Managing Master Data with

Kalido

Master Data Management

A Technical Overview

White Paper
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Executive summary
Master data management (MDM) is a discipline that continues to gain momentum in organizations globally.
This is due to the need for accurate data used in both operational and analytical operations of the business.
Use cases where MDM is critical include data harmonization for analytics, data harmonization for operations,
hierarchy management for business intelligence (BI), operational data governance, systems migration and
consolidation, and enterprise-wide MDM.
To optimize and gain insight into corporate performance, companies make major investments in operational
systems to manage their business processes, and in analytical systems to analyze business transactions
in aggregate. The context for these processes and transactionsmaster dataincludes information about
products, customers, suppliers, regions, employees, charts of accounts, key performance indicators, brands
and more. Organizations could literally have hundreds of different types, or domains, of master data used to run
and manage the business.
Master data is often duplicated and managed in multiple systems. Poor master data used in operational
business processes can lead to unfavorable business operating results and performance. Poor master data in
business intelligence results in inaccurate views of corporate performance leading to millions of dollars in lost
sales and cost savings opportunities annually. These problems are most acute in enterprises which regularly
undergo mergers and acquisitions; which introduce, retire, buy and sell product lines; that open and close
locations; and that operate under different and changing regulatory environments across corporate divisions or
geographic regions. This can make it nearly impossible to gain consolidated views of enterprise performance.
The issue of managing master data is getting greater visibility due to pressure to increase corporate
transparency, data governance, accountability, and performance on an enterprise-wide basis.
This white paper describes implementing a master data management solution using Kalido Master Data
Management, an MDM application which is available standalone and as part of the Kalido Information Engine.
Kalido MDM is a workfow-driven, web-based application that enables business people to collaboratively defne,
consolidate, authorize, publish, and maintain master data. Once you have developed a repository of clean and
accurate master data, you can use that data to make business processes more consistent, and analytics more
accurate, and make it available to business users across your organization so they have access to the clean
information they need to do their jobs.
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Table of Contents
Master Data Management Overview 4
Master Data Management Challenges 6
Kalido Master Data Management Key Capabilities 7
What is Kalido Master Data Management 7
Kalido Master Data Management Architecture 13
Kalido Master Data Management Application 13
Kalido Master Data Management Users 14
Master Data Modeling 14
Integrating Kalido Master Data Management with a Data Warehouse 15
Managing Master Data in Operational Systems 15
Summary 16
About Kalido Master Data Management 17
About Kalido 17
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Master Data Management Overview
Master data (or reference data) represents a companys business vocabularythe business entities,
terminology, defnitions and classifcations used to describe business information. Master data provides the
context for recording transaction datafacts about events in the business.
Consider the following transaction:
Sales rep Laurie Murphy sold 100 8-foot cherry dining tables to Rochester Furniture on May 29 for $45,000 at
a proft of $15,000.
Data collected from this transaction description has many different uses:
Heres how this translates into a requirements breakdown by a business analyst:
The context for this transaction the master data includes who made the sale, what was sold, when it was
sold and to whom. For accuracy in the business process of collecting this order, it is important to get the
information about the product correct for inventory management reasons and accurate address information
for shipping reasons, etc. And, if you lack an accurate list of sales reps, products, time periods and customers
it is impossible to accurately analyze sales performance and proftability by customer, by product and by sales
territory.
This is a hierarchical representation as seen by an architect:
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Further, there are a number of other considerations related to the master data: what system or systems is
this data stored in? What business rule determines proft? How is this data used in other downstream systems
such as data warehouses, data marts and business intelligence tools?
Master data inconsistencies can cause other problems:
Operational silos where divisions within an enterprise have different nomenclature, defnitions and visibility
into the business. This results in misunderstandings, operational ineffciencies, weaker customer service,
channel confict and other margin- and agility-lowering effects
Inconsistent customer, supplier and product IDs across operational systems make it impossible to get a
single view of customer and supplier relations or product performance on a global basis
As a result, your organization could lose millions annually due to lost cross-sell and upsell opportunities to a
single customer, or repeatedly manufacturing and selling unproftable products. The real beneft of master data
management is better data to improve business outcomes.
