Data Governance and How Businesses Can Establish It
There is more data today than ever before.
It is becoming more difficult to manage data.
Furthermore, data is growing more complex.
In the business world, gaining insights from data is important.
Hence, this makes data an important part of a company.
Without it, companies struggle to make good decisions.
For this reason, companies invest heavily in analyzing data.
However, simply investing in data analysis isn’t enough.
More importantly, the data needs to be accurate.
Poor data management leads to unreliable data.
The challenge is for companies to make sense of the huge amount of data.
Additionally, the size of data makes data security vital.
Among important data includes trade secrets, financial data and customer information.
If these data fall into the wrong hands, it can spell trouble.
On July 2017, Equifax was hacked.
This was a result of their website’s vulnerability.
Over 143 million consumers personal information were exposed.
The impact it carries can affect a company’s reputation.
In times like this, data governance becomes an important solution.
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So, What Is Data Governance?
Essentially, data governance is a strategy.
So, it ensures data is properly managed.
In other words, it combines business strategy and information.
It focuses on the confidentiality, quality and integrity of data.
Also, it helps businesses meet regulatory requirements.
Ultimately, it ensures data serves the business purpose.
Therefore, businesses can maximize the potential of data.
It governs how information is generated, stored, used and maintained.
Adopting data governance creates an important cultural shift.
When change happens, resistance is inevitable.
Therefore, close cooperation between stakeholders must be present.
To make data governance successful, the business and IT department must work closely.
Today, many companies still hesitate to adopt data governance.
Why Is Data Governance Important?
Data governance is a relatively new term.
It has not gained much attention like big data.
However, this does not take away the importance of this strategy.
It helps businesses achieve the maximum potential of their data.
Here are several benefits of data governance.
It Saves Money
Fewer errors mean more quality data.
Data governance helps achieve this.
The formal policies define key rules and processes.
This improves operational efficiency.
Monitoring can happen around the clock.
This results in fewer errors.
Hence, it improves data integrity and quality.
You also avoid making costly mistakes.
From this, you save money.
It Reduces Risks
Businesses are constantly exposed to risks.
Therefore, organizations must minimize risks available.
One way to do this is monitoring data to spot problematic areas.
Structured data enable efficient monitoring.
Therefore, data governance can play a role here.
It improves data structure.
Also, it increases data reliability.
Having proper data governance tools also helps monitor business risks.
Additionally, customer information is growing rapidly.
Hence, governments enact laws to protect this information.
This pertains to how companies manage customer data.
Therefore, data governance make complying with regulations more convenient.
It Provides Clarity
Formalized data policies are important.
It improves the management of data.
More importantly, it results in accurate and standardized data.
Therefore, you can have more confidence in your data.
Also, the metrics will be more accurate.
Data governance also involves creating defining key roles.
Hence, businesses will have more clarity on accountability.
Seven Steps to Establish an Effective Data Governance Framework
- Analyze your business environment
- Ensure necessary data are available
- Establish a team
- Develop a data governance strategy
- Establish key roles for accountability
- Convert to a master data-based culture
- Develop a feedback mechanism
When establishing data governance, you never really start from scratch.
In fact, a company typically already have elements of data governance.
Now, you will learn how to put those elements together.
Then, you can create an effective data governance framework.
1. Analyze Your Business Environment
Firstly, identify your business strategy.
Then, align it with your data governance strategy.
Ask yourself these questions.
What is the business problem you are trying to solve?
How can data governance help you achieve this goal?
For example, your goal is to comply with regulations and policies.
Typically, there are certain regulations businesses must adhere to.
These requirements are well-defined by external organizations.
Hence, cooperation with other departments is important.
This helps you to consider the bigger picture.
You also need to consider the cultural and strategic requirements.
When starting out, you should narrow your focus.
Target specific data assets.
Identify the flaws in them.
Starting small helps create a firm foundation.
For example, start off with the human resource department.
They often deal with employment laws.
In fact, employment laws often change.
Keeping up with laws can be difficult.
Targeting the data assets of this department is a good start.
Hence, you can take specific actions to solve them.
Firstly, identify how data was managed.
Additionally, identify the current data architecture.
