SAP is the predominant ERP solution for large companies, and it seems to continue that way as nearly all these organizations are currently on the path of updating and migrating from the old SAP version to the new SAP S/4 HANA solution.
During this process there is a welcomed focus on master data and the surrounding data governance. For the technical foundation for that we see 4 main scenarios:
- Handling the master data management within the SAP ERP solution
- Adding a plugin for master data management
- Adding the SAP MDG offering to the SAP application stack
- Adding a non-SAP MDM offering to the IT landscape
Let’s have a brief look into these alternative options:
MDM within SAP ERP
In this option you govern the master data as it is represented in the SAP ERP data model.
When going from the old R/3 solution to the new S/4 solution there are some improvements in the data model. This includes:
- All business partners are in the same structure instead of having separate structures for customers and suppliers/vendors as in the old solutions.
- The structure for material master objects is also consolidated.
- For the finance domain accounts now also covers the old cost elements.
The advantage of doing MDM within SAP ERP is avoiding the cost of ownership of additional software. The governance though becomes quite manual typically with heavy use of supplementary spreadsheets.
Plugins
There are various forms of third-party plugins that help with data governance and ensuring the data quality for master data within SAP ERP. One of those I have worked with is it.master data simplified (it.mds).
Here the extra cost of ownership is limited while the manual tasks in question are better automated.
SAP MDG
MDG is the master data management offering from SAP. As such, this solution is very well suited for handling the master data that sits in the SAP ERP solution as it provides better capabilities around data governance, data quality and workflow management.
MDG comes with an extra cost of ownership compared to pure SAP ERP. An often-mentioned downside of MDG compared to other MDM platforms is that handling master data that sits outside SAP is cumbersome in SAP MDG.
Other MDM platforms
Most companies have master data outside SAP as well. Combined with that other MDM platforms may have capabilities better suited for them than SAP MDG and/or have a lower cost of ownership than SAP MDG. Therefore, we see that some organizations choose to handle also SAP master data in such platforms.
Examples of such platforms I have worked with are Informatica, Stibo STEP, Semarchy, Reltio and MDO (Master Data Online from Prospecta Software).
While MDO is quite close to SAP other MDM platforms, for example Informatica and Stibo STEP, have surprisingly very little ready-made capability and methodology for co-existing with SAP ERP.
Liliendahl on Data Quality 
Hi Henrik,
very relevant topic! We have many customers who are thinking about data quality and data governance in the course of their S/4 project. Many understand that it is not enough to simply correct errors as part of a data migration. It’s about establishing a process that ensures that there are fewer errors, and that requires data governance and therefore also organizational measures.
As a note on the systems mentioned: We have noticed that customers tend to use non-SAP tools if they have a heterogeneous architecture. One example is our projects in the business partner domain (i.e. suppliers/customers/partners/employees). Salesforce or comparable tools are often used there.
BR
Michael
Thanks for adding in, Michael. Yes, CRM solutions as Salesforce are often seen running along with SAP and there we precisely have the basis for having a non-SAP MDM solution as the technical foundation for handling master data and ensuring data quality in one place outside SAP.
Excellent overview of the technical foundations the improved focus on master data quality can sit upon
Thanks, Conrad