50% of enterprises surveyed maintain master data separately in 11 or more source
systems
50% of enterprises surveyed consider master data management to be a high or top
priority
Over 80% of enterprises surveyed plan on centralizing master data management
Source: Tower Group
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Master Data Management Challenges
Managing enterprise master data is challenging. Consider the following scenario:
A global producer of consumer food products wants to analyze proftability trends over the last two years by
product, channel, customer, brand and region.
Challenge #1: Master data required for this analysis (products, customers) is duplicated in multiple operational
systems (CRM, ERP, etc.) that run independently in each region. It must be consolidated and inconsistencies
must be eliminated.
Challenge #2: Some of the master data is outside the scope of operational systemslists of brands and
channels are supplied by business users, or necessary information comes from third party external systems
not under your control. Extending operational systems to support this data enterprise-wide can be prohibitively
expensive or simply not possible due to the inherent restrictions in how some operational systems are
constructed or in how the external data is delivered.
Challenge #3: Defnitions for some master data exist in programming logic (such as spreadsheet functions and
data transformation routines) and are therefore inaccessible to users and systemsthis needs to be available
and controlled by business people.
Challenge #4: The accuracy of this companys proft analysis depends on associations between customers
and channels, channels and regions, products and brands, etc. being correct. Master data is inter-related and
hierarchical; referential integrity must be validated.
Challenge #5: Business users must be integrated into the master data management processthey are best
equipped to reconcile data inconsistencies, contribute missing data, ensure the validity of the data, authorize its
use and maintain its validity throughout its lifecycle.
Challenge #6: Analyzing historic trends is diffcultcustomers merge, products are discontinued, etc., but the
operational systems from which master data is sourced refect the present. Historic master data views must be
maintained to support trend analysis and audits.
Challenge #7: Different views of master data must co-exist to support different business functions. A solution
must capture and map between the different master data views.
Customer Success Story
A consumer packaged goods company is managing hundreds of thousands of customer,
supplier, fnancial, product and other master data items in Kalido MDM. Business data
experts at the head offce author and defne central views of the data (including business
defnitions), and co-workers in other countries map their domestic views of the data into
Kalido MDM to facilitate BI reporting and information exchange across divisions. The
information is accessible to employees via a corporate intranet to help everyone gain
greater visibility into the business.
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Challenge #8: Once master data is prepared, it must be transferable, in whole or in part, to support the
organizations necessary business processes. These processes can include facilitating business analyses
via a data warehouse and in transaction systems for greater operational consistency across all facets of the
business: supply chain, fnancial, human resources, customer relationship management and others.
Challenge #9: Master data is as important to people as to systemsit should be accessible throughout
the enterprise to increase corporate transparency and help everyone understand far-reaching customer
relationship implications and market presence of brands, etc. for effcient operational execution and reporting.
Based on common scenarios and challenges like those above, Global 2000 companies are discovering that an
ideal master data management solution must deliver the following capabilities:
Manage all types/domains of master data
Ensure relationships between master data domains can be created and managed
Provide environment for central authoring and managing custom master data domains and entities
Manage master data through its life stages and all validation processes
Match and harmonize incoming master data from multiple sources
Model and maintain simple and complex hierarchies for reporting and analysis
Provide a simple interface for business users to use clean master data
Automate and drive the data stewardship process when people need to make decisions
Handle changes in structure with changing requirements, keeping an historical record
Provide a secure environment with an audit trail for the full lifecycle of data
Kalido MDM meets these requirements, enabling companies to create a central master data repository where
business and technical users collaboratively control, enrich and authorize master data to ensure consistency
and semantic validity.
Kalido Master Data Management Key Capabilities
What is Kalido Master Data Management?
Kalido Master Data Management (MDM) is an agile software application for harmonizing, storing, managing
and governing master data over time. It increases the consistency and accuracy of business processes and
corporate performance reporting by enabling business people to collaboratively manage, author and control
master data in a workfow-driven environment. It produces a master data repository from which golden copy
master data can be distributed to enterprise applications and business people throughout the organization.
Customer Success Story
An international brewing company increased business transparency and operational
effciency across its brand companies by publishing 3,000 business policy and metric
defnitions, along with customer, product and market master data to employees via
Kalido MDM.
