Reference data vs Master data

How would you explain reference and master data to business folks, to developer folks? Sounds easy enough right? Is it?

Take a few minutes to actually think about it and see if you can make it easy enough for everyone to understand

Let us start with web definitions of the terms?

Master data represents the business objects that contain the most valuable, agreed upon information shared across an organization

Wikipedia

Reference data are data that define the set of permissible values to be used by other data fields. Reference data gain in value when they are widely re-used and widely referenced

Wikipedia

All right, but still a bit confused… More detail?

Master Data

• It provides context to the transaction
• Has same meaning across the organization
• May receive from multiple sources and so the data is cleansed, de-duplicated and governed.
• Critical for operational and analytical business decision making
• It usually includes below types of data

Reference Data

• It provides description/grouping to the transaction
• Defines permissible set of values for other data fields
• Data used to classify or categorize other data
• It usually includes below types of data

Test to identify master and reference data in the below sentence

John bought a gallon of milk priced at $3 from Costco. He paid with credit card and the payment was approved.