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How Data Governance Can Impact Your Bottom Line

A company’s data is one of its most important business resources. The amount of information that an organization needs to integrate into their plans and procedures can be intimidating. Big data, eCommerce, and the Internet of Things are all contributing to the problem as multiple complex data streams need to be collected and analyzed.

Data governance is a strategy through which an enterprise can institute formal management of their data assets. It is a collection of procedures, practices, and standards that assists in making intelligent business use of their data resources. In the current landscape of increased focus on data security, data governance offers a strategy and methods to better safeguard important and sensitive information.

Many organizations are jumping on the data governance bandwagon in an attempt to manage their data resources. Some of them may have been influenced by the best practices adopted by other businesses or competitors. Other enterprises may be led by supposedly enlightened management who sees data governance as an intellectual exercise that offers mostly abstract advantages to internal processes. Maybe they just read about it in a blog somewhere.

But there are concrete benefits for a company with a strong data governance policy which go far beyond theoretical constructs. The real reason that a business should get involved with data governance is the same one that drives a great majority of their decisions. In the end, it’s usually always about the bottom line. Money talks and can be made or lost depending on the quality of a company’s data governance program.

Benefits of Viable Data Governance Policies

Data governance provides benefits that can be grouped into three distinct categories.

  • Top-line benefits include the ability to make consistent and more intelligent data-based decisions across an enterprise. Governance enables companies to understand the financial potential contained in their data and make plans to use it efficiently. While these benefits cannot be categorized as abstract, they may not offer any immediate monetary gains.

  • Bottom-line advantages of data governance are where you start to see tangible financial results. The common data language afforded by the governance program leads to more effective inter-organizational communication and internal process improvement. This increases productivity by eliminating confusion between different parts of the organization as they coordinate company-wide initiatives.

  • Risk reduction is critically important in the current business climate of data privacy concerns and regulatory compliance. The improved data security provided by data governance can result in a lower risk of non-compliance and its associated financial penalties. It can also lead to minimizing the chances of data breaches and creating a framework for accountability that strengthens the way information is handled throughout the organization.

Issues Resulting from Poor Data Governance

While implementing data governance for any reason is a good thing, going about it in a haphazard manner is not. Here are some of the things which can happen to a business that does not institute data governance or implement it effectively.

  • Lack of a coherent data governance policy makes it impossible to assimilate the large amounts of information that are necessary to make smart business decisions. An ineffective implementation can reduce the usefulness of systems such as the healthcare industry’s electronic health records (EHRs). These systems have suffered from erroneous data entry that can be minimized through strong data governance efforts.

  • Regulatory compliance should be of uppermost concern to any IT executive whose organization handles sensitive personal information about their customers or employees. Failure to fully protect this data and demonstrate compliance with regulatory standards can lead to substantial fines.

  • Data breaches are another consequence of inadequate security that can be minimized with a data governance initiative. During the development and implementation of the program, sensitive data and its location within the enterprise is discovered and its security can be addressed. A data breach will often result in serious financial losses and a hit to a company’s reputation from which it is difficult to recover.

Working Toward an Improved Data Governance Strategy

The foundation of a viable data governance program is the development of a common data language which can be used throughout all levels of an enterprise. This endeavor involves representatives from across the business and demands a high degree of collaboration in order to be effective. Buy-in from all stakeholders is a critical component of a formidable data governance policy.

IDERA’s ER/Studio Enterprise Team Edition is a great vehicle for driving down the road toward the benefits of a data governance program. It enables you to build an enterprise data model and collaborate on data terms and definitions. Using the tool allows you to interrogate your existing data resources to discover and document your assets. Building the common language that is essential to a data governance policy is within easy reach with ER/Studio. Let it help you avoid the pitfalls that come with a lack of understanding and management of your company’s vital business data.

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