Data is the lifeblood of modern business, with more than 80% of organizations putting it front and center of their business strategy.
But as organizations soak up more and more data, it becomes increasingly complex to manage it and use it to power greater insight. Despite its importance, up to 73% of an enterprise’s data is never used for any strategic purpose, according to Forrester.
Wasted data, simply put, means lost revenue.
When it’s captured and managed correctly, data becomes an enabler – rather than an obstacle – of growth for enterprises. This explains why the global data governance market grew by 25% between 2021 and 2022, reaching a value of $3.3 billion.
What exactly is data governance and why is it so important for organizations?
Data governance refers to a set of processes, policies, and standards that are established to ensure data is captured, managed, and used in a way that’s consistent with the goals and objectives of an organization.
It’s a core part of business as it ensures the integrity, security, and confidentiality of the data that’s collected and used by the organization.
There are multiple reasons why it’s important to have a good data governance strategy in place:
- Data Quality: A good data governance strategy helps to ensure that the data being collected and used is accurate, complete, and up to date. This is important because bad data often leads to poor decision-making, which in turn can have serious consequences for the organization.
A Gartner study of organizations found that poor data quality was responsible for an average loss of $15 million every year.
- Data Security: A good strategy helps to protect the organization’s data from unauthorized access and use. This is especially important in today’s world, where data breaches are becoming more common and can have serious consequences for both the organization and its customers.
Lax data security not only leads to damaged brand loyalty and a possible loss of customers. The leading cause of data breaches are malicious and criminal attacks, which make up 51% of all incidents.
- Data Compliance: A good data governance strategy helps to ensure that the organization is compliant with relevant laws and regulations regarding the use and handling of data. This helps to prevent fines and legal problems for the organization.
Non-compliance costs. On average, companies lose $4 million in revenue due to a single non-compliance event.
- Data Integration: A good strategy helps to ensure that the data being used by the organization is integrated and consistent across all departments and systems. This is important because it helps to avoid confusion and inconsistencies, which leads to problems associated with decision-making and efficiency.
The global data integration market is on course for a compound annual growth rate of 12% between 2021 and 2026, reaching a value of $19 billion. This is because data integration is a core aspect of digital transformation strategies, as organizations look to optimize their technologies to fundamentally change the way they operate and deliver value to their customers.
- Data Monetization: A good data governance strategy helps organizations to effectively monetize their data by ensuring that it’s accurate, secure, and compliant, which can increase the value of the data to potential buyers.
In recent years, there has been a growing trend towards monetizing data, driven by the demand for digital transformation and cutting-edge analytics. Allied Market Research reported that the global data monetization market is set for a compound annual growth rate of 22% between 2021 and 2030, reaching a value of $15.4 billion.
This is the broad landscape of a solid data governance strategy. To navigate this terrain, there are several best practices that organizations can follow to ensure that their data governance strategy is effective.
- Establish a clear set of data governance policies and procedures: Have clear and concise policies and procedures in place that outline how data should be collected, managed, and used within the organization. Once a data governance policy is established, it needs to be communicated to all employees, with a system in place to enforce it.
It helps an organization’s employees understand who is responsible for each procedure and how to manage it. Because of this, it’s important that the document is written clearly and logically so that everyone knows what is expected of them.
- Appoint a data governance leader: Designated a dedicated individual (or even a team) to oversee the organization’s data governance efforts. The governance leader (or lead) will be tasked with setting and enforcing policies, making sure that data is being used to connect with the organization’s objectives.
Ultimately, the data governance leader is a vocal champion of data and ensures that an organization’s data is well-organized, accessible, safe, and valuable.
- Establish a system for managing data quality: Put a system in place for ensuring that the data being collected and used by the organization is accurate, complete, and up to date. This might involve implementing processes for verifying the accuracy of data, as well as processes for correcting errors and inconsistencies.
Data is much like water. It is fluid. It can be cleaned and stored in lakes, providing vital supplies for business survival. Or it can be contaminated by poor storage and leak out, exposing people to its damaging effects. Despite its high value, just 42% of organizations have protocols in place to ensure good data quality, according to McKinsey.
- Implement strong data security measures: Data governance should include measures to protect the organization’s data from unauthorized access and use. This might involve implementing strong passwords, access controls, and regular security updates.
Data security is a key concern for all types of organizations. When the U.S. Department of the Navy was facing key technical challenges with its data, ArganoConnect enhanced the department’s operational security by implementing container-based services and a robust API management platform to provide the Navy with data processes capable of responding to its evolving needs.
- Ensure data compliance with relevant laws and regulations: It’s vital to ensure that the organization’s data governance practices are compliant with relevant laws and regulations regarding the use and handling of data. This may even involve working with legal counsel to ensure complete compliance.
As data privacy regulations become stronger around the world, enterprises need to keep pace with the major changes that come into effect. Some of these include the European Union’s General Data Protection Regulation (GDPR), which gives consumers greater rights over their personal data. Then there’s the HIPAA Privacy Rule that protects Americans’ personal medical and health records. And California’s Privacy Rights Act, which gives the state’s residents more control over their personal data.
All of these ingredients for good data governance can be distilled into getting the right data to the right people with the right protections in place. As part of ArganoConnect’s digital transformation capabilities, our Data Services help businesses evolve into insight-driven enterprises with connected data solutions.
Developing data governance strategies is an important part of our data services.
They are essential for protecting the integrity, security, and confidentiality of data. And this is crucial for success, as it maintains a healthy data supply, which can be used in a way that’s consistent with the organization’s core goals and objectives.