After watching and being involved in activities around mergers, divestments, and acquisitions over the 16 years of my career so far, I have realized never to underestimate the importance of an organization’s Master Data.

A consumer products company I am familiar with acquired a big competitor in Australia in 2018. I was involved in the post-merger integration and a very large standalone workstream was IT and master data management. We actually ran behind schedule because of the complexity of that workstream more than other areas such as organization restructuring or legal activities.

SAP MDG Cloud user interface

What is Master Data?

Master data is the core data that is absolutely essential for a business to run. It is produced and shared across the enterprise and helps with correct reporting, reducing data redundancy, and helping employees and management make better-informed decisions. Examples of Master data could include data about customers, suppliers, products, assets, locations, inventory, etc.

Any organization, private or public, large or small, local or multi-national, for-profit or NGO, needs a Master Data Management process and solution to manage and improve their data quality and as a result, their business operations. Managing Master data provides a single source of truth across business entities and systems and ensures the integrity of business data.

While Master data is usually small from a volume perspective, it’s complex and valuable to maintain and manage. Because master data is used by multiple applications, an error in the data in one place can lead to errors in all the applications that use it – almost like a Butterfly effect. An incorrect address in the customer master might mean orders, bills, and marketing promos are sent to the wrong location. Similarly, an incorrect price on an item master can be an issue and an incorrect account number in an account master can lead to huge fines.

Questions MDG can help answer

This is where SAP has been helping customers for decades with its capabilities in managing Master data.

SAP Master Data Governance

powered by SAP Business Technology Platform

The SAP Master Data Governance application consolidates and manages master data and provides accurate, consistent, and complete master data across the enterprise and to business partners. It provides benefits such as improved data consistency, faster deployment of business initiatives, and reduced Total Cost of Ownership (TCO).

Some of the features of SAP Master Data Governance that make it truly unique are:

• Bulk uploads
• Collaboration on Master data across teams
• Data quality and rules management
• Integration with SAP and non-SAP apps

Digital transformation is now mainstream across organizations. Because companies have realized that not only can they beat the competition by becoming more agile digitally but it also helps them in recovering from a downturn or preparing for the next downturn.

But without data, there can be no digital transformation – no analytics to drive new revenue sources, no forecasting of bad debts from suppliers and overdue receivables from customers. Additionally, for data to fuel these initiatives, it must be readily available, of high quality, and relevant. Good data governance ensures data has these attributes, which enable it to create value from data.

Companies now have customers, vendors, and assets shared across different business units and segments. And to provide them with a unified experience across different channels and touchpoints, a company needs a single profile across the group, automation for sales and service, targeted marketing, and finally a feedback mechanism or listening platform to close the loop. And underlying all of this is again a strong robust master data platform and a finance and reporting system to consolidate and report the results.

Master Data – the bedrock for a digital, integrated and customer-focused enterprise

Also, for companies focused on growing both inorganically and organically – whether they target new mergers and acquisitions, centralization of business functions, investment in new industries, new territories, or new technologies, it always has an impact on master data governance.

Benefits from SAP Master Data Governance

There are 3 broad categories across which benefits can be realized by a company:

Quantifiable benefits of SAP Master Data Governance

And organizations also experience several strategic or qualitative benefits from SAP’s capabilities; often as important as the quantified benefits.

Strategic / Qualitative benefits

In conclusion, I would request any organization with critical data about its customers, suppliers, etc., to consider focussing more on managing its Master Data. For innovative companies looking to adopt and invest in technology solutions that not only address industry disruption but can complement the business and extend new strategic capabilities, it is a must-have.

If you like my article or have any comments or suggestions for me, please leave a comment and I will be happy to discuss it in detail with you.