SAP Master Data Governance

Master data management (MDM) is how enterprises deal with business context data such as customers, products, assets and locations. This data spans multiple corporate applications, with many different systems usually holding information about core business entities like customers and products. MDM is a discipline focused on creating and maintaining a unified, trusted source of core business-critical data. Data governance is the set of business policies, processes and roles that support this, such as data quality standards and stewardship. The software industry has offered specialist solutions that help companies manage this kind of data for over two decades, and SAP Master Data Governance (SAP MDG) is the software that SAP offers to handle this master data. It supports the creation, validation, and distribution of master data based on business rules, including the identification of duplicate records and the consolidation of these into a single, trusted source. SAP MDG includes full data quality functionality such as data cleansing, validation, and ongoing data quality monitoring.

Customer Quotes

“SAP Master Data Governance lets us govern specific data attributes. We can enforce compliance rules in a way that ensures a clear picture of our enterprise data across business areas and systems.”

Christine Justice, Senior Director Master Data Enterprise, Fleet and Logistics, Evoqua Water Technologie

“The consistent centralized data model across our organization allows us to replicate data to downstream systems in minutes. In fact, we can now replicate a full data set in just seven minutes. It used to take between five and seven days.”

Markus Buschky, Head of Customer Care and Financial Core – Director (SVP) Corporate IT, Deutsche Börse Group

SAP MDG can be deployed either on-premises or in both private and public clouds. It can be integrated within the broader SAP S/4HANA suite or deployed as a stand-alone hub. Unusually amongst MDM products, there is the capacity to deploy the product in a federated fashion. Most MDM products are deployed centrally, providing a single hub for storing master data. This works fine in many cases, especially when the customer itself has a centralized culture. However, many large global enterprises are quite decentralized, with a central core organization but with many decisions devolved to operating units, often spread across the world. Each decentralized operating unit may have substantial autonomy, for example having the ability to create localized products aimed at a specific market. In such organizations it makes sense to manage the master data locally, where it is best understood, with only some core attributes stored centrally. For example, a multi-national company may have a core set of global brands, but with each region or country free to develop unique brands targeted at specific countries or market segments, or handle local regulatory requirements. SAP MDG allows a federated deployment, whereby multiple MDM hubs are deployed as needed to local businesses or operating units. A central, corporate MDM hub is connected (and synchronized) with multiple distributed hubs, with only a subset of master data controlled centrally in such cases. This deployment option is rare in the industry and gives a genuine competitive advantage over other MDM products, where this deployment style makes more sense than a centralized, one-size-fits-all all model.

Another specific example that SAP MDG can handle well is business partner hierarchies. These hierarchies can be imported, validated and then a legal entity hierarchy can be derived and managed centrally. This can be replicated and distributed in a controlled manner to downstream systems. SAP has a partnership with Swiss data provider “Corporate Data Quality” (CDQ), which uses more than seventy different sources of data to help to validate and automatically enrich to produce a trusted corporate record.

SAP MDG makes use of generative AI to allow a “summary of changes”, a natural language explanation of upcoming master data changes (aimed at non-technical users). Its “assisted change” feature allows users to change master data attributes via natural language prompts. Customers can choose which LLM model to e.g. ChatGPT or Claude etc for prompt execution. Natural language prompts can also be used to query to get details on business partner data (via SAP Joule, an AI co-pilot).  Business users can initiate master data creation or changes from their current work context (within the SAP S/4HANA business suite / applications).

While some global companies are highly centralized, many are not, allowing local regions or business units a high level of autonomy in terms of data governance rules and policies. This is particularly the case where products need to be tailored to the needs of specific local markets and tastes. In such situations, most MDM software products only offer a centralized hub approach, which may not suit the culture of the company and the need for it to maintain localized product lines, for example. This capability is something that has long been neglected by the MDM industry, and the SAP MDG ability to be deployed in a federated manner gives a distinct advantage compared to other MDM tools that do not have this capability.

The bottom line

The SAP Master Data Governance software is a full-function master data management suite that is well suited to address the needs of handling master data across a complex enterprise. It will particularly appeal to companies that have already committed to the SAP Business suite, though it is also able to handle non-SAP data. Its ability to be deployed in a federated fashion is rare in the industry and gives it a competitive advantage in companies where that approach is suitable.