What Is SAP MDG? Full Form, Process & Deployment Options
What is SAP MDG? A Complete Guide to Master Data Governance in S/4HANA
SAP MDG is SAP Master Data Governance. This SAP solution provides governed workflows to create, change, validate, approve and distribute master data ensuring materials, suppliers, customers and finance data are accurate and consistent across systems. In S/4HANA, MDG can be deployed as an ERP, a separate hub, or a cloud edition.
In this guide we are going to show you the full form of MDG and what it does, how a change flows through MDG, where it runs and what you need to know to work with it. It skips the course brochure details to learn about the product.
Full Form of SAP MDG
SAP MDG Full Form is Master Data Governance. In the SAP world MDG always means this product so the MDG full form in SAP is simply SAP Master Data Governance.
The word governance is key. MDG is more than a data storage place. It puts rules, roles, approvals and audit trails on top of data changes. It also replaces the prior SAP Master Data Management (MDM) strategy that emphasised consolidating and distributing data rather than controlling its creation.
What does SAP MDG mean?
MDG is like an intermediate checkpoint between a request and your live data. Instead of directly creating a supplier in the ERP, somebody submits a request. MDG validates the data for errors and duplicates, routes it to the right approvers, then activates the record and pushes it to the required systems.
SAP describes the product around some key capabilities:
| Capability | What it does | Example |
|---|---|---|
| Central governance | Change request processing with work flow, staging, approval, activation and distribution | New material requested, approved and released |
| Consolidation | Matching, merging and best-record calculation for data owned in many places | Merging two plants’ duplicate supplier lists |
| Mass processing | Changing many records in one controlled run | updating a payment term for hundreds of suppliers |
| Data quality management | Rules, monitoring and correction | flagging customers with missing tax IDs |
| Replication | Sending approved data to target systems | pushing a new customer to ERP and CRM |
Importance of Data Governance
Poor master data creates problems that appear to be process failures but start with the data:
- Duplicate suppliers create duplicate payments and weak negotiating power
- Inconsistent material descriptions breaking reporting and purchasing
- Payments delayed by wrong or missing tax and bank details
- Slow onboarding slows down sales and purchasing
- Messy data makes migrations and system consolidations more difficult
Governance is not just cleaning data after the fact, it is controlling how data gets into the system, fixing the cause.
How SAP MDG Works: The Change Request Process
Regardless of the data type, a typical change request will follow the same path.
- Request. A user makes a change request to make or modify a record.
- Staging. The new data is stored as inactive data, not yet in the live records.
- Validation. Rules check for required fields, formats and duplicates.
- Enrichment. The system derives or populates values, e.g. default fields.
- Approval. Data stewards or business approvers get the request via a workflow.
- Activation. Once approved, the data will be live.
- Replication. The Data Replication Framework (DRF) publishes the record to target systems via services, IDocs or files.
Our SAP MDG architecture guide shows how these pieces fit together technically.
A Real Example: Adding a New Supplier
This is what the lifecycle looks like in practice:
- Purchasing issues request for new supplier with name, address and tax information.
- MDG performs a duplicate check and identifies a similar existing record for the requester to review.
- Validation rules to validate tax id format and mandatory bank fields.
- Finance approves bank details and Compliance approves supplier category.The supplier is active on MDG.
- DRF copies the record to the ERP and the systems attached to it.
Each step is logged so you can see who requested, changed and approved what.
Which Data Is Managed by SAP MDG?
MDG provides ready-to-use applications for the most common data domains and a framework for your own objects.
| Domain | Typical data |
|---|---|
| Material (MDG-M) | Product and material master data |
| Supplier (MDG-S) | Vendor and supplier data |
| Customer (MDG-C) | Customer data |
| Business partner | Combined customer and supplier role data in S/4HANA |
| Financials (MDG-F) | Finance master data such as accounts and cost objects |
| Other | Enterprise asset management, retail and fashion, and custom objects |
Next, if you want to model your own objects, you might want to read our article on the SAP MDG data model.
