connectivity: Access, distribution, updates
  • Lifecycle: Governance, metadata, data protection
  • External data: Standard practices, accuracy, reliability.

These advantages enable organisations to scale operations, improve data quality, and ensure compliance.

Reference Entity Profile

Entity profiles are an important component of RDM for providing accurate and up-to-date organisational information. They provide a comprehensive overview of an entity's characteristics, such as its classification, key contacts, and ownership structure.

Reference data management systems can store such information and support the process of maintaining profiles over time. Entity profiles allow organisations to keep track of changes in an entity's structure, and to ensure that reference data is uniform and consistent.

They are also used to generate reports and dashboards for better decision-making and to identify potential risks.

Key Features

Key features of reference data management systems include:

  • The ability to store organisational information
  • The ability to maintain profiles over time
  • The ability to generate reports and dashboards
  • The ability to identify potential risks

Reference data management systems offer:

Connectivity & Integration:

  • Multiple flexible means of connection
  • Import & export of data
  • Role-based security
  • Versioning

Lifecycle Management:

  • Governance UI & workflow
  • Metadata management
  • End-to-end data management

Evaluation Criteria:

  • Types of data
  • Extensible data model
  • User-friendly interface
  • Robust architecture & performance

Attribute Analysis

Attribute analysis is a process used to assess the characteristics of reference data to determine its accuracy, completeness, and relevance. This includes identifying and analysing data attributes, assessing data quality, and verifying information accuracy.

Data attributes can include values, data types, formats, and structures. Quality assurance is used to check data accuracy, integrity, and consistency. Data verification ensures data meets specified criteria and is up-to-date.

Importing Reference Data

Importing reference data is critical for organisations to ensure data accuracy and consistency. It involves bringing in data from external sources and integrating it with internal data.

Organisations must have flexible connectivity options, user-friendly interfaces, and robust architecture to ensure successful importation. Proper governance and collaboration are also needed to ensure accuracy and consistency of reference data.

Organisations must have policies in place to ensure compliance with data governance standards.

Assigning Accountabilities

Accountabilities must be assigned to manage reference data to ensure compliance with data governance standards.

Reference data governance should involve SMEs for creating and maintaining data standards, regular reviews and updates, and departments held accountable for their internal reference data.

Collaboration is key, with all applications and users having access to current and synchronised data.

Benefits include faster turnaround time, reduced operational risk, improved regulatory compliance, and increased business resource optimisation.

Approach to Effective Management

Managing external data is another important aspect of effective management. It involves standard practices and improves data quality.

Governing reference data is also crucial. Subject matter experts should do this and regularly review to ensure accuracy and consistency.

Promoting collaboration is essential for effective management. It facilitates data sharing and enhances decision-making processes.

Realising the benefits of reference data management is the ultimate goal. These benefits include faster turnaround and reduced operational risk.

Governing Reference Data

Subject matter experts should govern reference data by creating and maintaining data standards. Regular reviews and updates are essential for accuracy and consistency.

Organisations should hold departments accountable for their internal reference data and ensure compliance with data governance policies. Collaboration and data sharing should be promoted to enhance operational efficiency and effectiveness.

Governance of reference data provides benefits such as improved regulatory compliance, enhanced operational metrics and performance monitoring, and faster turnaround times.

Benefits

Implementation of governing policies and centralised data management can provide numerous benefits. These include faster turnaround time in obtaining error-free data, reduced operational risk, improved regulatory compliance, enhanced operational metrics, and increased business resource optimisation.

These benefits can be realised through improved data quality and reliability, seamless data integration, and better department collaboration. Additionally, reference data management facilitates policy enforcement and decision-making processes, allowing for more informed and timely decisions.

Improved Data Governance

Implementing improved data governance policies can help ensure the accuracy and consistency of reference data across applications and users.

Reference data should be governed by subject matter experts (SMEs) who are responsible for creating and maintaining data standards, regularly reviewing and updating the data, and ensuring compliance with data governance policies.

Collaboration is also essential, as all applications and users should have current and synchronised data.

Benefits of improved data governance include reduced operational risk through centralised data management, improved regulatory compliance and policy enforcement, and enhanced operational metrics and performance monitoring.

Quicker Turnarounds

Organisations can experience quicker turnarounds in obtaining error-free data by utilising reference data management solutions. Such solutions enable access, distribution, and updates of reference data across systems, facilitating quick reaction to new data requirements or market changes.

Centralised control ensures consistency and compliance, while user-friendly interfaces and flexible data models enable easy installation and configuration. Hierarchy management of reference code tables and values allows scalability of operations and analytics processes.

Reduced operational risk and improved regulatory compliance further enhance the benefits of reference data management.

Minimised Operational Risks

Utilising reference data management solutions can minimise operational risks. These solutions provide tailored configurations and ongoing support to ensure consistency and compliance. They enable quick access, distribution, and updates of reference data across systems while also allowing operations and analytics processes scalability.

Additionally, reference data management solutions provide robust architecture and performance, user-friendly interfaces, and support for import/export of data in multiple formats.

