What is the Difference Between Master Data and Transaction Data

The main difference between master data and transaction data is that the master data  is the data that represent people, places or things that are related to an organization whereas, the transaction data is the data used by the master data.

Data is important to every business organization. There are various categories of data; master data and transaction data are two of them. Both these data types have unique properties. Mater data is static data whereas transaction data is dynamic data. Managing master data and transaction data is important for modern, complex organizations.

Key Areas Covered

1. What is Master Data
     – Definition, Functionality
2. What is Transaction Data
     – Definition, Functionality
3. What is the Difference Between Master Data and Transaction Data
     – Comparison of Key Differences

Key Terms

Data, Master Data, Transaction Data

What is Master Data

Master data is the data that represents people, places or things that are related to the organization. For example, assume a scenario in which a customer buys a product from a store. This involves the data of the customer, product and employee. All this information is considered as master data.

Master data does not change – it is mostly consistent. A customer data is the same whether he checks out of the company online purchasing website or whether checking out from the cash register. It does not change.  

But, the master data can have consistency issues. When the customer purchases products from the store, he can use a loyalty card. When he purchases products online, he does not need to use the loyalty card. Therefore, even the customer is the same, he has two profiles. Thus, it might be difficult for the retailer to evaluate the customer.

What is Transaction Data

Transaction data is used by the master data. Assume the above scenario of purchasing a product. Data such as price, discount, and method of payment are considered as transitional data. Transaction data always changes. For example, the price of the purchased items can be $100 on one day and $200 on another day. In other words, the transaction data is highly volatile.

In transaction data, it is difficult to find the amount of data and to find ways to decentralize them. For example, there are many transactions happening daily. Even it is difficult, it is necessary to collect them in order to identify how the organization performs and to make future decisions. Therefore, different departments in the organization store and manage their own data. This can cause inconsistency in logic. 

Difference Between Master Data and Transaction Data

Definition

Master data represents the business objects that contain the most valuable, agreed upon information shared across an organization. Transaction data is the data that is periodically updated asynchronously over time as new information becomes available.

Basis

Master data is the data that represents people, places or things that are related to an organization. Transaction data is the data that is used by master data. Thus, this is the main difference between master data and transaction data.

Examples

Customer details, product details, employee details are some examples for master data. Price, discount, method of payment are some examples for transaction data.

Volatility

Master data does not change, so it is not volatile. Since transaction data changes frequently, it is highly volatile. Thus, this is an important difference between master data and transaction data.

Issues

Another difference between master data and transaction data is that the mater data can have issues related to consistency while the transaction data can have issues related to logic and quantity.

Conclusion

The basic difference between master data and transaction data is that the master data represent people, places or things that are related to an organization while the transaction data is the data used by master data.

Reference:

1. “Master Data.” Wikipedia, Wikimedia Foundation, 27 July 2018, Available here.
2. “Dynamic Data.” Wikipedia, Wikimedia Foundation, 2 May 2018, Available here.

Image Courtesy:

1. “2453751” (CC0) via Pixabay