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Setting the right level of centralization and harmonization for effective master data management

Manage master data at the exact place in the organization where it is best understood

In a recent blog post about SAP Master Data Integration and SAP Master Data Governance, Jan Schaffner discussed how the business success of companies relies on consistent and non-duplicate master data that is managed and shared consistently across the enterprise.

I would even say, for companies that strive to become integrated, intelligent enterprises, it has never been more important to have access to trusted, high-quality master data. Be it in order to optimize operations, or to better understand and service customers, or to speed up innovations to the market.

At the same time, business application landscapes have changed considerably, and this trend is even accelerating. Companies are increasingly looking for modular applications that can be composed into integrated business processes across many applications. And, of course, there is also the trend to increasingly consume these applications in the cloud.

In this context of increasingly modular cloud applications, companies seek to achieve their aspirations in innovation and digitalization with dedicated support from master data management. To really support this new reality of modular cloud applications, master data management also needs to follow this trend. When the center of gravity is moving to the cloud for some application clusters, the respective MDM capabilities need to be provided where they are required by the applications. And MDM needs to move to the cloud. And when applications become more modular, MDM also needs to become more modular.

The answer to this evolving reality is federation of master data governance. We have outlined the broader perspective on how you can optimize master data management through federated data governance in a recent SAP Thought Leadership Paper. In this paper, we describe an adaptive model for trusted, process-relevant data that helps to drive greater insights, efficiencies, and return-on-investment. The paper describes how the power of the new MDM paradigm allows to

  • skillfully access and share master data to fuel cross-functional analytics, insights, and business processes

  • manage data exactly where it’s best understood to optimize MDM scope, benefits, and effort

  • take a stepwise approach to enterprise MDM to accelerate time to value

We are committed to evolving SAP Master Data Governance in this direction. Today, as a next and very visible step, I am happy and proud to announce that we are planning to provide a new version of MDG: SAP Master Data Governance, cloud edition.

This is a new, complementary version of MDG. We expect that many companies will use it in addition to – and not as a replacement of – their SAP MDG on S/4HANA implementation, in order to establish a federated approach to master data governance in their enterprise. We are convinced that for many companies this new modular approach will provide an even better total cost of ownership and will allow for an even broader reach of an enterprise-wide master data management program.

We have prepared more information for you so you can learn more about this new option and the value it may provide to you. Today, SAP MDG is typically used to centrally manage master data for a complete enterprise with just one single MDG on S/4HANA. This new deployment option for MDG, federation, is an approach that you may use to extend MDG’s value proposition towards areas of your company that perhaps have so far been difficult to include in your program. It provides a non-disruptive path towards a more agile and flexible master data governance that can fully leverage all investments that you have already made in SAP MDG on S/4HANA. And for companies that have not started their SAP MDG journey yet, it provides an additional entry path into Federated MDG, starting with subscribing to a very easy to consume SaaS solution and then extending this to Federation at their own pace.

Please refer to this video or alternatively to this article to learn more about the concept of Federation and about SAP MDG, cloud edition. The overall concept is also explained in this infographic. And there is a dedicated FAQ section which might provide fast answers to your most pressing questions.

For your convenience, here’s a list of all the mentioned links to the relevant assets related to SAP MDG, cloud edition and Federated Master Data Governance:

I would encourage you to follow the MDGUpdates2021 tag to see more SAP Community blog posts about SAP Master Data Governance. In the next couple of days, we will provide more information on availability dates for the new version.

For more information on SAP Master Data Governance on SAP S/4HANA, please see: