Master Data Optimization with SAP MDG

What is SAP MDG?

The SAP Master Data Governance (SAP MDG) solution helps companies validate, capture, consolidate, and distribute master data in a central location with defined and automated workflows.

How does SAP MDG work?

Within SAP Master Data Governance, business objects such as Customer or Vendor are captured as separate data models. These models are customizable and can be tailored to the individual needs of the business.

As with ITIL, changes to the data can only be made through change requests. When a change is made to master data, it is moved to an inactive area and only after successful validation and release does data move back into productive operation and can be used in an updated form.

The actual distribution of master data is based on known functions such as IDOC/ALE or RFC connections. In this way, data is distributed consistently from a central point to all systems.

What functions does SAP MDG offer?

SAP MDG uses SAP Business Workflow so that individual processes can also be tailored to the company. With this, workflow templates are customized and can be individually modified for the company.

Workflows can be automated with SAP MDG, so that employees can rely on a functioning routine through processes that have been implemented once.

Rules for a workflow can be stored in SAP MDG if, for example, data records are to be checked and released by two people. A regulated workflow creates transparency regarding the origin and timeliness of data and regarding the tasks and involvement of personnel in importing new data records.

Master data can be regularly passed on from the parent company to the subsidiaries or made available for retrieval. This is more economical than individual requirements.

In addition, dynamic user interfaces are used to present interfaces strictly according to compliance guidelines. With the help of the direct connection to the actual ERP system, a continuous check of the entered data takes place.

Furthermore, it is possible to restrict entries via value aids and preselections. With the known warning and error messages, an even stronger validation of the data takes place. The authorizations within the MDG are based on the specifications of the own ERP system. With the help of additional user roles, a further more specific subdivision of authorizations can be carried out without further ado.

Regular maintenance of your own data can be stored via SAP MDG. The maintenance scopes can be defined and automated.

To avoid redundant maintenance activities, it is possible to deactivate all transactions regarding data maintenance within the ERP in order to shift them towards the central MDG.

Routines in master data management help to ensure that master data is updated at a defined rhythm. Experience shows that information obtained to update data comes from a wide variety of sources - beyond officially defined messages.

Routines also help to support data protection. The information about customers with whom no further business has been conducted for a long period of time can be removed from the master data records.

Changes in the master data records are documented and can be easily retrieved via SAP MDG. This also represents a major advantage from a compliance perspective.

What do users need to know and do?

In order to use the system successfully, SAP MDG imposes certain requirements on the user. A structured and well thought-out role concept is indispensable, which must be coordinated and approved by the corresponding user groups.

Due to the strong involvement of change management, users must be prepared for the specific procedure. Workflows and processes must also be defined and developed with all those affected. For a high data quality it is recommended to pay special attention to the possibility of data input. The more restrictions are developed for individual inputs and support is provided to the user via warning messages and error messages, the higher and better the expected data quality will be.

Due to the centralized management, the use of already proven technologies and the scalability, MDG offers an excellent opportunity to reduce costs during operation with the help of the own data.

Which versions of SAP MDG are available?

In addition to a standard version, there are versions of SAP MDG for the areas Customer, Supplier, Finance and Material.

These specialized versions optimize the use within these application areas. Criteria such as date of birth or storage location do not need to be created or sorted out first, depending on the intended use.

Customer, supplier, finance and material data can be linked to ERP processes.

This is of particular importance, since an exchange takes place in two directions: SAP MDG provides the master data to the sales department; however, information will come from the returns and service departments that can be included for updating customer data or stored as product evaluations from customers.

1. SAP MDG - Master Data Governance for Customer

Customer data is valuable for making a targeted offer that is of sufficient interest to customers. For banks and insurance companies, it is important to be able to assess whether customers are in the accumulation or consolidation phase of life or already in retirement and disposing of their portfolio.

Presenting an offer that is not designed with the target group in mind is perceived as an affront, especially by the younger generation. The use of social media contributes to the perception that individual preferences should be known after all.

The same applies to convenient customer service. Here, orders should be able to be called up by the customer so that the order history does not have to be reported by customers.

Customer service and the submission of new offers can be linked. If a customer feels well taken care of by a service representative, he or she will have a higher acceptance for an additional offer - a meaningful offer based on the maintained customer data.

It costs nine times as much to win new customers as it does to try to win additional business from an existing customer. The data already exists in your company. SAP MDG provides your employees with up-to-date data for use through the appropriate roles.

2. SAP MDG - Master Data Governance for Supplier

The margin is in favorable purchasing. For standard products, past orders can be viewed to compare prices. In this way, regularly occurring orders for consumer goods can be simplified.

The reliability of the supplier and the assessment by the specialist departments can be recorded here, as can references to agreed conditions. Reference to existing framework agreements from strategic suppliers simplifies the process.

The formal ordering process is massively simplified by the experience of various departments stored in SAP MDG for Supplier. Compliance requirements are easier to implement through SAP MDG and easier to document through a single master database.

3. SAP MDG - Master Data Governance for Material

Highly complex products with a large number of individual specialized components present material management with the challenge of keeping all components available for production.

On the other hand, neither purchasing budgets nor storage space capacities should be strained. In industries such as automotive, just-in-time delivery directly to the assembly line is even required.

A mature master database for material is used to name a component or finished product with a unique material number and to maintain and pass on suitable data of this product for an ordering process or for further processing in production or for shipping.

SAP MDG for Material assumes the role of the master database for material. The ERP benefits significantly from the uniqueness of the material master data stored here.

4. SAP MDG - Master Data Governance for Finance

Special situations can lead to the sudden need for a cash audit even in globally operating groups. The reason is often an additional need for financial resources, the goal is to quantify savings opportunities without affecting the business in the short term.

If a measure is questioned, for example in the area of marketing communications, the annual budget and the consumption of the previous year must be immediately identifiable.

Allocation to departments, projects or national companies is only possible if the data is already in a master database for financial accounting. From here, unique numbers are assigned to accounts and departments.

In SAP MDG for Finance, the financial accounting data is maintained and managed centrally. This creates the basis for organizing and facilitating the requirements and process of financial statements - also according to international standards - in advance.

Differentiation from SAP MDM - Master Data Management

SAP MDM Master Data Management is a specialist for the maintenance processes of existing master data. If data is to be integrated from systems that are not congruent, SAP MDM is ideal for integration and increasing data quality.

SAP MDM is less dominant than SAP MDG and is more likely to reconcile existing data models in different places. SAP MDG should be relied upon as a correctly maintained database, which in turn closes the circle to master data maintenance.