- How to Perform Blockchain Master Data Management?
We hope you enjoy reading this article.
If you want our expert developers and designers to work on your online product, click here
Latest posts by Aran Davies (see all)
- How to Create an iOS Video Streaming App - 23 Mar, 2023
- How to Build a Patient Management Software Application - 23 Mar, 2023
- How to Build a Dental Practice Management Software - 16 Mar, 2023
Interested in how you can take master data management to the next level with blockchain technology?
This is a very interesting topic that we will cover here.
Why should blockchain matter vis-à-vis Master Data Management(MDM)?
Why would you consider blockchain as a solution to MDM implementation challenges? Before I answer this question, let‘s quickly understand what blockchain is. This promising technology has the following features:
- It‘s a decentralized, peer-to-peer (P2P) network, and anyone can join a public blockchain network whereas private blockchains allow only trusted parties to join.
- Computers on this network are called ’nodes‘, and each node has a complete transaction history. Since each node is a complete ledger, blockchain is often referred to as the “Distributed Ledger Technology” (DLT). A cybercriminal can‘t shut this network down by taking over one computer.
- Blockchain networks use digital signatures, data encryption, cryptographic hash functions, and consensus algorithms to protect the integrity of data.
- Data and transactions are transparent, and the audit trail is immutable.
- Starting with Ethereum, blockchain technology offers smart contracts. These are transparent, tamper-proof pieces of code that execute autonomously, and their execution is irreversible.
Given these characteristics, blockchain can improve security, transparency, and efficiency, as I have explained in “How to build your own blockchain using Node.js”. In the context of MDM, the security and transparency offered by blockchain can help.
How blockchain can help to implement Master Data Management Program?
There are various ways in which blockchain improves MDM, e.g.:
1. Decentralization of blockchain can improve enterprise data management
I have written about how organizations collect, store, and process crucial enterprise data in multiple systems like CRM, ERP, etc. This often poses challenges to MDM implementation since we typically view MDM from a centralized paradigm.
However, it‘s an inescapable reality in large enterprises that data collection and storing of it will happen at multiple touchpoints. Given that, MDM should also adopt decentralization since that mirrors the enterprise reality.
Blockchain with its decentralization can accelerate this shift where individual business functions will act as nodes. When they collect data, the blockchain protocol can ensure that master data is available on all nodes. You can read more about blockchain-powered decentralized MDM in “Blockchain – new dimensions to master data management”.
Hire expert developers for your next project
2. Blockchain can help in reconciling data in an MDM solution
A robust MDM solution must enable enterprises to reconcile master data effectively. It‘s hard to achieve though, due to the following reasons:
- The MDM solution needs automated controls for multi-point reconciliation.
- You must deploy these tools across multiple sources of data, and these automated tools would then feed your MDM system.
- These tools will need to produce dynamic data reconciliation reports, subsequently, the subject matter experts and the MDM architects in your team need to review these reports.
- Reconciliation exercises including the required adjustments follow.
You can read about this in “Master data management (MDM): easier said than done”.
Blockchain with its distributed ledger and consensus algorithms can help significantly with data reconciliation. As I have explained above, you need to design the blockchain MDM solution such that your diverse source systems are nodes on the decentralized network.
Subsequently, the consensus algorithms in the blockchain protocol take over. Consensus algorithms work towards maintaining data integrity, and by their very design, they maintain the same data across all nodes on the blockchain network.
This saves a significant amount of time and effort, as you can read in “Master data belongs on the blockchain”.
3. Blockchain can improve your confidence in your master data
As a business leader in your enterprise, a key concern for you is whether your master data has been corrupted. This is one area where a blockchain-powered MDM solution can help significantly, due to the following reasons:
- Users in a blockchain network must transact using their digital signatures, and these are very hard to compromise.
- Data encryption, cryptographic hash functions, and consensus algorithms make it hard for hackers to tamper with the data.
- You will likely use an enterprise blockchain framework like Hyperledger Fabric to power your MDM solution, and such blockchain networks allow only trusted parties to join.
- Enterprise blockchain frameworks like Fabric also provide advanced security solutions, and an example is its Hardware Security Model (HSM) to secure digital signatures. You can read more about this in “Pros and cons of Hyperledger Fabric for blockchain networks”.
