Data Governance: Preventing Enterprises from Losing Money Because of Bad Data

Boris Otto, Visiting Research Fellow

May 9th, 2011

The importance of Data Governance for enterprises is obvious. Regulatory compliance, supply chain integration, accurate reporting, and a 360 degree view on the customer cannot be achieved without high-quality data on customers, products, suppliers etc. Surprisingly, Data Governance as a company-wide, binding framework of rights and responsibilities for the use of data still leads a miserable existence in many cases. Why is that? After having worked closely on this topic with a number of blue chip companies over the last years, the following comes to my mind. First, Data Governance is often considered a pure IT issue and consequently delegated to the IT department. Of course, this is not a strategy for success. Data Governance and data quality are about the meaning of data. Only functional expertise from the sales department, for example, can tell when a prospect becomes an active customer. The pure notion of “data” in Data Governance, though, lets many companies delegate the mandate for action with all the way down to the basement where usually IT is located – using a figure of speech here, of course.
Second, many companies run their data resource according to the ostrich principle: Head in the sand and hoping nothing catastrophic will be happen because of poor data. Without being an expert in enterprise risk management, I am relatively sure this is not considered “best practice”. In fact, many data quality problems represent risks to the company. Not being compliant to the latest European Union directive on the registration of chemical products or delivering the wrong insecticide product to a leading agricultural customer are severe risks a special chemicals manufacturer, for example, must manage proactively. However, since it has been going well over the last years why take action now…Third, Data Governance is not a hot topic for many professionals. In the competition for awareness and resources, Data Governance does not seem to be well-positioned in comparison to issues like “Marketing Strategies in China”, “Leveraging social media for business value”, “Optimizing our service and product portfolio.”
Obviously, the topic of Data Governance needs people who speak in favor of it. So, I will try to make a contribution:

Due to its company-wide scope and the focus on data which is used across the boundaries of individual business processes and functions, Data Governance is at the core of a company’s business operations. Understanding corporate data means understanding the “DNA” of a company.
Data Governance is multidisciplinary and requires proficient skills in communicating a complex problem to various stakeholder groups.
Working in Data Governance can be fun. Don’t believe it? Ask the community of professionals in the Competence Center Corporate Data Quality (CC CDQ, cdq.iwi.unisg.ch).