How to know if your Company is Ready for Good Data Governance

Data governance requires plenty of resources, a business-aligned strategy, and a data-driven culture.

Good Data Governance is a virtual silver bullet for saving time, cutting costs and improving revenue, so implementing Data Governance as soon as possible may seem like a no-brainer. Unfortunately, it’s not that simple.

You may think that your organisation is ready to take the plunge, but without making sure that your teams and personnel are ready for major strategic, structural, and cultural changes, you could be diving into a complete disaster.

If there’s anything worse than having no Data Governance program in place, it’s having tried one out and failed. Save yourself and your organisation from unnecessary stress, wasted time and sunken costs by determining your Data Governance readiness before you kick things off. In other words, look before you leap.     

Even if your organisation proves to be 100% prepared, assessing your Data Governance readiness will help you align your program with corporate strategy, settle on an ideal support and sponsorship model, determine the best team sizes and make-up, and prepare you for any risks or challenges that lie ahead.

With so much to gain and nothing to lose, let’s explore just how to know if your company is ready for Data Governance. 

Do you understand the business benefits of Data Governance?

To assess your Data Governance readiness, start things off by asking yourself if you fully understand your company’s business strategy and goals. You’ll need a crystal-clear picture of how your company is run and what it’s after to craft a Data Strategy that’s more than just dead weight.

The number one cause of Data Governance failure is a disconnect between Data Strategy and critical business objectives. To be truly Data Governance ready, you need to be able to articulate how and where better-managed data will be leveraged to advance your corporate strategy.

It’s only with a firm grasp of your company’s unique business drivers that you’ll be able to secure sponsorship within your organisation, and ultimately make an impact on the bottom line. Tighten up the business case for Data Governance by demonstrating what kind of ROI management should expect from the program.

If you can’t identify precisely how Data Governance will advance your organisation’s business goals or aren’t confident that you can present management with a strong business case, your organisation may not be ready for Data Governance.  

Even if your organisation’s executives aren’t demanding quantifiable projections for ROI or a bulletproof business case, it’s still essential that you prepare them anyway. Without quantifiable benchmarks for success, you’ll be unable to demonstrate the value of your Data Governance program down the line. 

Do you have the available resources?

Understanding how Data Governance will advance your business’ goals is essential. But realistically, all the strategic alignment in the world won’t mean a thing if your organisation doesn’t have the resources to support a healthy Data Governance program. 

In this case, resources mean both people and funds. Let’s start with people.

Just about every Data Governance program needs an executive sponsor, someone who can drum up support for the program and encourage—or even enforce—participation. If you can’t identify a sufficiently senior member of your organisation to fill this role you might be heading towards serious trouble. Do your best to gain management buy-in and win over a member of the C-suite before day one.  

A good Data Governance program will also involve a number of specialised roles. To ensure that the program runs smoothly and remains accountable, you’ll need to appoint both Data Owners and Data Stewards

Data Owners are senior managers who are ultimately accountable for the fitness of a particular data set. Data Stewards are the individuals responsible for managing that data on a day to day basis, and who report-in to the Data Owners. In some organisations, just one person might perform both these roles, but to ensure transparency and accountability, and to ensure there’s enough manpower to do the job properly, it’s usually best to divide them up.  

Larger, more complex organisations will also want to form a Data Governance Council to help oversee and manage the Data Governance program. Data Governance Councils are usually composed of an executive or senior staff from both business and IT, as well as subject matter experts from various departments. They might also include specialised Data Officers whose job is to ensure that everyone else understands and performs their data-related duties according to plan. 

If you can’t find subject matter experts from every department in scope to man your data council, you might just be in trouble. Likewise, if you don’t have the available personnel to handle the duties of both Data Owners and Data Stewards, or you lack the available budget to hire them, your organisation may not be ready for Data Governance.    

That leads us to the next category of resources, funds. 

If your organisation isn’t already supported by a strong team capable of filling the roles outlined above, you’ll need a hefty budget just for staffing. What’s more, to perform their duties as efficiently as possible, your Data Stewards will likely need additional tools and software—another cost to carefully consider.  

Implementing a solid Data Governance program requires considerable financial support to get it off the ground. If your company isn’t yet prepared to cover the costs, you may need to go back to the drawing board and generate a better business case.  

Is your company culture suitable for Data Governance?

Even if your data and business strategies are well-aligned and you’ve got all the available resources you’ll need, there’s still one thing capable of putting paid to your Data Governance ambitions. If your executive management isn’t ready to factor data into their strategic decision-making, there’s really no point in pursuing Data Governance at all.

If your management is making decisions based on gut feel and intuition rather than cold, hard facts they’re unlikely to be willing to spend money on improving data. After all, if you’re not going to change your decisions based on data there’s no need to invest in making sure it’s accurate in the first place.

Luckily, in today’s world, that kind of total data-blindness is pretty rare.

It’s far more likely that your C-suite will make the mistake of consigning all things “data” to IT and IT only. Of course, Data Governance is a strategic business program, not a stand-alone IT project. That means that the entire organisation will need to be on board and committed to the success of the program. Without continuous cross-functional support, it’s unlikely that your Data Governance program will succeed.

An essential part of that cross-functional support will depend on whether the rest of the company trusts IT to do what’s best for the business. If your IT department has tried and failed to perform business-critical operations in the past, you’ll likely encounter quite a bit of pushback. In these situations, management may acknowledge that data issues exist, but may not believe that anything can be done to improve them.

If that sounds like your company, you’ll need to do everything you can to convince the money men that there’s no such thing as “good enough” where data is concerned. Author Tom Redman has an excellent example showing why: 

Say that your company has 100 data records, and each data record costs $1 to produce. Now let’s say that your data is 99% accurate. Good enough, right? Well, not exactly. That 1 inaccurate data record isn’t just a dollar wasted. Using the ‘rule of ten’ it’s more likely to cost you closer to $10 in downstream errors, lost opportunities, and cleanup time. 

Now consider that in the real world, each one of your data records will contain multiple data elements, each of which has the potential to be off.  Say that each of your data records contains 12 fields. Even with 99% accuracy, you’ll still see, on average, 12 inaccurate fields per 100 data records. And these 12 field errors aren’t going to be conveniently found side by side in just one data record either. It’s much more likely that they’re going to result in 12 inaccurate data records. 

Rather than the 99 accurate data records that we started with, you’re now looking at just 88 correct ones. That means that even at 99% accuracy, you’ll end up spending $88 dollars for the 88 accurate and data records, but a whopping $120 for just the 12 inaccurate ones. That’s a total of $208, wasting $108 on “non-value-added” work for every $100 of actual work product; in other words, a 52% wasted effort. 

Walk management through the numbers and you’ll have made a great case for why improving your data can, should and must be taken seriously. Get everyone on the same page and you’ll be that much closer to Data Governance readiness. 

Is your company ready?

If you’re aligned with corporate strategy, you’ve got resources to spare, and your company culture is truly data-driven, then you’re likely ready for Data Governance. Not sure if your organisation is data mature enough to make the cut? Unsure of what to do next? Cognopia is here to help.

With free Data Maturity assessments and a range of bespoke consulting services, Cognopia’s team of Data Governance experts will help you craft a bulletproof Data Strategy unique to your organisation’s needs.

Schedule a chat here and find out what Cognopia can do for you.