No technology is fully immune to hacking, however, blockchain does a great job of dissuading cybercriminals by raising the costs of attacks significantly.
You can read “Can blockchain technology be hacked?” to learn how blockchain provides a high degree of security against cyber-attackers.
4. Improved transparency in an MDM system, thanks to blockchain!
The transparency of data collection, enrichment, etc. is a key requirement of any robust MDM solution. However, silos and multiple movements of data from one system to another in an enterprise make it hard to maintain an audit trail.
A blockchain-powered MDM solution, with its distributed ledger and immutability of transactions, can provide audit trails for every MDM operation. According to experts, this is a key advantage since it improves the confidence of the stakeholders in the system.
5. Blockchain can improve the efficiency of a Master Data Management solution and reduce costs
The distributed ledger of blockchain can make it easier to share master data among stakeholders. Since blockchain is a decentralized network, server management costs reduce, and this is another advantage of using blockchain.
Hire expert developers for your next project
1,200 top developers
us since 2016
Important considerations for using blockchain to power a Master Data Management solution
Before you implement a blockchain-powered MDM solution, you need to consider several important factors, e.g.:
1. Blockchain bloat
Blockchain requires every node to store the entire transactional data history, therefore, as the network grows so does the volume of data in every node. While this built-in redundancy guards against hackers taking the network down by attacking one node, over time it also results in “blockchain bloat”.
As I write this, experts are working on several solutions to address this, e.g., sharding, ephemeral blockchains, and zero-knowledge proofs. You can read about them in “Can blockchain bloat ever be solved?”.
2. Planning a blockchain project
Planning a blockchain project requires significant expertise since you need to plan for several aspects. These could include which blockchain framework to use, which development tools to use, etc., and you can read about them in “What to plan for when undertaking blockchain software development?”.
3. Choosing the right blockchain network host
You would likely use an enterprise blockchain framework, therefore, you will need to choose a blockchain network host. There are several Blockchain-as-a-Service (BaaS) platforms, e.g., Blockchain on AWS, SAP Cloud Platform BaaS, Microsoft Azure BaaS, and IBM Blockchain Platform.
Our guide “Best blockchain network hosts 2012” can help you to choose one.
Planning to take your master data management programs to the next level with blockchain?
While blockchain can add significant value to your MDM solution for business processes, implementing a blockchain-powered MDM can be hard. MDM is a specialized technology, moreover, blockchain skills are niche. I recommend that you engage a reputed software development company for such a project.
Our guide “How to find the best software development company?” can help you to find one.
If you are still looking for expert blockchain developers, give DevTeam.Space a try by partnering with our experienced software developers trained in the latest technologies. Leave your initial blockchain development specifications through this form and one of our competent managers will contact you for further details.
Here are a few articles that might also interest you:
Best Game Design Document Template – DevTeam.Space
Hire expert developers for your next project
Do you want to explore the game design document template? In this article, we will discuss the same in detail. While most people consider making games to be all about game development, it always starts off with a game design document....Continue reading
Azure vs. AWS: Cloud Platform Comparison
Let's start this AWS vs. Azure comparrison by taking a quick look at how the two cloud providers explain their cloud service offerings: Microsoft Azure: Azure is a comprehensive set of cloud services that developers and IT professionals use...Continue reading
Artificial Intelligence in Stock Trading: Future Trends – DevTeam.Space
How to Use Artificial Intelligence for Trading
Angular 3: Release Date, Features and Changes – DevTeam.Space
Wondering about Angular 3: Release Date, Features and Changes? That’s an excellent market with many opportunities to be explored. Besides all the money, innovating in software is a chance to make a positive impact on people’s quality...Continue reading
Frequently Asked Questions on Master Data Management
Master data management or MDM allows business and software specialists to collaborate to ensure data accuracy, data quality, and proper data governance over the company or organization’s master data records such as customer data, product data, reference data, etc.
As a database technology, blockchain is ideal for master data management solutions like customer master data management, product master data management, etc. The real question is whether MDM is becoming an outdated approach in itself.
You can find expert blockchain developers on the DevTeam.Space platform. The company has substantial experience and expertise in developing blockchain solutions so is the ideal choice.