Organizations have, over time, enhanced their capability to collect and process data. As the volume and number of sources increase, it becomes extremely important to implement data governance.
Data governance affects every aspect of an organization’s information management system. It affects how you create, collect, use, retain, and archive data to the software, hardware, and databases your organization uses to handle data.
98 percent of business professionals consider data governance important. However, only 48 percent of organizations have a data governance program in place according to a different study.
The good news is that 29 percent of them were in the early stages a roll-out, while 19 percent were researching the best program for their company.
Lack of data governance leads to poor data manifested in missing fields, duplicates, inconsistent definitions, and others. Failure to solve these issues makes organizations miss opportunities and never to achieve a proper return on investment.
Data governance increases efficiency as the company clearly defines core data and rules that govern it. It leads to operational efficiencies, good decision making and improved experiences for customers.
What Is Data Governance?
Data governance is the controlling and planning of data management, the use of data, and other resources related to data. It includes technologies, processes, and people needed to manage and protect data assets in a company.
Proper data governance guarantees that corporate data becomes understandable, complete, correct, secure, trustworthy, and discoverable.
Data governance is, at its core, about establishing responsibilities and processes on how an organization standardizes, integrates, share, protects and stores corporate data. All this while ensuring individual confidentiality and privacy.
The DAMA-DMBOK2 Guide Knowledge Area Wheel describes this as the 11 data management knowledge areas.
Image Source: The DAMA-DMBOK2 Guide Knowledge Area Wheel
Organizations must work to minimize data risks, have internal rules governing data, comply with requirements on data handling, improve communication both internally and externally, increase data value, facilitate the handling of data, reduce cost, and ensure the sustainability of the company through optimization and risk management.
Data governance is crucial for data-driven companies. Governance involves managing and defining different data categories and types. It may include information on:
Think of it as quality control over data. With it, your company has consistent and reliable data you can use to make data-driven decisions.
Why Should Businesses Care About Data Governance?
Data has become crucial in determining whether a company succeeds or not.
Organizations also interact with consumers on different channels, thanks to digital transformations. They collect lots of prospective and current customer data from these channels. Data collected is then used to create brand awareness, gain leads, and drive purchases.
Having enough and accurate information is, therefore, crucial for effective data-driven marketing. However, companies suffer from data errors for common reasons such as missing data, inaccurate data, and outdated information.
This level of inaccuracies is worrying, considering that the organizations need data to improve customer interaction and business processes.
The main cause of inaccurate data is human error. As employees enter data manually on different channels, the risk of human error increases leading to poor data. This level of inaccuracy happens mostly due to the lack of a sophisticated data governance strategy by many organizations.
Image Source: Experian
The risk of poor data, duplicate data and data breaches is high and expensive for companies.
Consider this: your company spends huge amounts of money on software, hardware, information systems, IT staff, and many other data system management aspects. Money and time are also spent on other areas like ads, emailing, making calls and maintain the data systems.
Without a coordinated and sophisticated data governance program, your organization will be collecting redundant and contradictory data across channels and programs. The poor data then costs money in terms of cleaning it up, poor decision making, lost customers, fewer conversions, and reduced profits.
It’s good to remember that it takes $1 to verify one record, $10 to clean it up, and $100 if the company decides not to act on that one poor data. It’s the 1-10-100 rule, according to data scientists. If data is not reliable, valid, accurate, and timely, then it puts the business at risk.
Data-driven marketing is crucial for marketers looking to succeed and stay above the competition. Seventy-eight percent of marketers say data collected by their organizations help them increase leads and conversions. Good data powers businesses to increase revenue, serve customers better, and enhance marketing efforts.
Image Source: Experian
Businesses need systems and processes for managing data. They need procedures that ensure consistent data governance daily.
Data governance means more than just cleaning, storing and consolidating data. It lays out principles and practices to ensure an organization has quality data. Data that the stakeholders can identify and use to meet their information needs.
A framework of business rules, policies and assets is designed to manage, enable, and activate data. It’s also a continuous process that becomes well developed with time.
The framework controls data standards and delegates required responsibilities and roles within the organization and the business’s operational ecosystem.
Implementing Effective Data Governance
Ensuring that your data is fit for your organization’s purpose starts with building a data governance program.
It also means the ability to comply with laws since the organization has clear data control processes aligned with business rules. Data governance ensures you have the processes in place to control data and meet all regulations.
The Right People
Even with all the data your organization collects, you still need people to manage and effectively support the organization’s goals.
