What is a key characteristic of master data?

Master data is defined as the critical data that is essential for the operations of an organization. A key characteristic of master data is that it remains relatively stable over time. This stability is crucial because master data provides a consistent and accurate reference point that organizations use across various processes, systems, and departments. For instance, customer information, product details, and supplier information are considered master data, and while they may undergo changes, such changes are usually infrequent compared to transactional data, which is generated on a day-to-day basis.

The stability of master data helps to ensure that business operations can function smoothly, as all stakeholders can rely on consistent information for decision-making, reporting, and analytics. In contrast, options that describe master data as frequently changing or subject to frequent updates do not align with its essence, as these attributes are more characteristic of transactional data, which is dynamic and changes constantly as business activities occur. Additionally, the assertion that master data is only relevant for transactional analysis overlooks its broader applications across various analytics, reporting, and management functions within an organization.

Overall, the relatively stable nature of master data is fundamental to maintaining data integrity and facilitating effective data governance in organizations.