What is a business glossary?

A business glossary is a list of business terms and their definitions that organizations use to ensure the same definitions are used company-wide when analyzing data. A business glossary produces a common business vocabulary, used by everyone in an organization. A unified, common language is a key component of data governance. Having an agreed-upon understanding of key business concepts, terms, and the relationships between them ensures that organizations make sense of their data and properly govern it.

A business glossary is an important part of data governance. Without it, you cannot be certain that everyone in a company is speaking the same language. For instance, one department may define the term “customer” as a company while another department may refer to the term customer as an individual. A business glossary prevents this discrepancy by providing one definition for each business term used company-wide. It ensures that businesses can trust their data and prevents incorrect information on reports. It can even help avoid miscalculations and potentially erroneous analytics.

A business glossary contains metadata that assigns meaning or semantic context to data. A business glossary is usually an artifact produced by a data governance initiative and is most often controlled by the business rather than IT.

A business glossary promotes data visibility, context, control, and collaboration across an organization. For regulatory compliance and data governance initiatives, it can break down organizational and technical silos. A business glossary can also unify employees because they can understand how other departments are thinking based on consistent data exchange. This increases trust between departments.

A business glossary that lists relationships between terms, acronyms, approved standards, prioritization, and synonyms maps all the data, no matter what format it is in, to a central catalog of data. This helps users know where data is so they can easily find it. It’s also beneficial for governance purposes as it helps you to understand who is using the data and ensure they are adhering to standards.

Business glossary vs data dictionary

The term business glossary often gets confused with data dictionary, but they have very different uses. A business glossary is aimed at a business audience. It defines what business terms actually mean to ensure that the correct terms are used in the proper context throughout an organization. Meanwhile, a data dictionary is most useful for technical employees to manage data. It defines and describes the attributes of data sets and their fields.

A data dictionary focuses on physical data assets while a business glossary’s focus is business terms and concepts. A data dictionary usually consists of a list of datasets (typically in the form of tables) and their fields (usually representing the columns) while a business glossary contains a list of business terms and their definitions. The goal of a data dictionary is to clearly understand data assets and databases while a business glossary provides a common vocabulary and understanding of basic business concepts.

Since it is more technical in nature, a data dictionary is typically built and owned by the IT department while the business tends to own the business glossary. An organization can have one data dictionary per data source, whereas they will only have one business glossary used throughout the entire organization. Data dictionaries are generally used to document data sources, model data, and design databases while business glossaries are used for data governance and requirements analysis.

But, the two work together to describe different aspects of data so companies can get a complete view of their data.

Benefits of a business glossary

Having a frequently updated business glossary is a necessity in today’s complex environment. It ensures consistent communication between everyone in an organization. It also makes sure that everyone is viewing and using the data in the same way. It creates a necessary standard across an organization. And, since it’s becoming increasingly harder for organizations to make sense out of data and govern it properly, a well-managed business glossary is one of the best ways to ensure that everyone is working with the same information. Other benefits include:

Establishes relationships between terms for quicker searching of data

One of the biggest benefits of a business glossary is that it defines the relationships between business terms and makes it easier for users to search for terms. A comprehensive business glossary will define terms, provide examples, show how terms relate to one another; it will link to all of the other artifacts associated with that term including KPIs, processes, databases and systems, data owners, and stewards. Business terms are only useful when you can relate them to these other data sources. A business glossary will also link business terms between technical and business entities.

Enables collaboration

Since a business glossary gives everyone the same definition of terms to use throughout an organization, departments can communicate more effectively. If you ask two different people from one organization what bi-weekly means, you will most likely get two different answers. With a business dictionary, employees no longer have to guess or repeatedly explain what they mean and can refer to one central location, saving everyone time. A business glossary helps bridge the gaps between departments, particularly between the business and IT. Especially when linked to a data dictionary, a business glossary will also include the underlying metadata associated with business terms and the associated data lineage—making it easier for technical audiences to match associated metadata.

Defines data governance roles

A business glossary enables collaborative workflow management and approval processes, giving stakeholders—with established data governance roles and responsibilities—visibility. A business glossary prevents the business and cross-functional teams from working in silos where they tend to define business terms according to their own knowledge and often don’t follow standard policies and best practices. It also gives the entire business access to the terms.

To properly build and maintain a business glossary, business users should be assigned roles for all of the various tasks associated with building: creating, editing, approving, and publishing business glossary content. This ensures end-to-end traceability and accountability of items in the business glossary and people involved in the processes. Again, it’s important to revise and republish a business glossary on a regular basis based on the needs of your organization to ensure that it remains up to date and relevant to the business. A business glossary updated with clear processes and adheres to strict standards will improve the trust of data company-wide.

Establishes measurable quality of your data

A business glossary provides consistency exchange, understanding, and processing throughout the organization. It is recommended that organizations document a standard for how to define, enter, revise, and publish terms. An organization should use a document that standardizes how a quality definition is created throughout the company. A few examples of a standards document could include rules such as definitions can not use any of the words found in the title of the term being defined; a definition cannot include acronyms or abbreviations; the definition must be descriptive; and so forth. All of this leads to clarity and consistency in the data.

The proper governance of a business glossary provides quality measurement of your data. Once the quality has been established and is followed, you can begin to test the quality of your data by how often people have to access the business dictionary (the less they access, the better the definitions are), fewer uses of synonyms, and reduction in misunderstandings. When issues arise, it will be easy to source where the problem lies and remedy them.

A business glossary can prevent poor communication and unify the departments in your organization. A business glossary offers transparency and ensures that data and business terms are accurate and understood companywide. It’s also a useful tool for training new employees. Best practices for how to define terms and how they are classified builds trust and findability in your data and clarity for users.

Business Glossary diagram