High quality data is essential to timely and effective decision making, and it’s critical to ensuring regulatory, legal and financial compliance. Yet, maintaining such data and knowing it can be trusted is a challenge – one exacerbated by the proliferation of “big data” streaming in from mobile devices, social media, sensors and other data sources.
An even bigger challenge is analyzing and acting on that data in real time. To address it, companies are making considerable investments to manage and integrate this information so they can gain much-needed insight into their business performance and ensure that proper fiscal and legal controls are in place. According to a report published in June 2011 by management consultancy McKinsey & Co., “Simply making big data more easily accessible to relevant stakeholders in a timely way can create tremendous value.”
As this demand for data increases, the costs to access it are also increasing. There must be some way to harness this data in a manageable, efficient way.
Get it Right the First Time – Start with Data Governance
There are many technologies to help ensure that data across systems is integrated and accessible – whether traditional databases and data management tools or emerging big data systems, such as Cassandra and Hadoop. But when it comes to policy and processes, there often is a lack of clarity on data ownership, access, usage and management. As a result, the data housed in these systems may not fit the accuracy requirements of the business. To tackle and overcome these issues, a company needs a formal data governance
What is Data Governance?
Data governance establishes the strategy, objectives, and policies for managing corporate data. It consists of people, processes, and the technologies required to ensure the data is accurate, consistent throughout an organization and available to users at the right times. It employs a central structure and requires representatives from business and IT to set policies on the format and use of core business data and changes to business processes and applications. Data governance strives to make certain that companies have reliable data sets so they can assess business performance and make good management decisions.
Why Governing Corporate Data Matters
Corporate executives have the most to gain by supporting a data governance program
. This is the only way to ensure ongoing compliance with corporate standards and regulations, and gain greater control and lower the risk of basing decisions on poor-quality data. It brings order to the data chaos and allows corporations to make decisions based on knowledge rather than gut instinct.
In real-world scenarios across various industries in which organizations have implemented data governance programs, companies have seen the following improvements:
- Better operational efficiency – 10% in one year, building to 40% by year three;
- A 50% reduction in new project initiation costs;
- Fewer duplicate records – down 30% in one year;
- Reduction in the time it takes to bring customers on board by 50%;
- Increased ability to respond to regulatory concerns, potentially saving up to $5 million in fees per incident;
- The ability to extend strategic programs, such as master data management and data quality initiatives.
Job No. 1: Take a Look Around
When beginning a data governance program, examine the methods the organization is using to manage data and determine how processes can be improved. Start by asking questions: Do you have the information you need to make sound, timely business decisions? Do you have confidence in your revenue reports? Can you track your organizational key performance indicators? Are you in compliance with all laws regarding your governance of data? The answers will provide insight into your organization’s data governance needs.
Getting started with data governance does not have to be a burden. By assessing your current data management processes, you may find that data is already being governed successfully in parts of the organization and that those processes can be replicated elsewhere. Then assemble a team of people capable of making decisions about data, identify business challenges that can be faced using that data and start governing.
Data governance is a first step in the journey of treating data as a corporate asset to empower your decision making and help run your business more effectively.
The operational risk and cost of regulatory compliance is too high to do nothing. Why wait for a fine before addressing your data accuracy? Why wait until your customers leave before recognizing them as a single buying entity? Be proactive. Data governance doesn’t have to be bureaucratic. Start small and focus on improving data accuracy within a well-defined scope and expand the governance program as benefits are recognized and efficiencies gained.
SOURCE: Why Execs Should Heed Need for Data Governance
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