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Kalido Master Data Managements unique capabilities include:
Multiple MDM Domain Support
A large enterprise typically has hundreds of master
data categories and Kalido MDM can manage all of
themfrom products, customers, brands, markets
and territories to suppliers, fnancial data, key
performance indicators and more. Therefore, a key
objective which customers have come to expect
when evaluating MDM tools is to manage all types/
domains of master data. Many competing MDM
solutions excel at managing a single domain, such
as customer or product, but struggle to handle other
domains. This is often due to the hard-coded nature
of those tools data model. Kalidos generic data
model means there is no inherent bias to overcome when supporting the many different master data types
needed to drive better information in business processes.
Benefts:
A fexible model allows a business to grow without code or software boundaries preventing change, while
maintaining a full audit trail of events and history
A single tool can be used for all master data types
Consistency as domains are added
Easier for IT to support and maintain, instead of different tools used for each different domain
Sophisticated Modeling
As master data domains are added to an MDM
repository, the number and complexity of relationships
between the data grow exponentially. A key objective is
to ensure relationships between master data domains
can be created and managed. Kalido supports complex
modeling concepts such as supertyping and subtyping
which makes it possible to support inheritance of
attributes of a supertype among its subtypes. Kalidos
business information model allows IT and business
users to defne and manage the business rules and
validation rules to ensure that master data is ft for use
in the business processes it supports. Additionally, the
model is easily accessible, and understandable, by
both IT and non-technical business users.
Benefts:
Easily handles the many complex data relationships and entities
Common understanding between IT and line of business end users
Manage all master data domains from day one.
Ensure relationships between master data domains can
be created and managed
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Data Authoring
Unfortunately, not all data that is required for some business
processes can be authored in an operational system.
Additionally, it is often desirable to provide a central place
to author new master data new customer records, new
products, etc. and distribute it to operational systems,
especially in a heterogeneous systems landscape with
different felds for each piece of master data used across
systems. The objective of data authoring is to provide an
environment for managing custom master data domains and
entities. Kalido offers a model-driven, automatically generated
user interface for authoring data. Instead of custom screen
coding and development, Kalido MDM populates screens
based on the context of the task, and validation of authored
data is driven by the model, so you can be sure that the new
master data elements match the requirements.
Benefts:
Enhanced data integrity when creating new master data records with data matching to ensure quality
Increased fexibility and fully exposed API
Support for user-specifc requirements
Data Matching
It would be ideal if master data was the same across
all your systems that run your business processes,
but unfortunately it is not. Master data comes from
multiple sources, some of which may not be internal
to your organization. Therefore a critical requirement
is to match and harmonize incoming master data
from multiple data sources. Kalido meets this need by
allowing customers to defne, test, save and execute
complex data matching and mapping rules without
writing any code. This capability allows you to match
different data values across multiple sources to the
central master data repository. The matching engine
in Kalido MDM accurately fnds matches between
attributes, even for incomplete or partial similarity.
Kalido offers an intuitive user interface for creating
and previewing match results so stewards can confrm in real time if the match rules are appropriate. Combined
with Kalido MDMs workfow approval with human and system decision thresholds, true matches are automated
and manual review is only required for potential matches. Additionally, Kalido can match any type of data, not
just name & address (which is often the case in other matching engines) and offers error-tolerant lookup.
Benefts:
Easily manage increasing master data volumes and complexity
Vastly reduced manual effort saves costs
Provide environment for managing custom master
data domains and entities
Match and harmonize incoming master data from
multiple sources
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Life Cycle Management
A piece of master data goes through many steps over time. The concept of life cycle management refers to
managing master data through its life stages and all validation processes. Kalido MDM provides a single
environment to author, load, match, validate, publish, change and archive master data. To accomplish this, and
still keep the business processes running, Kalido separates master data into work in progress (WIP) and
published contexts. If a piece of master data needs to change, that change is handled as WIP and only makes
it to published status once the change has been approved. Kalido also keeps a full audit trail for all changes, and
steps through the process, and manages all the human touch-point interaction through the various steps.
