SAP, Reltio, and SAP MDG: What Does This New MDM Architecture Mean?

Sander van der Wijngaart, Managing Partner

SAP’s acquisition of Reltio is perhaps one of the most impactful data-related SAP developments in recent years. SAP announced the acquisition in March 2026 and completed it in May. The goal is clear: SAP wants to better enable organizations to make both SAP and non-SAP data reliable, connected, and ultimately AI-ready.

For organizations that have invested heavily in SAP Master Data Governance (MDG) in recent years, this immediately raised questions. What will the role of SAP MDG be going forward? Will Reltio replace parts of MDG? And what does this mean for existing MDG implementations?

SAP has since provided more clarity on the direction it has chosen. The key point is that SAP MDG and Reltio are not positioned as competing solutions, but as complementary components of the master data architecture within SAP Business Data Cloud.

Why Reltio Is of Interest to SAP

SAP MDG has traditionally excelled at managing master data related to SAP processes. This includes business partners, materials, financial master data, and other data directly linked to operational ERP processes.

However, modern IT landscapes almost never consist solely of SAP. For example, customer data may also be stored in Salesforce, supplier information in procurement solutions, and other master data in Microsoft, Oracle, or industry-specific applications.

That's exactly where Reltio makes a difference.

Reltio is a cloud-native, multi-domain MDM platform that can consolidate data from various systems. Using entity resolution and other capabilities, it can determine which records from different sources actually refer to the same customer, supplier, product, or other business entity. That data can then be consolidated into a single, reliable, and continuously updated view.

According to SAP, this capability plays an important role in creating a reliable data foundation for analytics and AI.

SAP MDG and Reltio have different roles

An important insight from recent SAP publications is that SAP now draws a fairly clear distinction between the roles of SAP MDG and Reltio.

SAP MDG focuses primarily on governance at the source.

SAP MDG ensures that master data is created and modified in a controlled manner. Examples include:

workflows and approval processes;
validations and derivations;
data ownership and stewardship;
compliance and auditability;
controlled creation and modification of SAP master data;
Distribution of reliable master data to other applications.

The strength of MDG, therefore, lies primarily in the principle: ensure that data is accurate and governed from the moment it is created.

Reltio serves a different purpose. It consolidates master data from various SAP and non-SAP sources and works to create a single, reliable view of that data.

The most significant opportunities in this regard lie in the following areas:

multi-domain MDM;
data unification across multiple systems;
entity resolution and deduplication;
360-degree views of, for example, customers and suppliers;
real-time synchronization;
data quality monitoring;
relationship intelligence;
creating trusted records for analytics and AI.

SAP essentially summarizes the division of roles as follows: MDG governs at the source, Reltio unifies across the enterprise.

Not a replacement, but a complementary architecture

That is a key difference compared to the initial discussions following the announcement of the acquisition. Based on SAP's current positioning, the question "Will Reltio replace SAP MDG?" does not seem to be the right one.

SAP specifically states that existing investments in SAP MDG will be preserved and that Reltio adds additional MDM capabilities within SAP Business Data Cloud.

The architecture that SAP envisions can be simplified as follows:

SAP refers to master data management as part of the Knowledge Core of the SAP Business Data Cloud. Both MDG and Reltio contribute to reliable, unified data products that can then be used by applications, analytics, and AI.

From a golden record to a system of context

This also changes the traditional concept behind Master Data Management.

For years, the main topic of discussion at MDM was the creation of a "golden record": for example, what is the single correct version of this customer or supplier?

However, for AI, simply having accurate data is not enough. AI must also understand how data is related to one another.

Who is this supplier? What products does it supply? To which factories? What contracts are associated with it? Are there any known risks? What other entities belong to the same organization?

To achieve this, Reltio uses, among other things, entity resolution and relationship intelligence. This not only creates a reliable record, but increasingly provides a system of context in which relationships between business objects are available.

This aligns directly with SAP's broader AI strategy.

After all, an AI agent that performs actions independently won’t first ask a data steward whether two supplier records might represent the same supplier. If the underlying data is incorrect, duplicated, or outdated, AI can actually propagate those errors much more quickly and on a larger scale.

