What is SAP MDG

Maintaining proper data plays a crucial role in any organization. You know poor data causes lots of issues, and even it eats up all the resources. So when it comes to the SAP, the master data governance functional module does this job. In this MDG (master data governance) we will try to explain all the necessary topics to help our audience to explore more about SAP. Let’s begin with the definition of the SAP MDG (master data governance);

Introduction to MDG (master data governance)

SAP master data governance (MDG) is considered a state-of-the-art data management solution. The master data governance provides the out-of-the-box and domain-defined master data management to create, distribute, and modify the data across the complete enterprise system landscape.
The SAP MDG guarantees data integrity across both the SAP R/3 system as well as non SAP systems. SAP MDG is also known for its integrated foundation for the optimized business process that leads to higher productivity, is cost-effective, and is also time-consuming.

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Overview of Master data governance:

In the definition section, you have seen the definition of the SAP master data governance. The SAP MDG creates the out-of-the-box ability to optimize, create, modify, and transfer the business data within the organization. In the ERP environment we can run the MDG as a central hub, and later can be deployed on the respected operating system. For example;

  • ERP on HANA or any other database management system.
  • S/4 HANA environment

When it comes to the functional perspective, SAP MDG on S/4 HANA 1809 version correlates to the ERP 6.0 version SAP MDG 9.2 release.

The main purpose of using the master data governance in any ERP environment is to establish the best quality business data to optimize performance.

In the next section, we will see the purpose of using Master data governance.

The purpose of using the SAP master data governance:

  • The below are the important benefits of using MDG (master data governance) in any ERP organization.
  • The SAP MDG ensures data centralization, compliance, transparency, master data creation, integrated staging, central auditing, and data approval.
  • SAP MDG helps in the delivery of consistent data, authorization, and replication of the master data key representatives.
  • Helps to eliminate the error-prone manual maintenance process for the master data across multiple systems.
  • Enables organizations to create centralized data to define the key records and mapping between the duplicates.
  • Defines the master data quality, consistent data usage across all data entry points monitors the data quality, and analysis.
  • Helps organizations to observe and investigate the master data management quality to enable data optimization.
  • Offers native integration and openness to integrate with 3rd-party services.
  • Reusing SAP data models, business logic, and data validation configurations.
  • It acts as an open application to manage master data, and also check for the flexibility of the non-SAP environments.

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Now we would like to discuss the business benefits of using master data governance:

  • Low cost: SAP MDG fully integrates with other modules, and also offers integration services to the SAP client systems.
  • Flexible to use: SAP MDG also offers flexible workflow integration with other frameworks, and also helps to define the business values.
  • Offers ease of consumption: SAP master data governance helps to deliver process-centric and web-based UI (user interfaces).
  • SAP mdg also provides predefined data quality services.

Important modules of SAP Master data governance:

It’s mandatory for any functional module to comprise sub functionalities to produce profitable outcomes. So we can see below are the important sub-functional modules of master data governance.

  • Master data governance
  • Data consolidation
  • Governance
  • Information governance
  • Master data management

Let’s brief them one by one;

Master data governance:

The following are the major functionalities of the master data governance:

  • Master data governance can be considered as a linear, workflow, and distributed-based sub-module.
  • Helps to extend the business process functionalities, and also adds the business logic that improves the data quality.
  • Helps to optimize, create, modify, and distribute the business data within the organization.
  • All the business data are stored in a separate repository, once get approval, it will be stored in an operational database server.
  • With the help of the master data governance, users are allowed to adopt the data as per the customer requirements.
  • Flexible data usage across the organization to perform the necessary tasks.

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Master data consolidation

The master data consolidation means;

  • Data consolidation helps to load the master data from the client systems.
  • Helps in the identification and consolidation of identical or similar data objects.
  • Provides services like provision key mapping for the unified data mapping, company-wide analytics, and business operations.
  • It helps to aggregate the master data across the SAP and non-SAP centralized repositories. Once the data is consolidated, users are allowed to search for the data across the linked systems.
  • Offers the key mapping for the reliable company, and reporting.

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The following are the few governance definitions;
  • Governance offers easy integration of risk and compliance activities into the existing process.
  • Offers low complexity and manages the risk efficiently.
  • Improves the risk management activities in the organization.
  • Helps to find frauds while processing business, and manages the audit efficiently.
  • Organizations can protect their intellectual things, and also help business enterprises to perform well.
  • The SAP governance consists of three main areas, such as,
  1. Analyze
  2. Manage
  3. Monitor

Information governance

Information governance not only explains the technical capabilities but also explains the softer capabilities required to determine the information governance discipline in the SAP system.

The following are the major benefits of the information governance model:

  • The architect helps to design the information systems and interactions.
  • Integration: this model moves, and transforms the information quickly.
  • Cleanse: clean, standardize, enrich, and find the relationships among the information.
  • Manage: manages the stores of information includes data assessments and workflow.
  • Retain: archive and retain useful information according to organization policies, and regulations.

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Applications use Master data governance:

Till now we have seen the overview, benefits, and key abilities of the Master data governance. Now it’s time for us to know what are all the various industries that make use of MDG to boost up the data quality and management.

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SAP master data governance for financial business:

For example; financial/ accounting data consolidations, profit, and cost centers.

SAP master data governance for the supplier data:

For example; corporate, companies, partner functions, and purchasing related data.

SAP MDG for the customer data:

For example; sales-related data, and partner functions.

SAP MDG for the material data:

For example; corporate industries, sales organizations, storage, plants, warehouse, and costing data.

SAP MDG for enterprise assets management data:

For example; equipment, billing, and functional locational data.

SAP MDG for fashion and retail management:

For example; hierarchies, single and generic billings, listings, and characteristics variants.


can also be used in data models, user interfaces, and governance for the master-related data.

Final words

It’s very important to maintain data quality to achieve the overall performance of any business application through the SAP master data governance functional module. In this SAP Master data governance article, we have explained the architectural overview, key abilities, business functionalities, and applications of SAP MDG in various enterprises. Learning this article may help you to explore more about SAP master data governance which ensures the high-level data quality management system. We hope that people are learning many things by reading our SAP articles, and we never fail to reach users’ expectations.

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  • Batch starts on 30th Sep 2023, Weekend batch

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Kavya Gowda
Kavya Gowda
Research Analyst
Kavya works for HKR Trainings institute as a technical writer with diverse experience in many kinds of technology-related content development. She holds a graduate education in the Computer science and Engineering stream. She has cultivated strong technical skills from reading tech blogs and also doing a lot of research related to content. She manages to write great content in many fields like Programming & Frameworks, Enterprise Integration, Web Development, SAP, and Business Process Management (BPM). Connect her on LinkedIn and Twitter.