Benefts:
Single environment facilitates process, reduces tool integration needs
Business processes are insulated from disruption during change management
Separation of roles and responsibilities, ensuring accountability
Hierarchy Management
Managing hierarchies is a classic MDM use case. Typically hierarchies are managed
in a data warehouse as operational systems dont accommodate hierarchies, but
business users can also require many different views. The objective of this capability
is to model and maintain the range of simple to very complex hierarchies for reporting
and analysis, which will vary across an organization. Kalido MDM supports these
requirements, allowing local to global hierarchy mapping to enable departmental and
regional views and allowing the business to manage standard hierarchies as well as
very complex multi-level or ragged hierarchies.
Benefts:
Easily accommodates the most complex aggregations and hierarchies
Allows lines-of-business and subsidiaries to manage and analyze the business
to local needs
MDM Consumer Interface
One of the important facets of master data
management is engaging with your subject
matter experts who can help make and maintain
clean master data those who have the
context for how master data is used, and who
in turn need access to it to do their jobs. The
objective of the MDM consumer interface is to
provide a simple interface for business users
to use clean master data, and also play a role
in its stewardship. The Kalido MDM consumer
interface provides a web-based capability
to browse enterprise master data using the
business information model, intuitive hierarchy
Model and maintain simple and
complex hierarchies for reporting
and analysis
Provide a simple interface for business users to use clean
master data
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browsing, a web search result display for fnding customer records, product records, et al, and an ability to raise
a change request when they see something that needs to be updated.
Benefts:
Gives business users direct access to the most accurate information they need to do their jobs
Better engagement with MDM consumers in the stewardship process
Workfow
Workfow in MDM is perhaps the most important capability
in ensuring a smooth data stewardship process. Some MDM
tools dont support workfow, relying instead on the customer
to integrate the MDM tool with an existing workfow engine. In
addition to requiring on-site integration by the customer, this
adds unnecessary expense and adds a new point of failure
to an MDM implementation. Kalido MDM offers embedded
workfow to automate and drive and guide the data stewardship
process when people need to make decisions. Its fexible,
robust built-in workfow routes master data validation actions to
specifc users or groups for human resolution and approval. It is
event-driven and allows you to build fexible and comprehensive
state transition steps. While external workfow integration is
not required, sometimes it is desirable to include external
processing before moving to the next step in a workfow and
integration into operation systems for enrichment. Kalido
supports user exits via an API to external code modules
to support these complex workfows. Taken together, the
capabilities of Kalido MDM easily manage increasingly complex governance and stewardship processes for
delivering accurate and consistent master data to your business processes.
Benefts:
Automated data stewardship process saves time and effort
Focuses data stewards on only resolving exceptions
Worklists
Worklists in Kalido MDM are used in combination with workfow when you want to process a set of master data
subjects as a group. The subjects are validated, approved, authorized and published as a unit. This is used
extensively to process multiple subjects which gather information from various sources and must be complete
before publication. The worklist feature allows multiple subjects to move through an enrichment approval
process before becoming master data, instead of having to be handled and processed individually.
Benefts:
Working on multiple subjects as a group reduces processing time
Fewer workfow tasks required for handling like processes
Automate and drive the data stewardship process
when people need to make decisions
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Change Management
As your business and business processes evolve, so
will your master data. A key requirement is therefore to
handle changes in master data structure with changing
requirements, keeping an historical record for cases
where you need historical views. Because Kalido MDM
is model-driven, it can easily change design defnition
as your business evolves. It supports time-variant
capture and management of master data values by
category, and supports full logging of changes to not
only the model, but also to actual master data values.
Benefts:
Master data is always up to date with how the
business is run and managed
Reduced effort and cost to maintain timely data
Easily audit historical states for more informed
changes
Security & Audit
Security and audit are of course key requirements of any MDM implementation. For many use cases, a secure
environment with an audit trail is a critical capability, particularly for any regulatory or statutory compliance
use. Kalido supports role-based security, and the role can be assigned at any level in the data. Users can be
managed in LDAP and Active Directory. For data security, Kalido supports object and data-level security using
ACLs. For data values, Kalido keeps track of who changed the model and the data, and when it was changed, as
well as history tracking of prior master data values. With this capability, customers have a corporate memory of
master data as it was at any point in time.
Benefts:
Bullet-proof audit trail for compliance tracking
Recreate prior model and master data views for easy historical comparison analysis.
