You are here

Data Governance defined & why it is crucial to the organisation

Introduction

According to The Data Governance Institute, Data Governance is "The organizational bodies, rules, decision rights, and accountabilities of people and information systems as they perform information-related processes”. But, what data governance means exactly and in which context it should be used is not always easy to understand.
 
Most of the organizations now realize that information and information management are critical factors to achieve their strategy and objectives but also to ensure their survival. But due to the growing complexity of the information landscape, local data management is not enough and it is necessary to organize the decision making process at corporate level and to define central roles and responsibilities. The objectives of such an initiative should be to control the quality and the usage of the information. This is exactly what a Data Governance Program should be aiming at.
 
In this insight we will describe what a governance initiative is, before focusing on the case for Data Governance. We will also discuss why organizations need a Data Governance initiative and what can be expected from it.

Governance: Decide how to decide

Before diving into the specific case of data governance it is important to redefine what a governance program is and what its main objectives are.
 
A Governance program is used to define the decision making processes and authority around a specific domain. In other words a governance program is about deciding how to decide in order to be able to handle complex situations or issues in the future in the most controlled and efficient way possible.
 
All governance programs are sharing the same goals:
  • Enable decision making
  • Reduce operational friction
  • Protect the needs of the stakeholders
  • Train management and staff to adapt common approaches
  • Build standards and processes
  • Reduce the costs and increase the effectiveness
  • Ensure transparency
Usually Governance Programs appear in an organization when it reaches a certain maturity level. In that case it will be necessary to align the existing rules and processes of different groups by using the following principle:

Data Governance

  • Creates and Aligns Rules
    At first, the Governance program will help in the definition of global rules by coordinating and balancing the need of all the stakeholders. It will define the decision process as well as the roles and responsibilities of all the stakeholders involved.
  • Enforces Rules and Resolves Conflicts
    The Governance program will then make sure that those rules and processes are used and applied correctly by all the stakeholders. If necessary they will be enforced. The Governance Program will also help to prevent or resolve conflicts by providing ongoing services.
  • Provide Ongoing Services
    Finally the Governance Program must support the stakeholders in the application of the processes and rules and by identifying any new opportunities to create new rules or to align or adapt existing ones.
Finally, and maybe one the most important aspects of a successful Governance Program, it must help the organization to achieve one of the following objectives: Increase revenue and value, Manage Costs and Complexity or ensure survival through attention to Risk and vulnerabilities.
 

The case of Data Governance

Data Governance is the application of those principles on the data related matters in an organization. It provides a structure to evaluate, control, manage and protect the data within an organization by defining clear roles and responsibilities and decision making processes at enterprise level.
 
Ideally it should be positioned between the business and the IT groups.
 
A DG Program might have a focus on the following areas:
  • Policy, Standards, Strategy
    The DG Program will contribute to the definition of a data strategy and will ensure that consistent policies and standards are used within the organization. It will steer the creation of new policies and standards and work on the alignment of the existing ones. It will finally monitor that those policies and standards are correctly used with the organization.
  • Data Quality
    The DG program will set the direction for the Data Quality Program. It will help the organization to define and monitor the quality of its data and help to establish ownership, decision rights and accountabilities to ensure the quality, integrity and usability of the data.
  • Privacy, Compliance, Security
    Depending on the industry of the organization this area might be more or less critical. In any case the DG Program will help to protect sensitive data and enforce the legal, contractual or architectural compliance requirements. This will help the organization to control and limit the risks on its data.
  • Architecture, Integration
    In this domain the DG Program will mainly have a support role by bringing cross-functional attention to integration challenges. It will support initiatives like metadata or master data management programs and help in the definition of architectural policies and standards in order to improve systems integration.
  • Data Warehousing and Business Intelligence
    The DG Program will help to enforce rules and standards in the various source-systems of the organization, which will affect the data warehouses and business intelligence data by providing better quality data. It will also help to clarify and promote the value of the data related projects in general.
  • Management Alignment
    The DG Program will promote and measure the value of any data related projects & initiatives towards management. It will help management to align the different initiatives and monitor for them the data related projects.
Depending on the organization and its challenges the focus will be made on one or more of those areas but they should all be part of a unique Data Governance Program to be efficient.
 

Why an organization would need a Data Governance Initiative

Organizations might need a Data Governance Program for several and different reasons. In all the cases, the framework that is set by the DG Program will aim to control and reduce the risks around the data as well as help the organization to use the data to develop new opportunities.

Limit the risks

During the last few years, one can find dozens of examples of organizations which have had serious data related issues going from data quality issues to data theft. In most cases they have encountered those issues because of a lack of data management procedures. A data governance program could help the organization to coordinate those aspects and to limit the risks linked to them.
  • Information quality
    A Data Governance program, by enforcing data standards and definitions and coordinating the data quality effort, will limit the risks around data quality issues. To have common data definitions in an environment where the data quality is known and under control will limit the risk that wrong decisions are taken based on incorrect data and will improve internal and external communication. For example, on a regular basis organizations –even publically quoted companies- need to republish financial statements due to data quality issues.
  • Legal standards
    More and more the organizations need to comply with legal standards and regulations. The process to apply them in an organization is not always easy and the consequences of an incomplete or incorrect application might be severe. By defining clear roles and responsibilities but also by positioning it as coordinator of the data related topics, a data governance program will participate to the correct application of those standards within the organization as well as to their control.
  • Data loss/thef
    When an organization is the victim of a data loss or theft the enquiry following it quite often finds out that this has been possible because of a weak or missing security. In large organizations it is not always easy to make sure that all the people have access to all the information they need and only to those. By helping to define clear data ownership as well as clear security policies and best practices corporate wise, a data governance program will help to limit those risks.

Develop new opportunities

But a Data Governance program should not be seen only as a way to protect the organization against certain risks; it should also be seen as a way to develop new opportunities and to be a strong asset in case of any business transformation or integration.
  • Business Development/Transformation
    An organization where, thanks to a data governance program, data definitions and standards are shared and where roles and responsibilities around the data topics are clearly defined and accepted will be able to be react and to integrate any business transformation or development. To have well defined data management processes will allow the organization to adapt them very efficiently and with limited costs.
  • Acquisition/Merger
    In case of the acquisition or the merger of an organization having a mature data governance program will bring value to the company. In case of an acquisition/sell-off, to have a complete and detailed view on data and their content will help the organization to justify its value. As such it can also be seen as an asset for the organization.
    In case of a merger, the costs involved will be significantly reduced if a data governance program exists in both companies. It will be easier to identify and address the data, process & information integration related issues and to define and apply the necessary changes in order to integrate the new organization.
  • Performance Management/Business Intelligence
    Finally, a data governance program will help the development of any Performance Management or Business Intelligence initiatives within the organization. By defining clear ownership of the data and by controlling their quality it will reduce the costs and complexity of their implementation and help them to deliver trusted and accurate data in the desired timeframe to the user community.

Conclusion

More and more organizations start to recognize that they need better data management processes in order to control and to protect the investments made in data & systems, to reduce the costs linked to them and also to transform them in a real asset for them.
 
A data governance program will help them to achieve that and different models -developed by recognized institutions (Data Governance Community of Practices, IBM Data Governance Council) -exist on the market in order to achieve that. Slight differences exist between these approaches but they all share the basic principle of what a data governance program should do: "Defining how to deal with data related issues".
 
The scope of a Data Governance program can be very wide and need to be carefully defined in order to provide the benefits the organization is looking for. It also requires specific expertise in order to implement "data governance” in a successful way and to transform the data existing in the organization into a real asset.