Learn about the integral relationship between data quality and data governance, and how they work together to ensure that your data assets deliver insights that drive success.
Data is one of the most critical and highly valuable corporate assets within any organization. As humans continue to produce increasing volumes of data, the ability to consume it in a way that’s structured and meaningful is lagging. Research suggests that each person generates roughly 1.7 MB of data per second, with a significant portion of it being unstructured.
According to a Forbes survey, 95% of companies recognize managing unstructured data as a problem in their business, highlighting the significant costs associated with poor data quality. While data collection and utilization have grown over time, organizations have only recently recognized the need for better data quality.
With the explosion of cloud-based platforms and other technologies that have given non-technical resources the ability to produce and consume data, an organization’s need to better understand and trust its data has been brought to the forefront.
Although data governance may not be the most exciting aspect of business, it’s a critical component to ensure your business is making the best data-driven decisions it can from highly trusted data.
Why Focus on Data Governance?
Organizational leaders worldwide agree that data governance is important; however, many organizations lack a formalized program. According to a 2020 Dataversity report, only 12% of companies had fully implemented programs, while 38% of programs were a work in progress and 31% were just getting started. Historically, data governance was primarily motivated by regulatory compliance, with frameworks such as the General Data Protection Regulation (GDPR) mandating its adoption. But recently, decision-making and analytics have emerged as significant drivers. This shift has altered the requirements for data governance programs. Now, they must not only ensure regulatory compliance but also empower organizations to adopt a data-driven approach. Data is a critical asset for any organization, and implementing data governance programs aims to enhance data quality for better business decisions.
The Benefits of Control
Gartner defines data governance as “the specification of decision rights and an accountability framework to ensure the appropriate behavior in the valuation, creation, consumption and control of data and analytics.” However, data governance can focus too much on rules about what people can and can’t do with data. The goal should be to empower people to fix problems and find opportunities. When executed well, data governance can provide the following rewards for improving how your organization handles data:
1. Better Regulatory Compliance
Businesses most commonly begin thinking about data governance when they need to comply with regulatory policy. Examples of these regulations include GDPR, which changes the way organizations can collect, store, and transmit the personal data of EU residents; HIPAA, which mandates privacy protections for patient health information in the U.S.; and the U.S. Sarbanes-Oxley (SOX) law, which set rules for creating and maintaining corporate records to improve the accuracy of corporate disclosures. Data protection laws are already on the books or being proposed in several U.S. states. Such regulations require organizations to be able to trace their data from source to retirement, identify who has access to it, and know how and where it is used. Data governance sets rules and procedures around ownership and accessibility of data. Without it, sensitive information can get into the wrong hands or be improperly expunged, leading to governmental or regulatory financial penalties, lawsuits, and even jail time.
2. Increased Data Security
Along with the proliferation of data sources both inside and outside enterprises, data breaches are on the rise. A global study by Varonis found that 88% of companies with more than one million electronic folders don’t institute appropriate access limitations to their data, and 41% of companies have more than 1,000 electronic files containing sensitive customer data (such as health records and credit card information) open to all of their employees. These are data breaches waiting to happen. Data governance is vital to improving data security. Like regulatory compliance, data security hinges on traceability: knowing where your data comes from, where it is, who has access to it, how it’s used, and how to delete it. Data governance sets rules and procedures, preventing potential leaks of sensitive business information or customer data so data doesn’t get into the wrong hands. Such leaks can damage your company’s reputation and cause you to lose customers and revenue.
With insightful data governance rules in force, sensitive data in databases and systems can be tagged and managed appropriately. Enterprises can limit access to that information and determine the process for removing a user’s access quickly and comprehensively. In the event of a breach, the increased traceability can help you see what was compromised and where else in the organization that data is used. If customers request to have all their data expunged, a governance framework can determine all the locations and users of that data.
3. Improved Data Quality
Data governance also involves oversight of the quality of the data coming into a company, as well as its use throughout the organization. For example, data stewards, who own and manage the data, can identify when data is corrupt or inaccurate, when it’s not being refreshed often enough to be relevant, or when it’s being analyzed out of context. They can also identify data that’s in a silo and causing issues and set rules and processes that integrate it with other lines of business. For example, if the marketing team can’t access sales information, it might target the wrong communications to a sales lead that’s in a different part of the sales funnel. In addition, data governance can increase accountability for data, exposing where errors have been recorded or rules for inputting data haven’t been followed. All of these scenarios prevent situations that can lead to missed or bad business decisions, loss of business revenue, and increased costs.
Data governance can put business rules in place to ensure that information is current and correct. The ability to trust data is a cornerstone for data driven organizations that make decisions based on information from many different sources. Data governance can increase that trust; the key is to implement it well.
Get Started on Your Data Governance Program
Effective data governance not only ensures regulatory compliance but also enhances data security, improves data quality, and fosters trust in data across the organization. By establishing a data governance program, you can unlock the full potential of your data assets and make more informed decisions that drive business growth.
If you recognize the need for greater data quality and are interested in exploring data governance strategies, Concord is here to help. Contact us today to discover how you can get the most out of your enterprise data with airtight strategies for governing quality, access, and security.
