What is Data Governance and Why is it Important to your Business?
The power that data holds in driving businesses cannot be over-emphasized. Data-driven insights influence most decisions in an organization, and just like your finances, data needs proper management.
When critical data is disorganized, your business will likely face penalties for not complying with regulations; not to mention the rising costs for storing and managing duplicate data, among other expenses. To minimize such risks, you need proper data governance.
At Onyx, we have in-depth prime contract experience helping our Federal Civilian and Defense clients with the governance of information in their enterprise environments. We specialize in the development and enforcement of the rules to meet their requirements, and leverage our expertise in data management to ensure that data are secure, accessible, and trustworthy.
But what is data governance? Why is it important to your business? Let’s dive in and explore:
What is data governance?
Data governance is a series of processes that work to ensure that important data is well managed. It includes internal policies and procedures that ensure efficient use of information to enable an enterprise to achieve its goals.
Put more simply; it governs usage, storage, protection, and overall management of organizational information. Data governance defines who can take what action, upon what data, in what situations, using what methods.
This definition gives us three main ingredients of data governance:
- Rules- These are accepted stylistic guidelines and accepted definitions for data input and maintenance.
- Enforcement of the defined rules. What happens if data is entered against the rule? Does the system autocorrect, or will it provide a nudge?
- Management of the data – Overseeing the rules and enforcement is data stewards. They monitor processes to ensure that data is always in accordance with the rules, as well as suggesting any improvements needed.
When the above three factors are present and functioning together within a company, you have good data governance.
So, why is data governance important?
Where effective data governance is absent in an enterprise, there is poor data. Poor data manifest in duplicate entries, inconsistent definitions, missing fields, and other data problems. Solving these issues benefits a company in the following ways:
- Data governance saves money
Robust data governance increases efficiency. This is because time previously lost working on data in duplicate accounts in marketing, sales, HR, or operations is saved. Errors in your database are also reduced, creating a solid database that produces results faster. When you save time, you save money.
In addition, data governance encourages a business to make clear definitions of their most important data, and the rules governing it. This is a terrific opportunity to bring everyone in the company on the same page, which results in increased operational efficiency.
- Bad data governance poses security risks
Often than not, outside security risks are associated with dirty, unstructured data and regulatory compliance issues. In a messy database, it is not easy to tell when something is amiss. Also, you cannot monitor the data which is at risk efficiently. Data governance processes and tools make it easier to monitor your database and make it easier to flag problems.
- Good data governance helps you stay compliant
Data regulatory compliance has become a hot topic now as never before. People and enterprises are becoming increasingly aware of their data; and therefore, governments have come in to regulate how companies store, use and protect their customer’s data
For example, the General Data Protection Regulation (GDPR) came into effect in the EU in early 2018. It gives the residents in the EU more control of their data, including the ‘right to be forgotten’. This right allows customers to be able to request businesses to delete all their information from an enterprise database. Without proper data governance, you put yourself at risk of being sued for non-compliance.
- Good data governance provides clarity
Effective data governance gives you the assurance that your enterprise's data is clean, accurate, and standardized across the entire organization. You will have peace of mind that the most important metrics are accurate, and therefore greater confidence in your analytics.
- Better analytics and decision making
Good data governance ensures that data is usable, free of inconsistencies and errors. When data has integrity and is usable, it can create better analytics, which translates to better company decisions and improved operations.
- Ease in sharing data
Imagine a messy filing cabinet where millions of paperwork surround you, and you can’t easily trace what you want. The case is not any different when your digital data is scattered all over, and someone is waiting on the other end to receive a file. Data governance structures and tools come in handy to help you find and share files easily within the organization and other collaborators outside the enterprise.
Objectives of a strong data governance framework
The benefits of a data governance framework are evident, as we have discussed above. However, there are some more specific organizational data governance objectives that you should keep in mind when creating and implementing a policy for your enterprise.
Every organization will have a different plan due to different goals, but there are a few common guiding objectives that you should remember in this process. They include:
- Proper data usage
This objective safeguards organizational data from errors, and the misuse of sensitive company and personal data. The best way to implement these objectives is to create clear policies on who should use what data, a means to monitor and enforce these policies, and what to do if these measures are not followed.
This is a default when it comes to data governance, but there’s no harm in reminding you that this is something you should do in the entire data lifecycle. Else you will find yourself facing harsh penalties for being careless with your data, including the damage data leaks do to your organization’s reputation. Fines related to poor data governance range from 4% of an enterprise's turnover and even more.
- Improved data security
Data governance ensures that all enterprise data is secure, there is no unauthorized access and, if there is a breach in security, it is easy to detect and fix.
- Creating and enforcing data distribution policies
While data distribution policies are related to data security, this is an objective worth emphasizing on its own. Good data governance should stipulate how an organization's data should and can be distributed, and access levels to any person who has access to the data.
In a world of big data, you would likely want to monetize your data. Data governance helps make the most of this. You will be able to reap better insights, segment your data and reach the intended audiences for profit (if only you have good data governance policies in mind, and if your departments are collaborating towards this common goal).
- Efficient maintenance
Making rules, organizing, and implementing data governance structures is only one step. To reap long term benefits, a data maintenance plan has to be put in place. This plan will help the data governance manager stay efficient in their day to day duties. The maintenance plan will help the organization avoid redoing some tasks or working on something that hasn't gotten enough investment thought.
In data governance, you govern for outcomes. You must measure how well your policies achieve sustainable and situational goals. For instance, to measure data quality, you will need to monitor data processing steps, track business process failures, and finally benchmark the impact of systematic failures on data delivery.
Considering these objectives as you create and implement a data governance framework will make the process easier and more effective.
Who to include in data governance
Having a data governance team is imperative in the success of your data governance objectives. Core teams in data governance are built differently depending on an organization's needs, but the key positions include:
- A data manager/data steward who leads the design and implementation of data governance policies and systems. They also lead staffing for the data governance team. In many enterprises, this role is given to the Chief Data Officer. However, it is imperative that there be a dedicated position for a data manager for data governance.
- A data governance architect is responsible for oversight of designs and implementation relating to data governance.
- A data strategist who comes in handy in implementing strategic plans regarding the organization’s data
- A compliance specialist, who ensures compliance with all regulatory standards.
In addition to this core team, other stakeholders to be involved in data governance decisions are finance executives, marketing leads, the CIO, sales leads, operations, IT Management, and the board of directors. Involving everyone leads to better data governance outcomes.
In the contemporary world, data is the organization's lifeblood. This calls for good data structures, secure data storage, maintenance, proper access, and distribution. With the right data governance tools, these processes will become less problematic.
Remember that data governance is not a project but rather is a practice, meaning that it will consistently evolve and develop. Data governance is also holistic process. It should involve all departments, from sales to operations and most importantly the IT department.