Many organizations today operate in a 2-Tier ERP landscape. The typical setup is straightforward:
The headquarters (HQ) runs SAP S/4HANA Private Cloud, while regional or newly acquired subsidiaries run SAP S/4HANA Public Cloud for speed, simplicity, and lower operational overhead.
This model works well from a system perspective—but it also asks some questions.
When each system manages its own master data, inconsistencies appear. Customers get duplicated, product hierarchies drift apart, and group-level reporting becomes harder with every rollout.
This is exactly where SAP Master Data Governance (MDG) fits into the picture.
Why Master Data Governance Becomes Important
In a 2-Tier environment, ERP systems are technically independent but business data is shared.
Customers, suppliers, products, and financial structures must mean the same thing everywhere.
Without a governance layer, organizations often experience:
Multiple versions of the same customer or supplierDifferent product definitions across regionsManual reconciliation during reporting and auditsGrowing effort to onboard new subsidiaries
SAP MDG addresses this by introducing structure and ownership around master data—without taking flexibility away from local businesses.
How SAP MDG can be Used in a Private–Public Cloud Setup
In this landscape, SAP MDG runs at HQ on S/4HANA Private Cloud.
It becomes the central place where master data is created, validated, and approved.
Subsidiaries on S/4HANA Public Cloud do not manage governance themselves. Instead, they:
Receive approved master data from HQUse it operationallyMaintain only a small set of permitted local attributes
A simple principle guides the design:
Create and control master data centrally, consume it locally.
This keeps global standards intact while allowing subsidiaries to remain agile.
High-Level Architecture View
At a conceptual level, the setup consists of three clear layers:
Governance Layer (HQ – Private Cloud)
SAP MDG defines rules, workflows, and approvals for master data.Integration Layer
Standard SAP APIs ensure secure and consistent data distribution.Consumption Layer (Subsidiaries – Public Cloud)
Subsidiaries receive governed master data and enrich it only where allowed.
Why This Matters for S/4HANA Public Cloud
S/4HANA Public Cloud is designed to stay clean, standardized, and upgrade-safe.
SAP MDG supports this philosophy by ensuring that only high-quality, compliant master data enters these systems.
As a result, organizations benefit from:
Fewer data-related issues in Public CloudFaster onboarding of new subsidiariesMore reliable enterprise reportingLower long-term data maintenance effort
Conclusion :
In a 2-Tier ERP landscape with S/4HANA Private Cloud at HQ and S/4HANA Public Cloud at subsidiaries, SAP Master Data Governance is not just a technical solution—it is a strategic foundation.
By placing governance at the center and distribution at the edge, organizations achieve:
Global consistency without slowing down local teamsA scalable ERP model for growth and acquisitionsLong-term alignment with SAP’s cloud strategy
Strong master data governance ensures that as systems evolve, data remains stable, trusted, and ready for the future.
Many organizations today operate in a 2-Tier ERP landscape. The typical setup is straightforward:The headquarters (HQ) runs SAP S/4HANA Private Cloud, while regional or newly acquired subsidiaries run SAP S/4HANA Public Cloud for speed, simplicity, and lower operational overhead.This model works well from a system perspective—but it also asks some questions.When each system manages its own master data, inconsistencies appear. Customers get duplicated, product hierarchies drift apart, and group-level reporting becomes harder with every rollout.This is exactly where SAP Master Data Governance (MDG) fits into the picture.Why Master Data Governance Becomes ImportantIn a 2-Tier environment, ERP systems are technically independent but business data is shared.Customers, suppliers, products, and financial structures must mean the same thing everywhere.Without a governance layer, organizations often experience:Multiple versions of the same customer or supplierDifferent product definitions across regionsManual reconciliation during reporting and auditsGrowing effort to onboard new subsidiariesSAP MDG addresses this by introducing structure and ownership around master data—without taking flexibility away from local businesses.How SAP MDG can be Used in a Private–Public Cloud SetupIn this landscape, SAP MDG runs at HQ on S/4HANA Private Cloud.It becomes the central place where master data is created, validated, and approved.Subsidiaries on S/4HANA Public Cloud do not manage governance themselves. Instead, they:Receive approved master data from HQUse it operationallyMaintain only a small set of permitted local attributesA simple principle guides the design:Create and control master data centrally, consume it locally.This keeps global standards intact while allowing subsidiaries to remain agile.High-Level Architecture ViewAt a conceptual level, the setup consists of three clear layers:Governance Layer (HQ – Private Cloud)SAP MDG defines rules, workflows, and approvals for master data.Integration LayerStandard SAP APIs ensure secure and consistent data distribution.Consumption Layer (Subsidiaries – Public Cloud)Subsidiaries receive governed master data and enrich it only where allowed.Why This Matters for S/4HANA Public CloudS/4HANA Public Cloud is designed to stay clean, standardized, and upgrade-safe.SAP MDG supports this philosophy by ensuring that only high-quality, compliant master data enters these systems.As a result, organizations benefit from:Fewer data-related issues in Public CloudFaster onboarding of new subsidiariesMore reliable enterprise reportingLower long-term data maintenance effortConclusion :In a 2-Tier ERP landscape with S/4HANA Private Cloud at HQ and S/4HANA Public Cloud at subsidiaries, SAP Master Data Governance is not just a technical solution—it is a strategic foundation.By placing governance at the center and distribution at the edge, organizations achieve:Global consistency without slowing down local teamsA scalable ERP model for growth and acquisitionsLong-term alignment with SAP’s cloud strategyStrong master data governance ensures that as systems evolve, data remains stable, trusted, and ready for the future. Read More Technology Blog Posts by SAP articles
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