Many businesses are starting to see the benefits of capturing quality data. With data, businesses make better, more informed decisions; strategically approach problems; invest in the right things; and so much more. This is great but raises a question. Where should businesses truly begin as they embark on their data journey? We believe it starts with governance.
Did the hairs on your arm stand up with excitement as you read that last sentence? I didn’t think so. I know, I know. Governing data isn’t the sexiest thing. But it is vital and we at SingleStone believe every company should take a hard look at how they’re governing and managing their data.
Before I dive into the who, what, when, where, and why of data governance, I want to flashback to Fall 2020 and really emphasize why data governance is important and why you should read this entire article to learn more about it.
In October 2020, the Office of the Comptroller of the Currency (OCC) fined a large financial institution $400 million in relation to deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls. The infraction not only led to this costly fine, but a $1 billion investment into the financial institution’s data governance, architecture, and operational programs. Poor data governance is not only costly to your insights but also to your wallet.
What is Data Governance?
Data governance is the set of organizational procedures and rules to guide the functional design and operations of a data platform. A process of governance across your data platforms prevents bad insights. It also ensures your business is adhering to strict regulations (see above) and shows that your organization cares about how it’s processing data.
Typically, organizations have standards — papers, PDFs, documents in SharePoint or other storage systems — that describe how data should be managed. The challenge lies in activating those static pieces of paper inside data platforms. Organizations take different approaches, but our process is all about people. We use an interaction model to show what roles people play, what they’re responsible for, and how it translates into actual actions on data systems.
Why Data Governance?
Data is unique in that people are so heavily involved in its success. Data is only as powerful as the people who wield it — so if you have data, but you don’t know the right context around it, then you can’t pull the right insights. The only way to get the right information out of that data is to know who knows about that data and to really understand what it’s describing. That context is key. And that’s what data governance enables.
It’s also how we go from static policies to living decisions and actions. We move beyond documents that go unread or get skimmed over as impractical nuisances and instead make these standards the focal point and guardrails for how we manage data.
And it’s how we know where to go and what to do when things go wrong. We see this a lot — a company will have a process, but omit the accountability aspect. Governance helps identify the right person to approach when things go wrong, how to connect back to your standards, and how to move forward from there.
How do you make governance work?
It’s hard. Many stakeholders must work together to ensure governance will work. One great way to ensure data standards are practically applied in real-world systems is by convening a council of the right informers and decision-makers. This would include key data owners, data consumers, technical platform owners, and data governance compliance stakeholders. Bringing these groups together to combine their unique perspectives is critical to enable the continuous operation of conceptual policies.
The council decides what to do with policies and how to act on them, plans the target data strategy, details actions and deliverables in a charter, and adheres to written agreements. Activating data governance looks different for each enterprise, but a universal constant is that governance practices must be practical in a business context. This can only happen with buy-in and ownership from both technical and business stakeholders.
Alright, so what did we learn?
If you take anything away from this article, let it be this: it’s meticulous work to activate data policies and hard to mobilize people around a shared vision. But, when done right — with ownership at the core — data governance can create clarity, compliance, consistency, and improved business decisions.
If you’re ready to capture quality data and share a vision surrounding data practices, we can guide you through the process. Send us a message if you’re curious about how we’re helping clients activate governance and make better business decisions.