In a small business where roles are clearly defined and someone's explicit responsibility is to enter all new client data into the system, I can see one scenario where a master record should be created centrally.
SAP provides this choice so you can arrange records anyway you like in accordance with the requirements of your business. Regardless on how you arrange the records or enter the data, you can either do it centrally, in which case all the data is entered at once, or distributed by department, in which case each department can input the data as they see fit.
By managing the data centrally, storing it centrally will also help to reduce the number of times the very same information is input, preventing inconsistent master data. For instance, if the address of one of your clients changes, you only need to enter this update once, and your sales and accounting departments will always have the most recent data.
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