Handle changes in structure with changing requirements,
keeping an historical record
Time-variance is critically important to companies who need to recreate
historic views of master data to support trend analysis or audits.
Customer Success Story
A fnancial services company governs changes to fnancial master data such as chart of
account codes to ensure accurate statutory reporting and to increase visibility into data
lineage. Changes to fnancial master data are made by users within Kalido MDM (rather
than within their various fnancial systems), and via workfow, the information is passed
to others for review and is used to drive automatic updates in fnancial applications.
Central governance gets fast, accurate views of fnancial performance with less
manpower spent on consolidated reporting and without the cost and delay of
standardizing accounting nomenclature across the company.
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Kalido Master Data Management Architecture
The Kalido Master Data Management architecture consists of three layers:
The Data layer, where the data sources reside
The Application layer, where the Kalido Master Data Management application is installed and where tasks
are run
The Presentation layer, which includes the Web Server, J2EE container and the browser
Kalido Master Data Management Application
Kalido MDM comprises three layers:
MDM Consumer a Web application designed for all users who need reliable, up-to-date business
information to execute their tasks and projects. It provides read-only access to all published master data.
Consumers can easily raise change requests against the data and monitor the progress of the changes.
Kalido MDM the main Web application where models are defned and deployed and all in-progress master
data is stored. Two Contexts facilitate the rapid fow of large volumes of data from source systems through
publication to the wide consumer audience. The Contexts represent data that has been published and is
visible in the MDM Consumer (Master Context) and data that requires more work (Working Context).
Data Matching Module a fully integrated module that allows data managers to defne, test, save and
execute complex data matching and mapping rules. It complements MDMs workfow-driven data cleansing
system with powerful lookup technology that allows data stewards to overcome content errors and data
inconsistencies that impair data quality and slow down typical deployments
The Kalido MDM Technical Architecture
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Kalido Master Data Management Users
Kalido Master Data Management has three types of user:
Administrators Often IT workers, they defne master data models, security,
workfows, worklists, templates and the user interface.
Providers Business users who collaboratively control, edit, authorize and
publish master data within the context of models, workfows and worklists
created by an Administrator.
Consumers Business users who browse, search, and raise issues or
change requests on published master data to gain greater visibility into and
understanding of the business.
Master Data Modeling
Master data models defne master data structure, defnitions and relationships.
Models can be highly conceptual and communicate rich business meaning
(which is why master data can be readily browsed by Consumers).
Data can be rapidly loaded into the model from disparate IT systems, even if
the incoming data does not rigidly conform to the model. As the data becomes
conformant, it can be incrementally published to the Master Context where it is
immediately visible to all consumers.
Data that does conform to the model is loaded and published directly into the
Master Context
Models can be changed without reloading or reformatting published or in-
progress master data already stored in the master data repository. Users are
notifed of the number of subjects that will become invalid if the modifed model
is deployed. Upon deployment, invalid subjects are automatically brought back
into the Working Context to be enhanced until they are ready for re-publication.
Master data models
defne master data
structure, defnitions
and relationships.
Models can be highly
conceptual and
communicate rich
business meaning,
which is why master
data can be readily
browsed by
Consumers.
Kalido MDM Users and Roles
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Models can be created within Kalido MDM or they can be generated based on
models defned within an existing Kalido Information Engine structure, which
is in turn generated from a business model defned with Kalido Business
Information Modeler. The data model can be changed at any time. You can also
defne advanced data models directly via XML and the Kalido MDM Services
Application Programming Interface (API), which allows you to customize and
extend the Kalido MDM solution using .Net, JAVA, and Web Services.
Integrating Kalido Master Data Management with a Data Warehouse
The Kalido Information Engine includes a capability to build and operate
enterprise data warehouses. Driven by business models developed in Kalido
Business Information Modeler, it automates tasks such as data warehouse
schema design and generation, data loading, query defnition, data mart
generation and more. Thus data warehouses meet new business needs
iteratively in days or weeks, not months.
Kalido MDM can import model defnitions and data created in a Kalido data
warehouse, and export data back to it typically after the master data has been
authorized and published.
Kalido MDM helps assure consistent, accurate and trustworthy data is available
in the Kalido Information Engine for use in business intelligence applications.