The data team owns and defines data assets to meet your organization’s needs. They align your data governance strategy with your business needs. They monitor data consistently to ensure it complies with regulations. They also empower the business to make data-driven decisions.
Most companies hire a chief data officer (CDO) to oversee governance while others have people with other responsibilities act as the CDO too.
The CDO takes charge of data governance, but best practices involve ensuring that the governance strategy aligns around business users. This way, everyone gets involved in data governance. They become accountable and work toward the organization-wide strategy.
The Right Processes
There should be clear definitions around data storage, how it’s leveraged and how the organization interacts with it. This level of control allows users to understand data, monitor it, and resolve issues effectively and quickly. It also ensures compliance.
Implement powerful control, monitoring, and auditing processes within the organization. Clear data processes save money and time. They help the company leverage the data collected.
Understanding the business drivers and outcomes helps build a successful data governance practice. Take your time to understand what kind of outcomes you expect before implementation and the organizational culture.
The information generated, managed, and used in analytics is related to those outcomes. Recognize your outcomes, then create a strategy around them.
The Right Technology
Selecting the right technology will play a great role in helping you execute the data governance strategy. The right software will help you enforce rules that help your organization report, monitor, and maintain data quality.
The tool will help your teams collaborate and gain insights. They will define data, apply definitions across databases, and establish the trustworthiness of the data.
Once you develop these three data governance areas, you can become data-driven and compliant.
Steps To Effective Data Governance
1. Ensure availability of data assets
To govern data, it needs to be available. Create a holistic view of all your data assets, including your CRM, ERP, data warehouses, EDI transactions, partner systems, legacy structures, etc. You should have access to all the data your company owns.
2. Develop a data governance policy
The policy defines guidelines for effective governance of the organization’s data. It should cover:
3. Choose a technology
Select an intelligent data platform with broad capabilities for data quality, analytics, and governance. It should:
4. Implement the policy
Data governance takes some time, so start with the most important processes. For effective implementation, target specific areas.
Do not be tempted to handle all issues at once. By targeting specific areas, you can scale and take implementation across the enterprise. It also becomes easy to follow through.
Before implementing, access areas where the improvement can bring the most benefits immediately. Consider factors like impact on business, regulatory requirements and business priorities.
For example, data governance in customer relationship management can improve your call center, reduce duplicate or lost information, multiple mailings, and wrong addresses.
Ultimately you reduce customer frustrations while dealing with your brand and improve the experience across touchpoints.
Establish an infrastructure of accountability to hold people accountable for information assets. They should have the correct technology to ensure that the data assets integrity remains high.
5. Continuously access progress
Data governance is an ongoing process. Regularly assess whether your technologies and processes are working perfectly or not and whether you need any adjustments.
Continuously improve and ensure data integrity by carrying out processes like profiling, data enrichment, monitoring, and standardizations. Doing this ensures you work with good quality data at all times.
6. Adopt a data governance culture
Once you have the people, processes, and technology in place, change the culture of your organization. This helps maximize data availability, assigns accountabilities and improves the integrity of data.
Remember to keep improving processes through monitoring assets continuously. With monitoring, teams work with real time data. They can depict failures and successes in the process and make necessary changes or improvements.
The success of your data governance program will depend on your employees. If they know and understand their roles and responsibilities, they adapt fast. They also must be supported by good technology that makes it easy for them to perform their tasks.
How Data Governance Drives Data-Driven Marketing
Implementing a governance system ensures data accessibility, activation, and confidence. Stakeholders have access to trustworthy data they can use to make decisions. Employees can improve their interaction with customers, and customers get great experiences across platforms.
Image Source: First San Francisco Partners
1. Better data quality
Companies collect loads of data, but all this is useless if it’s not usable or relevant. The quality of data is more relevant than quantity. Having a governance program ensures that everyone works to ensure that data is good.
With governance, data gets cleaned, purged, and updated regularly. The process can take time, but once done, the company works with clean data that helps them achieve goals.
2. Eliminates data silos
Most companies have different departments running different software. Individual employees key in the data on each platform, and every department keeps this information to themselves.
Colleagues from other departments cannot access the data making it hard to have a 360-view on the customer. They cannot use this information to improve processes, to keep up with the changing needs of the customer or to offer seamless experiences.
Data silos cause numerous problems, including sending the right information to the wrong client, sending emails twice or to the wrong customer, sending the wrong recommendations, asking payment from a customer who already paid, and so much more.
