Data is a key strategic element for digital transformation. Only on the basis of high-quality and complete master data companies are able to make solid decisions, optimize processes and productivity, drive automation and generate added value. Low data quality, on the other hand, leads to inefficient processes and costly delays in operations.


Master data management as a permanent, strategic task

In view of the numerous benefits associated with high data quality, efficient data management is an important strategic task in many areas of a company. It is essential to create the conditions for ensuring the desired data quality on a permanent basis so that companies can become data-driven organizations.


An up-to-date and high-quality data inventory is not a one-time effort, but a permanent task. To achieve this, it is necessary to establish appropriate processes for capturing and maintaining master data in the company and to engage the departments involved right from the start. SAP Master Data Governance (MDG) is a powerful tool for creating, maintaining and distributing master data, creates the conditions for central, uniform master data management and makes the data available to the connected target systems. With SAP MDG, companies can establish central ownership of all master data according to their own business rules and processes.


There are standardized process flows and approval procedures for creating and changing data. The control process, including authorizations and quality checks, can be flexibly customized to customer needs in the form of various workflows. This enables companies to control the entire lifecycle of their master data.


Three components

SAP Master Data Governance comprises three core functionalities: Consolidation & Mass Processing, Central Governance and Data Quality Management. Consolidation & Mass Processing is used to transfer data to the central master data system. Mass changes can also be made in SAP MDG. Central Governance provides classic process-based master data maintenance workflows to create and change master data. Validation rules and the distribution of master data to connected systems are also part of this context. With Data Quality Management, companies can define data quality rules and store KPIs to perform quality analyses and thus permanently monitor data quality.


Deployment: On-Premise or as Private Cloud Edition

SAP Master Data Governance is available as an on-premise version and as a Private Cloud Edition. With SAP MDG on-premise, maintenance fees must be calculated in addition to acquisition and operating costs. The company must carry out software updates independently. SAP MDG on-premise is installed either on the same server as SAP ERP or SAP S/4HANA (co-deployment) or separately on its own server (hub deployment).


SAP MDG Private Cloud Edition (PCE) combines advantages from the on-premise world and the cloud. In terms of topology and functionalities, there are no differences to SAP MDG on-premise. Companies can therefore use the full scope of SAP MDG in the private cloud. At the same time, they benefit from the general strengths of cloud computing: they no longer have to worry about operating and maintaining software and hardware, and they achieve higher availability and greater flexibility. The licenses for SAP MDG are included in the subscription fee and do not have to be purchased additionally.


Stopover on the way to SAP S/4HANA

For many SAP ERP customers, the introduction of SAP Master Data Governance can be a useful intermediate step on the way to the new SAP S/4HANA system. It is understandable that the data quality of older ERP systems no longer meets today’s requirements and standards needed for a smooth migration to SAP S/4HANA, due to their usage periods of 15 to 20 years. Data Quality Management in SAP MDG uncovers errors and optimization potential in master data, so companies can use data cleansing to prepare their master data for the switch to SAP S/4HANA. They increase their data quality and establish stable governance processes, which in the long term mean that the high master data quality is maintained even after SAP S/4HANA migration.


What role does the public cloud play?

As in many other IT areas, companies increasingly expect to be able to obtain master data management as a service via the (public) cloud. However, according to current estimates, SAP MDG is so extensive that it will not be fully available in the public cloud in the short or medium term. Instead, hybrid approaches that combine the different deployment options will dominate. Against this background, SAP MDG Public Cloud Edition as a pure software-as-a-service solution should be seen as a supplement to the on-premise version in the medium term. SAP is not currently aiming for a complete replacement of SAP MDG on-premise with the Public Cloud Edition.


Well equipped for the future

The future SAP MDG portfolio offers companies various options with which they can place their master data management on a broad basis and design it flexibly. If companies implement SAP Master Data Governance as an on-premise version or in the Private Cloud Edition, they create a central system for the company-wide maintenance of master data and are ideally positioned for future challenges. Consequently, they can relax and watch how the master data approach with SAP MDG Public Cloud Edition as a complementary deployment option will prove itself in the coming years and which concepts will prevail as future solutions for master data management.


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