For non-Kalido warehouses, Kalido MDM can be accessed in many ways to
fuel the analytical process through its API which is exposed as web services,
and directly from relational tables. Depending on the business requirement for
reporting and ad hoc analysis, master data in Kalido MDM can be mined and
supplied to meet any analytical questions. Kalido MDM can act as a central place
to manage and serve analytical requests for such things as multiple different
views on hierarchical roll ups or time-based MDM data reporting.
Managing Master Data in Operational Systems
In addition to supporting master data for downstream analytical uses, Kalido
MDM can be used to fuel upstream operational systems. With its robust
sophisticated modeling, it can handle multiple different business needs and
systems.
Once master data is accurate and consistent, Kalido MDM can export master
data in CSV, fxed format, or XML for batch update or entry into operational
systems. Kalido offers a Web services-based API that can be called in real-time
from or to operational systems for checking records against the golden copy
held in the Kalido MDM repository or to trickle feed a system with new authored
records of master data, also mentioned earlier in this paper.
A number of forms based tools such as MS InfoPath, Adobe LifeCycle, and BPM
tools are frequently used as part of this operational master data management
entry. To support this activity, Kalido MDM exposes real time matching
capabilities to aid in elevating duplicate entry into the operational system using
their internal Master Data as the golden standard for incoming records.
In addition to
supporting master
data for
downstream
analytical uses,
Kalido MDM can
be used to fuel
upstream
operational
systems.
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Summary
Kalido Master Data Management is a key data management component of
the Kalido Information Engine, and it uniquely enables business people to
collaboratively defne, consolidate, manage, authorize and publish master data
in a workfow-driven, web-based environment without needing to modify
operational IT systems.
The benefts of managing master data with Kalido MDM and distributing it to
enterprise data warehouses and employee information portals include:
Highly accurate and consistent business performance reporting
Greater visibility into the business for more effcient operations
The benefts are achieved through the unique capabilities of Kalido MDM, which
include:
Manages any type of master data a large enterprise typically has hundreds
of master data categories and Kalido MDM can manage all of them from
products and customers to brands, markets, territories and more
Allows business users easy access to published master data so they can raise
issues or change requests as necessary
Facilitates data governance puts business people in control of master data
quality in a collaborative, workfow-driven environment
Offers agile and fexible master data modeling featuring powerful cataloging,
segmenting, merging and mapping facilities
Loads non-conformant master data instead of rejecting invalid master data,
all master data is loaded even if it doesnt conform to the master data model.
Valid data is published directly to the Master Context while other data is sent to
the Working Context for further manipulation. Workfows ensure that the data,
or the model, is revised accordingly
Maintains master data history historic views can be recreated to support
audits and historical analysis as master data adapts to business changes over
time
Handles time-variance multiple date values are allowed over time
Allows publication of a set of data as a version preventing further editing by
users
Exchanges master data with other systems such as data warehouses, ERP
and other systems
Kalido MDM uniquely
enables business
people to
collaboratively defne,
consolidate, manage,
authorize and publish
master data in a
workfow-driven,
web-based
environment
without needing to
modify operational IT
systems.
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About Kalido Master Data Management
Kalido delivers the only business-centric MDM solution that supports data governance across the enterprise
With Kalido MDM, business users and decision makers can begin to trust their data and fnally unlock the real
value of the true intelligence within their systems. To accomplish this, Kalido MDM offers mid-market and large
enterprises the core capabilities to model, manage and govern master data. The result? Better data that feeds
business processes to lead to better business outcomes.
About Kalido
Kalido is the leading provider of business-driven data governance software. Kalido enables companies to manage
data as a shared enterprise asset by supporting the business process of data management. Kalido software
has been deployed at more than 300 locations in over 100 countries, including 20 percent of the worlds most
proftable companies as determined by Fortune Magazine. More information about Kalido can be found at: http://
www.kalido.com.
Contact Information
US Tel: +1 781 202 3200
Eur Tel: +44 (0)845 224 1236
Email: info@kalido.com
or visit our website at
www.kalido.com
WP-TMDM10114
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References to other companies and their products use trademarks owned by the respective companies and are for reference purpose only.