In today’s fast-paced economy, businesses need to be on their feet at all times to adequately meet ever-changing customer expectations. This requires a mindset change towards viewing data — data they already likely own — as an asset that will decide competitive advantage.
In the digital age, it is inevitable that organizations already collect or have the potential to collect massive amounts of data — from vendors, customers, employees and everyone along the supply chain. Most organizations use it only for the specific purpose it is intended. Most others don’t use this data at all. Without the data management framework to leverage this data, these dataphobes are at a heightened security and compliance risk, as well as at a competitive disadvantage.
On the other hand, digitally aware organizations — also known as Datavores — are making data-driven operational decisions and leading their markets across the globe. They are mining their data to reveal insights that make their processes more efficient, their communication more effective and eventually their customers more delighted.
However, this doesn’t come easy. The sheer amount of existing data coupled with new information being added in real time put a huge strain on enterprise data management. A Harvard Business review report says that on an average only 3% of data in companies meets the minimum threshold for data quality. Most of the time, data users are either supplied with wrong or outdated data. Other times, the data is too confusing to be of any use.
A considered data governance program can fix most of these concerns.
What is data governance?
Data governance “is a system of decision rights and accountabilities for information-related processes, executed according to agreed-upon models which describe who can take what actions with what information, and when, under what circumstances, using what methods.”
Data governance provides a structure for making better use of the company’s data. It is an enabling framework that paves a way for both business and IT to come together to accelerate growth.
Data governance creates a model that provides the rights and accountabilities for all the data related processes.
All stakeholders agree upon what information can be accessed by whom and when, using what methods, eliminating the confusion and mismanagement occurring in data management.
What drives data governance?
If you’re not yet convinced, here are four factors that are driving data governance in large organizations today.
Compliance: As the data in the digital age grows, concerns about security and privacy will grow in parallel. This would lead governments across the globe to lay down standards for data management.
Data quality: IBM estimates that bad data costs companies in US about 3 trillion dollars a year. As competition intensifies, this would be too big a risk for organizations to afford.
Process efficiency: Easily accessible data means that lesser time is spent on searching for it, leaving employees more time to engage customers meaningfully.
Customer service: Having the right information available at the right time is crucial to providing a good customer experience, which leads to trust and loyalty.
A good data governance program can positively impact a business across many levels. With data governance, costs of managing the data is reduced. Easy tracking and monitoring of data ensures that data quality is consistently upheld. A robust data governance framework will be compliant, make data and processes transparent, thereby increasing trust and productivity among business users.
Yet, a program of this scale isn’t without challenges. For more about what are the commonly faced challenges of implementing a data governance program, and ways to overcome them, read our post here.