In my previous blogs, I mentioned about Data Governance. In this blog, I will share my understanding on why Data Governance is required?
A goal of data governance is to have fewer negative events as a result of poor data. Poor information quality can begin to lead to adverse events both inside and outside the walls of the company, even though they are seemingly unrelated events. For example:
- Marketing becomes counterproductive. Marketing may be inadvertently barraging certain customers with multiple mailers due to near-duplicates customer details.
- Inability to ship products on time due to incorrect inventory levels. The data for the inventory is unstructured and not standardized and so one may not know the exact inventory level – too high and you’re stuck with extra inventory. Too low and you’re not able to deliver products/service on time.
- Your company buys equipment that you already have in inventory. Because of the data inconsistencies, a simple equipment check showed no available transformers, which appeared in the system as “trnsfmr.” Spending money when you don’t have to is bad enough.
- The IT team spends millions on a new ERP or CRM system. However, because of poor data governance and poor data quality, the system is unusable. Business users can’t get the information they need and lose faith in the value of the IT team.
- Lack of understanding of your biggest customer causes you to lose that customer.
But with proper Data Governance in place the following can be achieved to much greater extent:
- Improve the level of trust that users have in reports
- Ensure consistency of data across multiple reports from different parts of the organization
- Ensure appropriate safeguards over corporate information to satisfy the demands of auditors and regulators
- Improve the level of customer insight to drive marketing initiatives
- Directly impact the three factors an organization most cares about: increasing revenue, lowering costs, and reducing risk
- Designating accountability for information quality