Why Every Company Needs a Data Governance Strategy

How does your company produce, store, and manage its data? In 2021, companies cannot afford to neglect data, which can be used for strategic insights and competitive advantage. Data governance is a core exercise that your company should practice in every data-related activity.
10 min read
1/03/21
By Oleg Kapustin
Data Management Solutions Architect
By Darina Tkachenko
Managing Editor
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Why Every Company Needs a Data Governance Strategy

“Once we know something, we find it hard to imagine what it was like not to know it,” Chip and Dan Heath wrote in Made to Stick. The quote accurately summarizes the change a company sees after it creates a comprehensive data governance strategy.

By 2021, most organizations have learned this lesson. Businesses should consistently plan how they use data in order to extract business value from it and remain compliant with an ever-increasing regulatory burden (hello, GDPR!). In other words, you need strong data governance and data analytics strategies that can be applied across the board.

While each company evolves on its own path, most companies that extract value from data follow these principles:

  • They manage data like any other corporate asset
  • They make their data strategy part of the overall business strategy
  • They harmonize data management practices across the whole organization and continually improve them.

In this post, we’ll explore the key principles and goals of data governance and explain why any organization, regardless of business vertical or size, can benefit from a comprehensive data governance strategy.

Data Governance: Definition and Basic Principles

According to DAMA Dictionary of Data Management, “data governance is the exercise of authority, control, and shared decision-making (planning, monitoring, and enforcement) over the management of data assets.”

Forrester’s VP and Principal Analyst, Michele Goetz, gave a similar definition of the term:

Data governance is a strategic business program that determines and prioritizes the financial benefit data brings to organizations as well as mitigates the business risk of poor data practices and quality.

Data governance (DG) ensures the company’s data is properly managed without actually executing data management. A successful data governance program is based on three pillars: people (company stakeholders), processes, and technologies. It contains a compilation of company-wide, company-specific policies and standards that describe what is governed, why, and the methods used, as well as who is governed, and by whom.

Without data governance, data-related errors and inadequacies go unnoticed, which can negatively affect a company’s BI and analytics. Furthermore, data across different corporate systems remains inconsistent. For example, customer details (name, emails, address, phone) may be recorded differently in sales, logistics, and customer relations management systems, preventing company-wide data integrity.

There is no “one size fits all” approach to data governance. How the company governs its data assets depends on its business goals, challenges, resources, its distinctive organizational and cultural features. Data governance strategies mature over time, iteration after iteration, until they comprehensively define the scope and approach to governance: how the data is produced, collected, stored, processed, consumed, and shared.

Deliverables of a Data Governance Strategy

In practice, implementing data governance requires tools and technologies that enable productive collaboration of data owners and other stakeholders in data management activities. As a custom software development company, DataArt can help your organization find the right tools to put a data governance plan into action.

Discuss Your Data Governance with DataArt’s Experts

Key Goals of a Data Governance Program

Goals, principles, and policies described in data governance artifacts pave a way toward the company’s desired future state. In addition to guiding all data-related activities, data governance serves other important goals, including:

  1. Allowing a company to manage its data not as a by-product of business operations, but as a valuable asset
  2. Defining, sharing, implementing, and following company-wide collaborative policies and protocols in data management
  3. Overseeing and monitoring data integrity, compliance, and security.

Like any corporate change, the implementation of a data governance strategy should by sponsored by senior stakeholders. The key to successful DG lies in consistent efforts by these stakeholders and other data owners who can align and improve data-related activities in the interest of sustainable business growth. To illustrate the timeframes for implementation and to outline spheres of responsibilities and ownership, consider creating a data governance roadmap.

Why Your Company Can Benefit from a Data Governance Strategy

Data management is often challenging to companies, regardless of their business focus or domain. Some of the common issues include:

  • The lack of standardized, company-wide approaches to data management
  • Heterogeneity of legacy systems and technologies
  • Misalignment of stakeholder ideas.

Data governance is a continuous, iterative process of getting leaner and cleaner data for better decision making and improved business outcomes. That is why companies that have just started their journey toward becoming data-driven, or ones operating in industries with strict compliance regulations like finance or healthcare, have the most serious need for a data governance strategy.

Data governance strategies enables an organization to:

  1. Define internal standards for data quality and usage
  2. Estimate the cost of data
  3. Increase business value of data
  4. Reduce the operating expenses
  5. Share responsibility for data-related decisions
  6. Introduce and consistently follow compliance standards
  7. Improve internal and external communication between stakeholders
  8. Ensure business continuity by managing and mitigating risks.

Only company-wide efforts can propel data governance to an advanced level – these approaches simply are not effective if they are isolated or siloed in individual departments. All stakeholders involved in data governance should encourage an organizational culture of treating data as a valuable corporate asset. In many organizations, however, it is this cultural change that poses the largest challenge.

Governing Data Requires a Commitment to Change

As more companies realize the benefits of data-driven decision making, they strive to tie analytical insights to internal company-wide standards and policies. Transforming into a data-driven company requires a cultural shift from inside an organization. Part of this transformation – establishing a data governance strategy – should first occur in the minds of the stakeholders.

The corporate strongcultural shift refers to the way data is perceived and used. When managed properly, this asset helps the stakeholders act proactively and mitigate the risks, which, in the long run, increases overall revenue. But data governance cannot be implemented instantaneously. It requires sustainable efforts to ensure your company gets real value from its data.

Features of a Good Data Governance Program

Data governance strategies will not be effective unless there is internal buy-in from management and other senior stakeholders. In DataArt’s experience, it takes between half a year to a year and a half before data governance becomes a habit. At that point, all stakeholders involved in data-related activities have comprehensively adopted a chosen data governance model.

Like any corporate change, new data governance procedures are prone to internal resistance and a learning curve. That is why management must be the first to change its approach. The company will inevitably evolve as the plan is enacted.

Wrap-up

As a part of our Data, BI, and Analytics offerings, DataArt’s experts provide consulting services on data governance and quality management. We have helped our clients define value-driven, business-led data governance frameworks that support data quality, security, and integration at their companies. Contact us if your company requires assistance with data governance practices.

Discuss Your Data Governance with DataArt’s Experts

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