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Master Data Optimization with SAP MDG
Growing structures are also accompanied by an increase in the demands placed on a company's own master data. Incorrect or deficient master data can have significant consequences for a company.
How can master data be created, managed and distributed globally?
How can master data be created, managed and distributed globally?
Most companies' ERP landscapes consist of more than just one system. Advancing digitalisation is leading to the increasing coexistence of systems and applications that only perform partial functions in a process and therefore need to be closely interlinked.
For these cross-system and cross-application processes to function efficiently, the use of common, harmonised and globally valid master data is an absolute prerequisite.
With SAP Master Data Governance (MDG), SAP provides a professional, internationally applicable and standardised framework for the creation, maintenance, management and distribution of all relevant master data – regardless of whether the connected target systems are SAP or non-SAP systems.
What are the advantages of SAP MDG?
What are the advantages of SAP MDG?
Anyone who deals with master data in a company knows how important this data is and what happens when master data is not managed centrally.
Due to different perspectives, processing statuses, and areas of focus, data that is maintained decentrally will not be consistent and will require a great deal of coordination to harmonise. This is where SAP MDG comes in.
The advantages of SAP MDG at a glance:
- By using SAP MDG, companies can improve data quality.
- With SAP MDG, they can clearly assign data sovereignty to a specific system.
- Processes within the company can be structured more easily, and staff can work more efficiently.
Data records are stored centrally and can be accessed at any time. There is no need for work orders to deliver data or for harmonisation between different work areas in advance of planned activities. This speeds up business processes. Uncertainties caused by outdated or unharmonised master data no longer occur.
Changes in business orientation can be made without being hampered by cumbersome master data handling.
Master data can be merged from SAP systems, non-SAP systems, on-premise and from the cloud into a single dominant master data record. This creates order. This enables rapid reactions to the market, even in unforeseen circumstances.
This reference data is made available to the departments from a central location. The individual departments are free to clean up the data for specific actions.
It is also common practice to enrich master data records of users within a department with information that is only relevant to that department – for example, to award bonus points for the performance of the sales team. However, this does not affect master data governance or the delivery of the latest master data to the individual departments.
SAP MDG uses the master data records to create the reference data set for the entire company. Data can be made visible and accessible to employees with access authorisation and maintained if they have been assigned the appropriate roles. This means that current reference data sets are available for retrieval within the company.
How does SAP MDG work?
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. User interfaces can be customised, even individually for sub-departments or individuals.
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.
Overview: What are the key functions of SAP MDG?
Overview: What are the key functions of SAP MDG?
Key functions:
- Customisation and automation of workflows
- Secure compliance with regulatory requirements
- Automated data maintenance measures
- Updating of master data at specified intervals
- Support for data protection through routines in master data management
What functions does SAP MDG offer?
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.
In addition, it is possible to restrict entries using value help and preselections. The familiar warning and error messages provide even stronger data validation. Authorisations within MDG are based on the specifications of your own ERP system. With the help of additional user roles, a more specific subdivision of authorisations can be carried out without any problems.
Regular maintenance measures for your own data can be stored via SAP MDG. The scope of maintenance can be defined and automated.
To avoid redundant maintenance activities, it is possible to deactivate all transactions relating to data maintenance within the ERP system and transfer them to the central MDG.
Routines in master data management help to ensure that master data is updated at regular intervals. Experience shows that information used to update data comes from a variety of sources – beyond officially defined notifications.
Routines also help to support data protection. 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 to the master data records are documented and can be easily accessed via SAP MDG. This is also a major advantage from a compliance perspective.
What do users need to know and do?
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?
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
Differentiation from SAP MDM - Master Data Management
SAP MDM Master Data Management is a specialised, comprehensive solution for maintaining existing master data. When data needs to be integrated from systems that are not identical, SAP MDM is ideal for integration and improving data quality.
SAP MDM is less dominant than SAP MDG and tends to compare existing data models at different points. The SAP MDG tool should be relied upon as a correctly maintained database, which in turn closes the circle of master data maintenance.
How can SAP MDG be implemented?
How can SAP MDG be implemented?
SAP MDG solutions for SAP S/4HANA enable companies to reap the benefits of harmonised master data in the shortest possible time.
These include
- Global creation and assurance of comparability, transparency, and controllability
- accelerated integration of digital and cloud-based systems and applications
- the use of professional and centralised enterprise functions such as SAP Central Finance and Controlling.
SAP Master Data Governance (MDG) is designed in such a way that even previously unharmonised master data can be made comparable through highly efficient mapping architectures.
This often eliminates the need for extensive data conversions in existing systems – a valuable innovation when time is of the essence for commissioning.
Extensive monitoring functions and integrated, status-managed workflows ensure long-term, company-wide data governance and guarantee that the right data will continue to be available in real time in all connected systems in the future.
