SAP's Approach to Master Data: Pros, Cons and a New Addition


When it comes to master data management, SAP isn't exactly what Gartner considers a leader. In fact, SAP ranked as a niche player in Gartner's recent Magic Quadrant for MDM of Customer Data, and in the 2009 Magic Quadrant on MDM of Product Data, it's listed as a "challenger."


It's not exactly what you'd hope for if you are among the many who use the world's largest independent ERP company. But there's good news: SAP is changing its MDM offering in ways that Gartner believes will help the ERP company catch up. Here's the even better news if you're one of SAP's many customers: These changes are in response to your requests.


A recent TechTarget article looks at SAP's strengths, weakness and what SAP's doing to beef up MDM. Among the changes: A new master data governance product-called, simply enough, SAP MDG-that's "embedded" or integrated with SAP solutions, starting with SAP Business Objects. Meanwhile, SAP's existing MDM offering-Netweaver MDM-will be marketed as an enterprise MDM solution for more heterogeneous environments; although, in an October "MDM Positioning Update," SAP is quick to point out you could benefit from both and they're designed to work together.


Indeed, Gartner's John Radcliffe, who authored the MDM for Customer Data report, told TechTarget that most SAP customers will also need Netweaver MDM because most also operate non-SAP systems.


Needless to say, customers are finding this shift to two products a bit confusing, according to the article.


Here's something that may help: This is a shift for SAP, which previously insisted the only MDM product it would offer was Netweaver MDM. Customers disagreed, and this new offering is a response to their requests, according to my recent e-mail exchange with Radcliffe.


I asked Radcliffe for clarification, because while the TechTarget article is excellent, it does make it sound like MDG was developed as a result of SAP's $6.8 billion acquisition of Business Objects-aka, BOBJ-four years ago. I found that confusing, because one of the highlights of that deal was acquiring the technology to cleanse and integrate data from non-SAP applications. Since MDG is being promoted as a tool for those running primarily SAP, that didn't make sense. Radcliffe stated:

The introduction of MDG was not a follow on result of the acquisition of BOBJ. It was a reaction to requests from the SAP base.

While MDG will leverage the Business Objects technology-which can, of course, also clean and integrate SAP data-that same technology has also been successfully leveraged by Netweaver MDM 7.1, according to Radcliffe.


Also, it's probably best to think of MDG as what TechTarget calls an "umbrella name for what will eventually be a set of domain-specific MDM applications." There's already SAP MDG for Financials, which came out in 2008, and the article said you can soon expect an MDG for Materials and MDG for Suppliers, followed by an MDG for Customers within two years.


SAP is making adjustments to its MDM offerings in other ways, including improved support for data stewardship, data quality and data governance. SAP's Gerd Danner, vice president of SAP's MDM division, says the company will issue a minor release in 2011 that addresses customers' support concerns. The next major MDM release isn't planned until 2012.


The TechTarget article also looks at what Gartner learned about SAP's strengths and weaknesses from actual customers. One thing I thought was particularly interesting: Even though SAP has sold licenses to 500 sites for Netweaver MDM (and the October presentation now puts that number at around 800), there actually haven't been that many live implementations for customer data.


SAP customers would also do well to read the original Magic Quadrant reports, which note that while SAP may not be a general MDM leader, it is still best-of-breed in some areas. Both the Magic Quadrant for Product Data from 2009 and the Magic Quadrant for Customer Data from 2010 are available for free reading online.


If you have further questions, skim the comments posted below in this webinar announcement. SAP's Markus Ganser, who works in Solution Management Rollout for SAP NetWeaver Master Data Management (MDM), answers a slew of excellent questions from SAP users about what these changes mean for customers.