Hierarchy Management in MDM and PIM

Some of the Master Data Management (MDM), Product Information Management (PIM) and Data Quality Management (DQM) capabilities recently discussed on this blog was deduplication and master data survivorship approaches and workflow management.

Another of the many requirements you can indicate in the select your solution service is hierarchy management.

Hierarchy Management MDM PIM

Master Data Domains

Hierarchy management can be used in the different master data domains, namely:

  • Party master data, where we can have:
    • Companies as customers, suppliers and other business partner roles that are placed in a company family thee. Here you have to place your accounts in the hierarchy as a department, legal entity, national headquarter and global headquarter.
    • Individuals as business contacts at customers, suppliers and other business partners. Here you have to cope with, that an individual can have several roles stretching over several accounts.
    • Individuals as employees, contractors and customers. Private customers can be grouped in households and demographic stereotypes.
  • Location master data, where we can have:
    • External universal hierarchies as continents, countries, states/provinces, postal districts, streets, buildings and units in buildings.
    • Internal defined geographies as sales districts and organizational regions.
  • Product master data, where we can have:
    • External product classifications as UNSPSC, GPC, HS, eClass, ETIM and many more.
    • Internal product groups that may be enterprise wide or related to reporting, sales, purchase, production and more.

Applications in Play

Traditionally these hierarchies have been managed in ERP systems around specific use cases and the functionality offered by this application. The challenge in an MDM implementation is to lift the hierarchy management into the MDM platform and cover an enterprise wide view of hierarchies in use.

Where there are both an MDM application and a PIM application there has to be a distinction between which product data hierarchies that are governed in MDM and which product hierarchies that are governed in PIM.

Handling the lists that make up the hierarchy structure may also be done in a separate Reference Data Management (RDM) solution.

Using graph technology

Picturing master data entities in a strict hierarchy where one must be above another is not always optimal in describing how the real-world looks like. Therefore, some MDM solutions also have graph technology applied.

Graph technology can enforce solutions to classic MDM and PIM challenges as:

  • Providing multiple versions of the truth
  • Handling complex relations between the different master data domains
  • Engaging business users in consuming master data


Hierarchy management is an essential capability in MDM and PIM platforms as it can foster a holistic view on customers, suppliers and other parties, locations, products and other master data entities across the enterprise and within the business ecosystem where the enterprise operate.

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