Without a solid data foundation, organizations risk falling even further behind their data-savvy peers.
Failure to practice good data hygiene is emerging as a competitive disadvantage, while good data governance gives organizations an edge. In the absence of data governance, companies miss out on the benefits of consistent, clean data across the organization. Data quality issues impact business leaders’ ability to make decisions and leave them vulnerable to financial and reputational penalties resulting from data gaps. What’s more, leading organizations are already embracing data analytics and artificial intelligence to drive business growth and evolve the business model. Without a solid data foundation, organizations are badly placed to do this and risk falling even further behind their data-savvy peers.
Understandably, companies are keen to embrace better data governance. This desire to change is a good start, but it’s important to acknowledge that there is no quick fix to issues that have been accumulating in the infrastructure for decades. Data governance is not about finding “the” technical solution, but about embarking upon a transformation project that spans organizational, process and technology changes. Given the scale and reach of a company-wide data governance policy, it’s important to have strong executive sponsorship. Decision-makers often seek hard facts about the expected return on investment (RoI), especially when the spend is significant. This can be assured by connecting the objectives of the data governance program to the organization’s strategic goals, e.g., customer satisfaction, market agility, competitive positioning and increased revenue.
A broader view also reveals the potential gains of good data governance. Reliable data and powerful AI “on top” can support a company by providing the basis for strategic, evidence-based decisions – but only if you have large volumes of accurate, trustworthy data. It’s this combination that makes data valuable.
With executive buy-in established, it’s time to start your transformation journey covering organizational, process and technological changes. Although individual work streams will vary depending on the nature and needs of the organization, there are five key phases to consider:
For companies still wondering whether their data governance needs polishing, a couple of questions can help clarify the need for action:
- Do you ever have inconsistent data and reporting across systems and geographies?
- Do you make use of data when making strategic business decisions, i.e., are you a data-driven organization?
- Is data owned and accessible by the right roles within the organizations, and protected elsewhere?
- Are the financial figures you report on completely relevant, useful and accurate?
We believe that data governance is the prerequisite for becoming a truly data-driven organization. EY can help you start your journey today.
Summary
In today’s tech-driven world, data is the new gold. Strong data governance is essential if organizations are to extract the value from this precious asset – and prevent it from becoming a risk. Establishing good governance is not a task but a transformation that requires executive sponsorship at each stage of the journey.
Acknowledgment
We thank Alexandru Bortnic and Oliver Mohajeri for their valuable contributions to this article.