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What is Data Governance?

Authors Photo Precisely Editor | May 18, 2023

Data is driving the strategic and tactical business decisions that determine success or failure in business today. According to IDC, 50% of enterprises in the United States say that using data and intelligence strategically to create competitive differentiation is critical to running a successful digital business.

Data governance has emerged as a business imperative for companies aiming to innovate, improve efficiency, and drive competitive advantage.

What is Data Governance?

In a nutshell, data governance strategy is an enterprise framework that aligns people, processes, and technology, helping them to understand their data and metadata with the goal of transforming it into an enterprise asset. Data governance refers to the structure for decision-making and authority for data and data-related subjects.

Data governance delivers better visibility along with a nuanced understanding of the data. It strengthens accountability and data quality for data assets and enables organizations to unlock analytical insights needed to improve business outcomes and fuel growth. Each organization can tweak this description of data governance based on its unique culture and business drivers, but the general definition cited above applies across the board.

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The Business Case for Data Governance

The vast majority of companies are still struggling to answer basic questions about the data integrity of their own data, such as:

  • Are we complying with our data usage licenses?
  • Are we exposed to regulatory risks?
  • Can we trust our data?
  • Are we using data in a consistent manner?
  • Are data consumers using certified data?
  • Do we have stale data?
  • Do we have redundant data?

Despite the fact that data is a critical part of an organization’s DNA,  rarely does anyone in an organization identify themselves as a data owner. If no one is in charge, then who can address this list of critical questions about data? How can your company realize the full benefits of being a data-driven enterprise?

Data governance is the answer.

Formalized data governance delivers real-world benefits for innovators and early adopters. Successful data governance requires:

  • Organizational alignment
  • An enterprise-wide framework
  • Clearly defined business requirements
  • Detailed objectives to achieve data understanding and trust

Many data governance programs fail to achieve their goals because data leaders don’t create a comprehensive data governance structure to deal with the most common data problems.

In addition to its critical role in providing trustworthy insights that lead to intelligent business decisions, data governance is critical for regulatory compliance. In the context of data privacy laws like Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), governance helps organizations track:

  • Consent receipts
  • Appropriate usage
  • Data subject rights requests
  • Personal data location

Tracking all of these items helps to ensure compliance with data privacy laws throughout different states and countries. It is also critical for individual lines of business—sales, marketing, customer service, finance, HR, and more.

To foster a strong data governance program, companies need to:

  1. Establish a basic definition of data governance.
  2. Build a diverse data governance team.
  3. Identify requirements for success.

what is data governance? definition of data governance

Key Elements for Data Governance Success

To ensure data governance mitigates the risks of poor data management and enables a company to effectively utilize its data assets, organizations must understand the key elements of data governance success, including:

  • Commitment and ongoing support from all senior leadership for a plan that clarifies responsibilities and accountability (persona-based metrics) and properly sets expectations in line with business goals
  • Clear, measurable metrics, starting with a basic inventory of terms governed and data quality statistics
  • An applied agile management methodology that demonstrates success through short-term goals, so all participants can track ongoing progress
  • Constant communication to ensure tasks are completed on time, goals and objectives are met, and stakeholders are informed of progress
  • Data quality with high-integrity information that improves data value, minimizes the compliance risks of bad data, and encourages data utilization

Building a Strong Data Governance Team

Data governance requires a team approach. Here are some of the people you need:

The Leader

The data governance team needs a leader to steer the program. Typically, a Chief Data Officer (CDO) or other senior executive will take on the primary leadership role. The CDO oversees the team, communicating procedures and monitoring success. CDOs ensure that data governance efforts stay on track, on budget, and on time, and generate the expected ROI.

Departmental Data Managers

Under the CDO is a group of data managers from different departments – sales, IT, human resources, marketing, finance, etc. Together, the CDO and the data governance managers create and establish data governance processes, policies, and procedures.

What Data Governance Teams Do

As a group, the data governance team:

  • Establishes common data definitions in a business glossary
  • Builds data catalogs
  • Institutes and monitors data quality controls
  • Creates governance metrics
  • Meets compliance standards
  • Assigns roles and responsibilities to data owners, users, and stewards

Typically, these teams are also responsible for ensuring data integrity remains intact as information flows across a business’s data supply chain. Team members handle the analysis of data sets, assemble easy-to-read reports for business users, and answer any outstanding data questions. Data users must then follow all established guidelines defined by the data governance team and report any data anomalies they find to the right data owner. All this makes the data governance team critical for success.

Laying the Foundation for Data Governance Success

By understanding the definition of data governance and the importance of taking the steps necessary to build a strong program, businesses can quickly turn data into insights and gain a competitive edge.

Want to help your organization achieve its strategic goals by leveraging data more effectively? Read our free ebook primer today, Data Governance 101, to learn more about creating a successful data governance program for your organization.