The customer feels annoyed and feels like the company is not taking the time to understand their needs. They are taken around and around in circles when they need help, which aggravates them leading to churn.
A study by PWC found that 59 percent of consumers will walk away from a company after having several poor experiences and 17 percent after one bad experience. 32 percent will completely stop doing business with the brand.
The consumer does not want to spend hours trying to solve a problem or getting their billing issues fixed. They expect companies to offer great customer experiences and to resolve their issues immediately.
Image Source: Genesys
Eliminating silos gives the sales or customer care rep to time to a customer’s previous complaints before giving them a call; the marketing department passes on sales-ready leads to the sales team; the customers receive great experiences.
The company shares information easily between departments.
An ERP or CRM system can help the organization take control of data. It integrates well with other platforms, and data is available from one platform for easy access from concerned employees. The staff has access to all the resources they need to achieve their goals.
3. Data consistency, reliability and sharing of insights
Data governance gives your organization repeatable, reliable and consistent data. You define metrics that are consistent and that everyone in the organization knows. Even the non-tech employee knows what a unique visitor or high conversion rates mean.
When teams work with different data sets, they reach different conclusions, In turn, this makes decision making difficult. With consistent data, users can rely on data provided to reach data-driven conclusions.
Collaboration means that the different teams share the data burden. They are responsible for it and they can also share any insights received. Thus, employees maximize resources and company time.
The analysis of data from one team can lead to relevant insights for a different team. For example, insights from the marketing team help the IT department improve website usability, leading to more inquiries. The research and development team uses insights from the customer care team to improve products.
4. Boosts accountability
Data governance fosters accountability. The CRM your company adopts should be accessible to all users to ensure transparency. When an employee updates or deletes data, others in the system know immediately and see who performed the changes.
Users can see where errors have happened, or where rules for storing or inputting data need evaluation. Those with more experience or those in IT can step in immediately and assist in preventing any serious issues.
Governing data with a set of rules weeds out inefficiencies, and boosts collaboration in the organization.
5. Security and compliance with data governance laws
According to research, the cost of non-compliance with data laws is 2.71 times higher than that of compliance. It leads to operation disruptions, revenue loss, loss in productivity, fines, penalties, and settlement costs.
Image Source: Global Scape
The General Data Protection Regulation (GDPR) imposes huge fines on data processors and controllers who fail to comply.
Effective data governance will protect your organization from issues of noncompliance. You will have defined how data is acquired, backed up, stored, and secured against, misuse, theft or accidents. The definitions will also include audit and control provisions to ensure everyone follows the procedures.
Your organization will have conducted awareness campaigns to ensure every employee knows what is expected of them, the importance of governance and the rules. Awareness and education are important, especially when self-service solutions continue being implemented and the levels of data insecurity increase.
6. Save on cost and make more money
Data governance saves your organization money. It can also assist in revenue generation.
Governance generates value and revenue since companies can better understand their data. Leveraging data helps companies get better insights to make decisions, improve their relationships with customers, perform targeted campaigns, improve customer experiences and boost retention rates.
Image Source: Experian
7. Improves confidence in business processes
Data governance builds confidence in assets at the company. It ensures that the company can trust the data they use to make strategic decisions, reduce risks, and innovate products.
Without confidence in the data, employees resort to manual processes. They supplement information, which leads to errors.
A lack of trust in data increases the risk of noncompliance and regulatory penalties. The organization starts making educated guesses when making decisions or relying on their gut feelings. It also leads to reduced customer loyalty.
A data-driven company needs to trust its data. It needs to implement data management practices that govern and control how they distribute data.
Data governance ensures that the company works with accurate data. The organization can explain to stakeholders and employees how they are improving their processes with data. There is greater confidence in decisions and choices made by acting on real-time insights.
Governance ensures that the business operations follow relevant privacy policies, security guidelines, and comply with relevant consumer information regulations.
Conclusion: Why Data Governance Is No Longer Optional
The amount of data organizations handle makes it essential to have an appropriate data governance strategy. Its implementations should involve the right tools to ensure data integrity, correct documentation, ease of use, security, compliance, and confidentiality.
By not having a good data governance strategy, you open your organizations to risks of cyber attack, data breaches, misuse of data and hackers. It would also take time to realize the data breach since you have no data governance strategy in place.
Data is the lifeblood of organizations that want to improve customer experience and run their processes better. Data governance enables business processes to run smoothly.