Then, evaluate the effectiveness of the system.
Discuss with the department.
Find out the flaws within the data assets.
Then, discuss possible rules to apply.
Reach a consensus.
However, this is easier said than done.
So, partner with another business.
This business should have experience with data governance.
You can consult them before you implement any steps.
Therefore, you can establish better data governance.
2. Ensure Necessary Data Are Available
Today, data-driven decisions are important.
Hence, the quality of data matters.
Data governance establishes a structure for data.
This results in highly reliable data.
When implementing data governance, problems may arise.
One of it includes lack of access to data.
This can lead to poor decisions.
So, necessary data must be accessible.
An effective data governance framework cannot exist otherwise.
Data access is an important issue.
Businesses today struggle to access certain data.
Data can exist in different forms.
Ideally, data only exists internally.
However, this is not the case.
It can also exist in external systems.
Data is typically cluttered.
In fact, it can be found across data storage systems.
Proper data governance can play a role here.
Use prepackaged integration components.
This enables data integration.
Hence, vital organizational data can be found in one place.
Also, organizations can gain access to previously inaccessible data.
Establishing this connection is essential.
It provides actionable insights for an organization.
With the help of technologies, data governance can be more effective.
3. Establish a Team
Data governance is an organizational responsibility.
Therefore, support from every department is vital.
Without it, data governance won’t be effective.
Furthermore, assigning responsibilities is important.
This determines who are in charge of implementation.
Start by brainstorming the key roles in a team.
Find reliable people to take up the tasks.
Then, brief them their responsibilities.
This helps them understand their roles.
Therefore, you must be clear about their tasks beforehand.
This avoids miscommunication and overlap of tasks.
Then, ask relevant suggestions for formal rules.
Pass on these rules to the IT department.
Their skills make it possible to structure a plan for data governance.
Also, they will assess the compatibility of the rules.
They can make changes as they see fit.
Then, they will apply the data standardization rules.
The rules will be tested on the targeted system.
This doesn’t stop here.
Business executives will monitor the results closely.
Inherently, this demonstrates the establishment of key roles.
More importantly, the IT department plays a vital role.
Without their capabilities, any data governance initiative will fail.
However, other departments play important roles too.
They need to ensure that data integrity is kept at a high level.
Ultimately, data governance is a team effort.
Therefore, teamwork is important to make data governance work.
4. Develop a Data Governance Strategy
Today, many development teams still struggle.
Establishing data governance strategies is not an easy task.
The strategies must improve the usability, shareability and efficiency of information.
Brainstorming how to position data resources properly can be time-consuming.
The common practices suggested must be implemented in a repeatable manner.
Here is a four-step process for data governance strategy.
Data Profiling Tools
Here, you will take a closer look at the organization’s data.
Data profiling is the systematic analysis of the data source content.
Understanding is key.
It helps you understand what you need to fix.
What isn’t broken can’t be fixed.
Therefore, you will analyze data against metrics.
This determines whether a data is good or bad.
Traditionally, Structured Query Language (SQL) is used for data profiling.
Today, you can utilize a data profiling software.
With this, you receive faster and more thorough analysis.
Parsing and Standardization
This technique restructures data into a common format.
As a result, it builds more consistent data.
This task is done by data analysts and data stewards.
For example, it is used to standardize and validate mailing address for different countries.
This refers to processes that improve raw data.
Admittedly, this might sound like a broad definition.
However, it gives us an idea of what the term is.
Essentially, it aims to improve data.
Through this, you can establish scoring and profiling results for data.
In fact, you can establish rules for these processes.
Earlier on, we have done data profiling.
The benefit of this is it enables data monitoring.
Over time, it enables an organization to analyze the risks they are exposed to.
It points out the areas of data which need improvement.
Corrective actions can be taken instantly.
5. Establish an Accountability Structure
Data governance relies on accountability.
Inherently, data governance also relies on people and technology.
Undoubtedly, data governance is a powerful strategy.
However, the rules are still set by human beings.
Therefore, people play an important role in maintaining data integrity.
It is not the task of the technology alone.
This means that it will have flaws.
Constant improvement is necessary.
