News & Events
It is 3pm on a Thursday evening... The boardroom is either stiflingly hot or cold enough to spark small talk about the weather before Brexit hijacks the first 5 to 10 minutes of the strategic board meeting (or in fancy Data Governance talk, the Steering Committee Forum). The topic of this meeting is usually dressed up with titles like ‘Strategic Review’ or ‘Planning and Performance Evaluation’ but really it means ‘how do we ethically make more money and keep our stakeholders happy?’
“We should cut costs!” exclaims the frugal COO.
“Wouldn’t it be better to increase investment into divisions X and Y?” the CFO advises.
However, the newly appointed CDO proposes: “Pushing for investments in tech, namely automating various workflows, would allow the organisation to streamline its operations as well as freeing up capital for additional ventures.”
The CDO’s suggestion is well received and inevitably leads to advanced discussions about which technologies the organisation should consider investing in to maintain their dominant market position. Perhaps unsurprisingly, Artificial Intelligence or ‘AI’ is inescapably mentioned and the first questioned asked by all attendees, sold at the mere mention of AI, is ‘how much?’
The above scenario can be defined as Business Strategy. Business Strategy is defined as a framework that top-level management implements in order to achieve its business objectives. These often include either gaining or maintaining a competitive position in the market, increasing operational efficiency and ultimately making a profit. It is an essential component of any successful business as it ensures an understanding of its general direction and its desired goal across all divisions.
However, arguably more important than the business strategy is the data driving these decisions.
The claim by Clive Humby OBE that “Data is the new oil” is not without justification. According to Forbes, less than 0.5% of all data is ever analysed and utilised. In fact, ‘retailers who leverage the full power of big data could increase their operating margins by as much as 60%.’ This should provide an insight into the potential data holds. In future, it will surely become a commodity of unparalleled value if leveraged in the right manner.
“Data is a precious thing and will last longer than the systems themselves.” – Tim Berners-Lee, Inventor of the World Wide Web.
Contrary to popular belief (and to the old adage: “it’s all about the data”), the hierarchy of significance does not end with the data. More important than the data itself is a solid data governance framework which shapes the very data referred to when a business strategy is conceived.
I suppose the first question to ask is ‘what is data governance?’ According to Informatica, “data governance encompasses the strategies and technologies used to make sure business data stays in compliance with regulations and corporate policies.” Moreover, Dataversity defines data governance as “a collection of practices and processes which help to ensure the formal management of data assets within an organization.”
As is the case with all disciplines that begin their journey to prominence, data governance will have more than one set definition. Take, for instance, the study of Economics which formally began in the mid-20th Century as Behavioural Economics but is now one of the many definitions of the behemoth known as Economics. It is a natural consequence of the fact that organisations shrewd enough to leverage their data assets seek to define what they think they know. Maybe, like Economics, data governance could evolve in nature over time as it develops and establishes itself as a necessary component of any organisation. Nonetheless, when you examine all definitions of data governance, elements of strategy appear in almost every instance.
“The goal is to turn data into information, and information into insight.” – Carly Fiorina, former executive, president, and chair of Hewlett-Packard Co.
So Why Should Data Governance be an Essential Part of Your Business Strategy?
The key word here is ‘strategy’. Every organisation, either big or small, has a strategy for either maintaining or establishing a competitive advantage in any given market. We are living in an age where data defines everyone and everything in existence. As CEO of LinkedIn, Jeff Weiner put it: “Data really powers everything that we do.” To put things into perspective, even metadata such as the time of day a phone call is made to a retailer to place an order can be translated and integrated into that retailer’s marketing strategy.
“The world is now awash in data and we can see consumers in a lot clearer ways.” – Max Levchin, PayPal co-founder.
There is one big caveat here unfortunately (well a few). Is the data used to make strategic decisions reliable? Is it understandable? Does the data accurately represent the message we are trying to tell? This is just a snapshot of the numerous issue's organisations face today when it comes to leveraging their data assets. Not to mention the risk of fines of up to 20 million euros or up to 4% of global turnover, whichever is higher of course.
This is where data governance comes in.
Data Scientists cannot utilise their coding ability and mathematical modelling expertise without the right data infrastructure in place. Data Analysts cannot identify trends in the data or ‘turn data into information and information into insights’ if the quality or timeliness of the data is lacking. Data governance effectively allows an organisation to leverage its data assets effectively and efficiently. For instance, clearly defined Data Sources, Data Owners, Stewards and Subject Matter Experts allow for more clarification in terms of operational efficiency. Most importantly, it improves the accessibility of data assets for those who would be able to derive the most value from it. It’s no surprise that even a 10% increase in the accessibility of data could result in more than £60 million of additional net income.
So, what are you all waiting for? Let’s make some money.
Posted on September 26, 2019