Data is of immense importance for organizations, after all, the majority of strategic company decisions are made on the basis of data. Nowadays, however, vast amounts of internal and external data are generated every day. This ever-increasing flood of data and different data formats pose enormous challenges for companies. This is where master data management with SAP comes into play. The SAP Master Data Governance (MDG) solution supports those responsible in the company in the central maintenance, administration and distribution of master data.

What is SAP MDG?

Master data in companies is extremely diverse: For example, it can contain products, materials, cost centers or information about business partners, customers or suppliers. For easy management and maintenance of this large amount of master data, SAP relies on the integrated Stammdaten-Tool SAP Master Data Governance. The main goal of the solution is to achieve high data quality in the system landscape of companies. This is guaranteed, for example, through transparent processes, duplicate checks and approval procedures. Of course, the solution also complies with current legal regulations such as the European General Data Protection Regulation (GDPR).

MDG can be used flexibly as a separate hub system (hub deployment) or integrated into an SAP ERP or S/4HANA system (co-deployment). In addition, there is the possibility of a hybrid approach in which both options (hub and co-deployment) are used. Although it is an SAP solution, the data can also be distributed to non-SAP systems. The data can be synchronized either once or continuously. With continuous synchronization with other systems, MDG monitors changes to master data and is responsible for subsequent distribution.


Two major challenges of master data management have already been mentioned at the beginning: the increasing data volume and different data types. These are often located in different systems without central access – a veritable data jungle! SAP MDG brings together data from different origins (e.g. from a data warehouse) and formats.

Master data is often stored permanently in systems, so compliance with the European General Data Protection Regulation must be observed. SAP MDG helps with GDPR compliance by providing the Data accuracy increased, provides more transparency and supported in the handling of sensitive data, for example by introducing an authorization concept. Compliance regulations are observed because with SAP MDG master data changes are only carried out by authorized persons and completely documented.

Solution approaches and advantages of data management

With SAP MDG, master data can be maintained and processed centrally. become data processes uniformly controlled and automated, resulting in significantly less maintenance and more reliable and high-quality data. the high data quality is also ensured by an integrated data quality management. With this, rudimentary data sets can be recognized and change processes can be initiated. Without an established data management system, data is often located in different systems. SAP MDG creates one uniform data situation – it doesn’t matter during the migration whether the data is in an SAP or non-SAP system. Transparency and authorization concepts help to meet compliance and governance requirements. SAP’s solution for data management is also characterized by simple integration: predefined data models, user interfaces and workflows for master data objects such as financials and material are available out-of-the-box. All in all, the advantages mentioned lead to faster processes at lower costs.

Target group: For which companies is SAP MDG a suitable solution?

Master data is generated in companies of all sizes, so that SAP Master Data Governance is suitable for almost every company. Specialized MDG versions for the customer, supplier, material and finance departments offer interfaces, data models and workflows adapted to the respective area.

With SAP MDG for Customer companies get a holistic view of their customers. Identifying opportunities for improvement helps optimize the customer journey. Support requests can be answered quickly and reliably by ensuring that all employees have access to current customer data.

SAP MDG for Supplier supports purchasing in evaluating suppliers internally and thus obtaining an overview of their reliability. Thanks to qualitative data, the procurement process is optimized and the best possible prices and conditions are achieved with the suppliers.

The corona pandemic has shown how important sophisticated material management is. With SAP MDG for Material companies assign a unique material number to products and components. Using this, the product can be clearly assigned at any time during production, ordering or shipping and product-specific data can be read out. The advantages are transparent procurement, production and sales activities.

Financial statements must meet numerous legal requirements. In SAP MDG for Finance the central management and maintenance of financial accounting data is possible. It thus facilitates coordination between individual companies and ensures detailed, error-free financial statements.

The future of data management with SAP

The on-premise version of SAP Master Data Governance usually runs on the same server as SAP ERP or S/4HANA. But the course has now also been set for the cloud when it comes to data management, so that since 2021 a Cloud version of the SAP solution available is. The path to the cloud is particularly interesting for smaller companies. You save costs because you no longer have to operate and maintain the software and hardware yourself. Artificial intelligence and machine learning are also increasingly being used in data management with SAP. In the future, they will expand the functionality of SAP MDG or have already been implemented in some cases. For example, machine learning is already helping to improve data quality by proposing new rules.

Conclusion: It is becoming increasingly important for companies to introduce data management such as SAP MDG. That’s the only way they can Data treasures used efficiently and effectively in an organization will. Correct and complete data ensure high master data quality, which in turn is crucial for the success of a company and helps to adapt to dynamic market conditions at any time.

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Do you want to optimize the management of your master data, are you looking for a suitable data management tool, or do you want to adapt or expand your existing solution? Get in touch with us so that we can discuss your concerns without obligation. CONET offers a comprehensive range of MDG services and supports you in the design, implementation and personalization.

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Photo: Niklas Ludwig

Niklas Ludwig has been Communication Manager at CONET since March 2020 and is responsible for the internal and external communication of the CONET group of companies.


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