From the minute an entrepreneur has an idea for a business, the story is written by data and decisions based on it. Data shows whether there’s a need and a market for the product/ service. It helps you set good price points, strategize marketing campaigns, establish practices that will keep customers happy and more.
It goes without saying that you need good data to make the right decisions. And, the only way to achieve this is with a well-thought-out data governance strategy.
What Is Data Governance?
Data governance is a set of rules and practices that defines how an organization manages and works with data. It is aimed at maintaining data integrity, making it trustworthy and keeping it secure yet available to all who need it. Data governance is required to comply with privacy regulations and make data analytics reliable for confident decision-making.
Data governance is not the responsibility of just a few people. Yes, there is a steering committee to set quality standards and enforce procedures but to ensure good governance, it must involve everyone from the IT department to business users and executives responsible for data entry.
How Does Data Governance Impact Decision-Making?
Data governance focuses on continually measuring and monitoring data to improve data quality. When data quality meets high standards, the insights drawn from it become usable for decision-making. Let’s take a look at four ways data governance impacts decision-making.
It Establishes Trust Through Data Lineage
Trusting data is critical to making data-driven decisions. Your team must trust the data to be accurate, complete and standardized to meet established policies as well as trust colleagues to use data correctly. Data governance helps create transparent data processes for collecting, storing and using data to create this trust.
By mapping the history of where data originated from and how it has changed over time, it creates a lineage that helps understand it and determine how suitable it is for decisions. For example, knowing when data about a customer‘s age was collected can help understand the customer’s current age with a minimal margin of error and thus place him or her in the appropriate demographic groups.
When decision-makers have trust in data, they can use the insights gleaned from it with greater confidence and thus make strategic decisions for the organization’s future.
It Breaks Down Silos To Make Data Accessible To All
Siloed data is one of the biggest hurdles faced by decision-makers. A report showed that 47% of marketers found data difficult to access because it was siloed. Siloed data refers to data that is accessible only to part of the organization and isolated from everyone else. As a result, the available data gives an incomplete view of the situation/ customer and has a higher risk of being inaccurate and outdated.
Data governance aims at improving decision-making by breaking down these siloes and creating a central databank that stakeholders from various units can access. This ensures that everyone is working on the same data and draws similar inferences from it.
For example, a customer interacts with many different teams – the marketing team, sales, billing, support, etc. Let’s say he/she bought a product and wants to return it. If data is not shared between departments, the customer may need to repeat his/her story to each team.
With good data governance, data is shared and stored centrally so the support team knows the customer’s relationships with the organization and can take decisions appropriately.
It Creates Uniform Policies To Improve Data Quality
Better quality data is the main aim of data governance. Without rules, data quality will lag and users will arrive at different conclusions that could steer the company in opposite directions. A study showed that only a third of the firms surveyed trusted their data enough to derive value from it. Good data governance creates consistent policies to standardize data formats and make it easier to understand and less likely to be duplicated. Thus, it helps close the data-value gap.
Here’s a simple example. If you don’t have a policy on how customer names are to be saved, you might have multiple records for the same customer by the name ‘John Smith’, ‘John’, ‘John S’, etc. created at different times.
Creating rules and enforcing them keeps such errors from occurring and improves the quality of incoming data so that it is easier to manage and more reliable. The risk of dealing with duplicate records is drastically reduced and decisions can be made with more faith in the available data.
It Removes Dark Data To Make It Easier To Uncover Opportunities
Not all data collected by an organization is required for decision-making. This unwanted data, for example, emails, chat messages, log files, customer call records, archived web content, etc are referred to as dark data.
According to a survey, 55% of data held by companies can be categorized as dark data. Dark data not only increases storage costs and increases the risk of non-compliance with data privacy regulations, but it also makes it harder to spot business opportunities.
Email clutter is probably an example everyone can relate to. Given the number of emails sent and received every day, finding a particular mail in your inbox is often akin to searching for a needle in a haystack. Good governance policies help curate, manage and store data in a structured way and thus help remove a lot of dark data. This makes it easier to identify relevant data for decision-making and uncover opportunities that may otherwise have been lost.
In Conclusion
Data is every organization’s biggest asset but to meet its potential, it must be reliable and meet high-quality standards. Good data governance policies improve data quality which in turn, drives better analytics for actionable results. As businesses see the benefits offered by data-driven decision-making, the need for data governance grows stronger. With better decisions come competitive advantages and opportunities for higher profits. In short, good data governance lays the foundation for a successful story.