SAP MDG Deployment Options in S/4HANA
| Option | Description | Best for |
|---|---|---|
| Co-deployment | MDG runs on the same system as transactions such as order-to-cash or procure-to-pay | Simpler landscapes that want less latency and no cross-system replication |
| Hub deployment | MDG runs on a dedicated system that only deals with master data and distributes it | Landscapes with several systems that need one governance point |
| Cloud edition | MDG runs on SAP Business Technology Platform as a complementary option | Cloud-first organisations and central governance of core data |
Newer S/4HANA releases also come with a cloud-ready mode and newer Fiori apps for central governance, consolidation, and data quality. It can run in parallel with classic mode during a transition . * Some organisations combine several MDG systems in a federated model, so check which option SAP recommends for your release.
Key MDG Terms
| Term | Meaning |
|---|---|
| Change request | The governed request containing a data change |
| Data steward | The person who is responsible for data quality in a domain |
| Staging | The holding area for data that is not yet approved |
| DRF | Data Replication Framework, which takes approved data and sends it to other systems |
| BRFplus | The rules tool that is often used for validations and derivations |
| Workflow | The approval routing for each change request |
| Best record | The merged "golden" version that is created during consolidation |
Advantages and Disadvantages
Advantages
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- Cleaner and more consistent data across systems
- Controlled, streamlined onboarding of suppliers, customers and materials
- Compliance audit trail
- Less rework and duplicate payments
- Stronger analytics and migrations foundation
Issues
- Determining ownership of data domain
- Understanding how much of the data model to standardise
- Change management as users can no longer create records directly
- Dealing with replication errors and timing between systems
- Data cleansing at first load time
Who Works With SAP MDG?
- MDG is used by requesters and approvers in the business.
- Data stewards monitor quality and correct exceptions.
- Functional consultants (MDG) configure processes, rules and workflows.
- Technical and integration consultants work with models, interfaces and replication, often using tools such as SAP CPI.
Each module depends on master data and professionals from MM, SD, FICO and data background all move to MDG. If you are from procurement then you can also learn SAP S/4HANA MM knowledge to understand material and suppliers data.
Skills to Learn for SAP MDG
- ERP master data: Material, Supplier, Customer and Business Partner master data
- Workflow, approvals and change request procedures
- Rules of validation and derivation
- Data integration and replication
- Consolidation concepts such as best record and matching
- User Roles and Fiori Apps
For exam preparation, have a look at these SAP MDG certification questions. And for interviews, check out our sister site’s SAP MDG interview questions.
FAQ
What is SAP MDG?
SAP MDG stands for SAP Master Data Governance, a solution that governs how master data is created, changed, approved and distributed across systems.
SAP MDG stands for SAP Master Data Governance.
SAP MDG is an abbreviation of SAP Master Data Governance.
What does MDG stand for in SAP?
Is SAP MDG in S/4HANA?
MDG is the abbreviation of Master Data Governance in SAP.
MDG is available on S/4HANA either co-deployed with your transactional system or as a hub. There is also a separate cloud edition.
What is the difference between central governance and consolidation?
Workflows are used by central governance to control new and changed records. Consolidation is the process of taking data that already exists in many systems, and matching and merging it .
What is the Data Replication Framework?
Approved master data is sent from MDG to the target systems by DRF via enterprise services, IDocs or files.
Do I Need ABAP to Learn SAP MDG?
SAP MDG is a master data governance solution that is independent of ABAP skills. You do not need to have ABAP knowledge to work with SAP MDG. However, it is recommended that you have a fundamental understanding of SAP and the master data process. If you are an ABAP developer, you can use your ABAP skills to customise and extend the SAP MDG solution. But this is not a prerequisite. SAP MDG can be used by anyone who wants to govern master data, regardless of their ABAP skills.
Functional roles are about processes, rules, workflows. Technical roles require ABAP and Fiori skills.
Start SAP MDG Training
SAP MDG goes from free for all to a governed process for master data: request, validate, approve, activate and replicate. Once you get that lifecycle and the deployment options, the rest of the product starts making sense.
Want to play around with a live MDG system? You can also book a free demo for SAP MDG training, call +91 9922848898 or +91 8408878222 or email us at info@bestonlinecareer.com.
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