Hence, this can be done through monitoring.
In fact, you can utilize powerful technologies to do this.
However, it is still susceptible to errors.
So, what happens is data integrity shows no improvement?
This is where an accountability infrastructure becomes important.
Specific people need to be accountable for data assets.
Identify key individuals for each data assets.
So, this enables you to apply corrective actions instantly.
This is because you have specific people in charge of data assets.
Additionally, equip them with the right technology.
This improves their capability to do their tasks well.
In fact, there are many data governance software.
Choose a good one that helps to supplement their efforts.
In the long run, you can achieve data integrity.
Productivity also can be improved.
Technologies can support ongoing data discovery and sustainability.
6. Shift to a Master Data-Based Culture
Let’s review what has been done so far.
We’ve established goals, assembled a team and put technology in place.
Now, let’s assume that these efforts yielded good results.
What can you do to maintain this success?
Shift to a master data-based culture.
Master data are essential data about your business.
It includes customer, suppliers, partners, products and materials data.
Shifting to this new culture is important.
This helps build a 360-degree view of the organization.
It is also beneficial in corporate mergers or acquisitions.
The data systems can be integrated easily.
Furthermore, business partnerships will also benefit from this.
An organization can provide actionable insights to their partners.
This can result in successful partnerships.
It also gives people confidence to work with your business.
Through data governance, information becomes synchronized.
The structure is important when dealing with clustered data.
In fact, it provides clarity for businesses.
When needed, stakeholders can access the system.
So, they will have a single view of information.
Previously, people had separate views of information.
This can cause miscommunication.
Clarifying any inconsistent information can be time-consuming.
Again, this can lead to costly mistakes.
Ultimately, data governance isn’t just an IT concept.
It is an organization-wide strategy.
Everyone plays a role in determining its success.
More importantly, it provides access to valuable and reliable information.
Now, businesses can realize the maximum potential of their data assets.
7. Develop a Feedback Mechanism
So, you have reaped the rewards of data governance.
Now, you have a better view of your organization.
Furthermore, you can capitalize on your data availability.
Proper roles are established in data governance.
People are clear about their tasks.
Accountability is the core of your data governance framework.
Therefore, you can make good business decisions around these actionable insights.
However, keep in mind that data governance is a continuous process.
Constant improvements are imperative for success.
One way that you can improve is by listening to feedback.
Therefore, establish a feedback mechanism.
Ultimately, employees maintain the software needed for data governance.
Also, their input is necessary to improve the strategy.
Understanding their point of view can improve the strategy’s implementation.
You can also involve different stakeholders in this feedback mechanism.
Through this, organizations can see how people are responding to the strategy.
Most importantly, it takes into account people’s feedbacks.
When their inputs are heard, they feel more appreciated.
This is vital as people will be more willing to align themselves with your vision.
Can Data Governance Work for You?
At its core, data governance is a powerful strategy.
However, its success relies heavily on the organizational effort.
Therefore, every stakeholder must be accountable for data integrity.
Furthermore, they must understand the importance of their roles.
Organizations change every day.
As they change, data will also change.
As businesses grow, they will be exposed to more risks.
However, businesses often make a major mistake.
Assessments often happen only once a year.
This can be detrimental to progress.
Changes in the industry wait for no one.
Businesses need to remain alert to changes.
This helps them stay one step ahead of others.
Hence, data governance can help them do this.
It enables organizations to evaluate growth daily.
However, some organizations are still hesitant to adopt it.
This is because they view it as a regulatory compliance procedure.
They fail to see how they can benefit from it.
Through data governance, an organization makes data work for them.
Additionally, it helps organizations to manage risks.
Keep in mind that this strategy is more than just about technology.
Its success highly relies on the human decision-making process.
If properly implemented, it can increase the quality of data.
Furthermore, it also documents an organization’s best practices.
Hence, organizations can make better and rational decisions.
Auditors and regulators will also be happy.
Proper data governance also retains customer.
New business opportunities can be discovered.
Last but not least, data governance is not a one-time strategy.
Instead, it requires constant work and improvement.
However, this is a strategy you cannot afford to ignore.
If done right, it can transform your business entirely.