Reliable master data is therefore not just a prerequisite for effective reporting. It is becoming a fundamental requirement for reliable enterprise AI.

What does this mean for existing SAP MDG customers?

For organizations that are already using SAP MDG, we see no reason to fundamentally change their chosen strategy in the short term.

In fact, SAP explicitly confirms the role of MDG within SAP Business Data Cloud. SAP MDG is now positioned as a core component within BDC and continues to fulfill the governance function related to the SAP source.

However, the context in which the MDGs should be viewed is changing.

The traditional question:

"How do we ensure that our SAP master data is accurate?"

is becoming more and more common:

"How do we ensure reliable and consistent master data across our entire application landscape?"

And that raises yet another question:

"How do we ensure that this data contains enough context to allow analytics and AI agents to function reliably?"

Those are far more architectural questions than product questions.

SAP itself therefore states that the choice between SAP MDG, Reltio, or a combination of the two should depend on the landscape, governance needs, and desired outcome. For some organizations, MDG may be sufficient. In complex hybrid landscapes, however, Reltio can play an important complementary role.

Our Vision

At Avelon, we view the acquisition of Reltio primarily as confirmation that Master Data Management is becoming more strategic—not less important.

In our opinion, SAP MDG remains a very robust solution for organizations that want to manage master data closely integrated with their SAP processes. It is precisely the combination of workflow, validations, derivations, data ownership, and integration with operational SAP processes that makes MDG so powerful for this purpose.

Reltio solves another problem: how do you create reliable master data when the actual data is spread across both SAP and non-SAP systems?

That is why we expect that, in the coming years, the discussion will focus less and less on SAP MDG versus Reltio. The more interesting question will be where, within the enterprise data architecture, each responsibility should lie.

As far as we’re concerned, this means that organizations need to clearly distinguish between three layers:

Governance in the Creation of
Where is master data created, and who determines whether that data is correct?
Enterprise-wide unification and quality
How do we identify and link the same business entities across different systems?
Consumption and Context
How do we make reliable and meaningful data available to processes, analytics, and AI?

In such an architecture, SAP MDG and Reltio can coexist and even reinforce each other.

This also shifts the role of the traditional MDG program. It is no longer just about implementing workflows and governance within SAP. Organizations will need to think more and more carefully about their overall master data architecture, data quality management, integration, and ultimately the context required for AI.

From Master Data Governance to an AI-Ready Data Foundation

The acquisition of Reltio is thus part of a much larger initiative within SAP. SAP Business Data Cloud is intended to serve as the data foundation on which applications, analytics, Joule, and future AI agents can rely.

To achieve this, it must be possible to combine SAP and non-SAP data without losing governance and business context.

SAP MDG provides governance at the source. Reltio can connect and harmonize data across systems and domains. SAP Business Data Cloud then makes this data available within a broader data and AI architecture.

So perhaps the most interesting aspect of the acquisition isn't even Reltio itself.

Above all, it shows how SAP views the future of master data: not as an isolated governance process, but as part of the knowledge and context layer on which an increasing number of business processes and AI applications will rely.

For organizations with an existing SAP MDG environment, it is therefore not necessary to suddenly change course at this time. However, this is a good time to take another look at the architecture.

Not only:

"Is our SAP MDG solution set up properly?"

But also:

"Is our overall master data architecture ready for a world in which SAP, non-SAP systems, data, and AI are becoming increasingly intertwined?"

Learn more

For organisations seeking insight into their current SAP MDG landscape, Avelon offers a SAP MDG Health Check. This quick scan is free of charge and provides a quick understanding of optimisation opportunities.

For more information about SAP MDG, or to schedule an intake meeting for this health check, please contact Sander van der Wijngaart.

Sources

SAP Community, What Does the Reltio Acquisition Mean for Master Data Management at SAP?, July 23, 2026.
SAP Community, What SAP Reltio in SAP Business Data Cloud Means for Your Data, September 2026.
SAP News Center, SAP to Acquire Reltio: Make SAP and Non-SAP Data AI-Ready, March 27, 2026.

SAP's Acquisition of Reltio