What is Data Governance?
Data governance encompasses the overall management of your enterprise data and how it is accessed and used while maintaining its integrity and security. When organizations create a comprehensive data governance policy, they create policies to maintain data governance and security while considering all regulatory laws.
Data governance can help protect your business, but it also helps make your business more efficient. In order for such a program to run smoothly while adhering to best practices, it must be consistently monitored. A data governance program should have a council that monitors progress to ensure it is running properly.
1. Greater efficiency
When you have well-managed data and can use it for business analysis, you can improve operational efficiencies in many areas. As a rule of thumb, 20% of your customers deliver 80% of your profits; By accurately measuring which customers are the best fit for your business, you can better target your marketing and sales investments. By understanding product profitability, you can weed out underperforming product lines and invest more money in promising ones. Analysis of business processes can reveal opportunities for improvement – but only if the data underlying these processes is reliable.
2. Better data quality
Despite significant IT investments, maintaining good data quality remains an unsolvable problem. A 2019 study published by software provider Experian Data Quality found that 95% of organizations are feeling the effects of poor data quality; Specifically, respondents to a 2020 Gartner survey estimated that poor-quality data costs their organizations an average of $12.9 million per year. The impact of data quality issues can be profound, which is why efforts to improve data quality are an important part of data governance programs. Improved data quality helps reduce operational errors and increase analysis accuracy. While there is no silver bullet, a good start includes developing a data quality mindset and regularly reviewing and measuring data quality as part of the governance process.
3. Better compliance
In healthcare, financial services, and other industries, there are significant penalties for poor regulatory compliance. For example, pharmaceutical companies are required by law to track their marketing and advertising spend. Non-compliance has resulted in billions of dollars in settlements with the US Department of Justice and hundreds of millions of dollars to others since 2009. With these totals, accurate and verifiable data delivery is critical. The GDPR, the California Consumer Privacy Act, and other privacy laws also add new compliance requirements for cross-industry uses of personal information about customers. Without strong data security and privacy backed by effective governance, organizations could face fines and lawsuits.
4. Better decision-making
When your company has a solid foundation of data, it can confidently make better business decisions. Executives and employees can better plan, monitor, and respond to marketing promotions, pricing adjustments, product strategy, customer service, and other aspects of business operations. However, it all depends on end users having access to accurate data for strategic planning, business intelligence and advanced analytics applications.
5. Enhanced business reputation
In addition to tangible financial benefits, effective data governance can help improve a company’s reputation with customers. For example, high-quality data enables better interactions with customers by sales and customer service representatives. Ideally, this leads to higher customer satisfaction and retention, which should further improve business performance.