Enhanced Regulatory Compliance

Implementing reference data management solutions can enhance regulatory compliance. By centralising control and enforcing granular security permissions, organisations can reduce compliance risks and maintain compliance with regulations.

Data governance policies can be enforced, and regular reviews and updates of reference data can ensure accuracy and consistency.

These systems can also facilitate seamless integration and data sharing, allowing organisations to reduce operational risks and improve decision-making processes.

Collaborative Efficiencies

Centralising reference data management can facilitate collaboration and synchronisation of data across applications and users, thereby enhancing cross-functional efficiency. It enables users to access and share information quickly and accurately while providing a framework for governing and maintaining data quality.

Reference data can be managed in a secure, centralised environment, ensuring data consistency and regulatory compliance. Benefits include improved operational metrics, enhanced decision-making processes, and reduced operational risk.

Reference Data Management Evaluation

Reference data management evaluation involves assessing the ability of a system to manage various types of data. This includes evaluating its extensibility, user-friendliness, performance, security, and connectivity.

Additionally, the end-to-end lifecycle management capabilities of the system should be evaluated for compliance, scalability, and collaboration. This assessment ensures that organisations are able to manage their data effectively and efficiently.

Tempo Reference Data Management Solutions

In the rapidly evolving world of data-driven businesses, keeping reference data up-to-date and governed effectively is pivotal. Tempo, a pioneering creation by Clear Strategy, is at the forefront of this transformation.

A Game Changer in Real-time Updates: 

In the age of immediacy, delays and outdated information can pose serious setbacks. Tempo ensures that reference data remains fresh and up-to-the-minute. By supporting real-time updates, Tempo stands out as an indispensable tool for enterprises striving to maintain pace in the digital age.

Effective Governance Ensures Integrity:

Beyond speed, the accuracy and reliability of data is paramount. Tempo comes equipped with robust governance protocols, ensuring that your reference data remains consistent, valid, and trustworthy. This reduces errors and builds a foundation of reliability within your data platform.

Purpose-built for Comprehensive Management: 

Its meticulous design, tailored exclusively for managing Enterprise Reference Data, sets Tempo apart. Whether it's for streamlining operations, regulatory compliance, or enhancing analytics, reference data is a lynchpin. With its intuitive features, Tempo seamlessly integrates into your data platform, becoming a cornerstone for efficient data management.

Categorisation and Structuring Made Easy: 

Diverse business operations often require a vast array of categorised data groups. Tempo shines in its ability to categorise and structure various data types into essential groups effortlessly. Be it Customer Segments, Product Codes, Financial Hierarchies, or Country Codes, Tempo ensures organised and easily accessible reference data at all times.

In a nutshell, Tempo by Clear Strategy isn't just another addition to the world of Reference Data Management – it's a paradigm shift. Embrace the future of data management with Tempo, where real-time updates meet impeccable governance.

Benefits of Reference Data Management

The implementation of reference data management can provide numerous advantages to an organisation. These include:

  • Faster turnaround time and improved accuracy in obtaining error-free data
  • Reduced operational risk
  • Enhanced regulatory compliance and policy enforcement
  • Improved operational metrics and performance monitoring
  • Increased business resource optimisation and efficiency

Reference data management also facilitates:

  • Seamless integration and data sharing
  • Enabling organisations to collaborate and make informed decisions.

Frequently Asked Questions

What Is the Best Way to Ensure Accuracy and Consistency of Reference Data?

The best way to ensure the accuracy and consistency of reference data is to use standard practices to discover, profile, and understand it, keep it up to date, and regularly review and update it. Additionally, assigning subject matter experts (SMEs) to govern and hold departments accountable is essential.

How Can Reference Data Management Help Organizations Comply With Regulations?

Reference Data Management (RDM) can help organisations comply with regulations by providing tailored configurations and ongoing support, allowing operations and analytics processes to scalability, facilitating quick reaction to new data requirements, and ensuring semantic consistency.

What Are the Key Criteria to Consider When Evaluating Reference Data Management Solutions?

The key criteria to consider when evaluating reference data management solutions include the ability to manage various types of reference data, extensibility, user-friendliness, connectivity and integration, and end-to-end lifecycle management.

What Is the Role of Collaboration in Reference Data Management?

Collaboration is essential for reference data management, enabling users to share and synchronise data across applications and departments. This facilitates data standardisation, data quality, improved decision-making, and operational efficiency.

Conclusion

Reference data management is a critical component that enables organisations to maintain accuracy and consistency across data sets. It helps ensure compliance with regulations, reduce compliance risks, and enable faster and error-free data turnaround times.

Reference data management involves establishing a central reference data unit, managing external data, governing reference data, and collaborating. The key features of reference data management include attribute analysis and collaborative efficiencies.

Organisations can benefit from improved regulatory compliance, reduced operational risk, and increased business resource optimisation. Reference data management solutions such as Tempo can also help organisations maximise the benefits of reference data management.

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What Is Reference Data Management?
David Fitzpatrick
Director
David, the founder of Clear Strategy, is a leading business and technology professional with over 20 years' experience in Data and Analytics.
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