10 Benefits of Data Governance You Can't Ignore
Many of us are guilty of falling prey to data sprawl: we collect, process, and store more and more information every day, without necessarily taking the correct steps to organize it properly. With no strategy in place, we can find ourselves drowning in a sea of data.
The solution? Data governance.
What is Data Governance?
The Data Governance Institute defines data governance as follows: “A system of decision rights and accountabilities for information-related processes, executed according to agreed-upon models which describe who can take what actions with what information, and when, under what circumstances, using what methods.”
With such a system in place, the practice of collecting, organizing, protecting, and storing organizational data (which we call data management) can be undertaken more effectively.
The Importance of Good Data Governance
When people do not know where to look for facts and figures they need, the result is wasted time and missed opportunities. Stakeholders fail to identify trends or areas for improvement due to the sheer vastness of data available.
There’s no denying that this side of business is important to get right, but what are some of the specific advantages that data governance can offer?
In this post, we’ve rounded up the top 10 benefits of data governance that come with implementing an effective strategy.
1. Improved Data Quality (and Decision Making)
Although some business decisions require hunches or gut instinct, the vast majority should be backed up by hard numbers. However, a decision that’s based on bad data might turn out to be worse than one based on no data at all.
Having a strong data governance structure in place means having access to accurate and relevant information, often in real-time, that helps you make better decisions. In other words, data governance and better data quality – i.e. accurate, and timely – really do go hand in hand.
For example: one person being accountable for certain data sets ensures more consistency across them, more than when different people are managing data in several different places. This also facilitates stronger comparisons between those data sets.
2. Lower Data Discovery Costs
We’ve seen above how the overall improvement of data quality is a significant, and long term, benefit of good data governance. But there are plenty of other key advantages of data governance, with many of them coming from data being simpler to find, use, and share.
Historically, data storage costs were a concern with expensive on-premise hardware deployments. Today, the bigger sunk cost is the time spent finding and getting access to relevant up to date information.
Eliminating data duplication, a side effect of teams working in information silos, and streamlining how data is stored reduces the burden of data storage and can help to massively reduce these sunk costs as a result.
3. Compliance Becomes Easier
Most organizations have some compliance requirements, whether it’s HIPAA, the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). Meeting these requirements is not only vital to avoid fines, but important for protecting users too.
But a big issue here is that many organizations don’t have a solid understanding of what data they have, where it is, how it’s being used, or even how it’s permitted to be used. A comprehensive data governance strategy allows you to easily see who is using the data and why. Compliance is much simpler when you can figure out what data your team needs.
Then, as new team members arrive, you’ll know exactly where to point them to get up to speed on compliance…provided you keep a well-organized security compliance portal.
4. Reduce Project Management Costs
The larger a data project, the more expensive and time-consuming it can be. You may, for example, need to hire additional employees, recruit consultants with specialized knowledge, or implement new software.
Identifying and connecting relevant data sources, for example, can become extremely complicated if you’re already gathering information from many different places. Determining what’s relevant, and what isn’t, quickly becomes an uphill battle.
If you can implement a comprehensive data governance strategy earlier in your company’s lifecycle, you’ll get a better handle on managing your organization's data and can significantly reduce costs further down the line.
5. Enhanced Data Accessibility for Everyone
We’ve previously written about how improving data accessibility can help to unlock the value of your data, but it bears repeating here. Although it’s useful for everyone in your organization to be able to easily access data, enabling them to do so has serious security implications.
The correct governance strategy helps you to achieve an appropriate balance between data access and security, avoiding potential privacy concerns and behavior that might breach those compliance requirements we’ve already mentioned.
6. Data Governance Promotes a Data-Driven Culture
Following on from the above. Plus, providing structure and guidelines for how to work with your data ensures more confidence in its use and allays possible fears about (not) meeting compliance requirements. In other words, it creates an environment where data is seen as everybody’s business.
As the onus shifts away from the data team as gatekeepers, each department becomes accountable for using and maintaining quality data that’s relevant to them. Ultimately, this promotes trust between different departments and increases transparency.
7. Alleviates Strain on Data Team
Without an effective data governance strategy in place, data stewards can easily become overwhelmed by requests for information from different stakeholders. On any given day, executives, marketing, and support might all need data sets exported. And when do they need them? “As soon as possible.”
It’s easy for data teams to get caught up in fragmented data regimes, pushing numbers around and never actually getting into real analysis that holds much more value for the business. When departments are empowered to own and maintain their data, this frees up data scientists to conduct the experiments and analysis they were brought on board to do.
8. More Efficient and Less Costly Audits
Whether internal or external, audits are an inevitable part of data governance. And, if they’re not done properly or you’re tasked with rapidly fixing a lot of problems, they can be costly.
The goal of an internal audit is to identify and fix issues relating to policies, procedures, or training that could lead to compliance or security issues before the occurrence of a costly breach.
A well-documented data governance policy, that outlines exactly who does what, ensures that employees and other stakeholders understand what’s expected of them. One benefit of this is that the auditing process is clearer and more efficient.
9. Data Governance Prevents Data Loss and Protects Sensitive Information
We’ve written above about how data governance can help with compliance requirements, but it has implications for security that go far beyond that; effective governance provides a framework to ensure that data is properly secured and protected.
This not only reduces the risk of sensitive information being lost or stolen during cyberattacks, but also prevents data loss due to human error or negligence. For example, employees understand that they should only transfer data through secure channels rather than, say, forwarding it to a personal email address.
That’s important because data loss or breaches can be extremely damaging, both in financial terms (fines, customer exodus, etc.) and for a brand’s reputation. Having to send an email explaining how users have been put at risk because of your actions is never a good look…
10. Consistency Across Key Performance Indicators (KPIs)
Just as data governance helps you make business decisions more effectively, it can also help you to measure the outcomes of those decisions with more confidence. This is true because having greater control of your data creates consistency across KPIs.
When different departments have a firm understanding of their aims, and how their success is measured, they get a clearer picture of what a good week, month, or quarter looks like for the business. Roadblocks, or areas of improvement, can easily be identified and the appropriate action(s) taken to address them.
Reap the Benefits of Data Governance with Sigma
Delivering the advantages of data governance in 2023 is easier than it’s ever been, and it all starts with embracing a strategy that works for your organization. The deeper you can embed that philosophy in your business practices, the better outcomes you’ll see.
Implementing a data governance strategy with a business intelligence tool like Sigma can improve various aspects of your business, as we’ve seen above, from empowering your team members to delivering better decision-making. And now is a great time to start.
