Your data drives customer engagement, business processes, new product innovation, and ultimately competitive success. With data so precious, it seems obvious that you want to treat it as a valuable asset, with all the appropriate policy setting, stewardship, and enforcement possible. In a word, governance.
But how can you turn the concept of data governance into a reality?
The Data Governance Dilemma
Significantly growing data volumes, variety, variability, and complexity, combined with ever-expanding compliance requirements make governing data a huge challenge in many organizations today.
Further, these issues have turned data governance into a costly endeavor. How costly?
- In terms of opportunity cost, the 2016 Harvard Business Review article, Bad Data Costs the U.S. $3 Trillion Per Year, succinctly captured the opportunity cost of poorly governed data. Today $4 trillion in lost business opportunity seems a reasonable estimate.
- In their July 2020 article, “Reducing data costs without jeopardizing growth,” McKinsey estimated that the cost of data-quality monitoring, remediation, and maintaining data-governance artifacts (e.g., data dictionary, data lineage) can range from 2.5 to 7.5 percent of IT Spend, which translates to an annual investment of $20-50 million in a typical mid sized financial institution.
- According to IDC’s Worldwide Data Integration and Intelligence Software Forecast, 2020–2024, organizations will spend over $2.2 billion on data governance software alone in 2020. This includes the purchase costs of data stewardship, catalog, lineage, and master data intelligence software, but not the additional implementation and operation costs.
Invest Effectively: Business and IT Alignment is Key
Given these significant costs, it is important that your business and IT teams are on the same page. To maximize the effectiveness of your data governance investments, you should intelligently prioritize them weighing multiple considerations, including:
- Value drivers such as customer engagement, process optimization, and innovation
- Business and IT risk factors
- Regulatory mandates (GDPR, CCPA, BCBS 239, etc.) and other compliance requirements
- Data landscape challenges
- And data governance maturity
Invest Efficiently: Address Data Governance Holistically
Data governance is a continuous process from policy setting through enforcement, execution, and improvement. These efforts impact your entire data management portfolio, not just the traditional governance domains such as data stewardship, catalog, lineage, and master data management (MDM).
So, rather than adopt standalone data governance products, select data management suites where data governance capabilities are embedded throughout. Within TIBCO Unify for instance,
- TIBCO Data Virtualization embeds critical governance capabilities such as lineage and usage tracking making better governance a by-product of your agile data integration strategy.
- TIBCO CloudTM Metadata improves governance by letting you holistically manage all your metadata including business metadata (glossaries, definitions, policies, rules), physical metadata (data dictionaries, data lineages), and the data catalogs (datasets, entitlements) in one place.
TIBCO’s integrated approach is a more efficient way to provide the data governance your business and IT teams require.
Building your “CFO-ready” Financial Case
With your list of effective and efficient investments in hand, the next step is to build a compelling financial case that will justify your investments.
- Financial Benefits: Start with your benefits. Revenue growth, cost savings, and risk reduction tend to get your CFO’s attention, as does any investment that accelerates your digital transformation agenda.
- Costs: Typical costs span people, processes, and technologies. People costs include data domain experts from the business side, IT’s data stewards, engineers, architects, and perhaps third-party experts. Process costs include the processes that set governance goals and policies, as well as those that implement and enforce them. Technology costs typically include the licensing costs of any new data management software required, as well as their associated implementation and operating costs.
- Pay as You Go: Given your business and data complexity, continuous improvement is key to data governance success. If you do this right, the benefits you gain from your initial investments can help fund later investments. Showing your CFO your plan for rapid return on investment will improve your odds of approval.
The Bottom Line
Your data is a critical asset, one that should be governed via proper policy setting, stewardship, and enforcement. To govern wisely, invest effectively and efficiently. And prove it with a business case that showcases your intelligent investment approach.
Find out more about how to balance data demands while adhering to regulations and internal controls with your enterprise data governance program.