What is Data Governance?

Data governance is a term that has become increasingly relevant as businesses and governments rely on vast amounts of data to function. There are many nuances and subsidiary issues involved in data governance, but this article will attempt to stick to a simple course. What is data governance and how does it affect organizations?


The Definition

Data governance is defined as a “strategy for organizations to ensure that the data they use is clean, accurate, usable and secure.” Businesses ( micro-data-governance) and governments( macro-data-governance) make their decisions based on the data they receive. If the data is unreliable, the organization could make poor decisions. One might think of the issue that plagued the George W. Bush administration regarding “weapons of mass destruction.” The data that was used to make far-reaching and serious political decisions were found to be faulty. Data governance is a system of rules that is used to decide if data rises to the appropriate standards and then dictates how that data is stored and used to make decisions. The term could refer to the process, to the rules themselves, to the hierarchy of decision-making or even to the accountability and enforcement process.

Why It’s Needed

For both types of organizations, governments, and businesses, the collection and use of data are imperative. Considering the business level, a Forbes article said that two-thirds of businesses have “undergone or are preparing to undergo, a full digital transformation.” The organizations are collecting every scrap of data available about consumers as a whole, about their customers, about product standards and supply management and many other things. They use the data to make predictions about markets and about the availability of resources, among other issues. If the data is faulty, the decisions could be useless, or even harmful.

The same article claims that 85 percent of the data collected by organizations is redundant, obsolete or trivial, and that 41 percent of the stored data has not been accessed in three years.

Enforcing the Rules

Data governance rules involve permissions to access, change or analyze the data. The rules are tailored according to the needs of the department using the data. Most organizations are run by boards just as countries are run by governments. Access to data is not granted according to position on a hierarchy; it follows rules of necessity. Those rules must be enforced to protect the interests of the stakeholders ( anyone impacted by the data) in the process. A component of data governance, master data management, is responsible for that enforcement. It decrees which data is cleansed or purged and how it is regulated.

The principles upon which data governance operates are integrity, transparency, auditability, accountability, stewardship, checks and balances, standardizations and change management.

No matter where you look, every wheel seems to turn on the cogs of data. That data system becomes more complex as it becomes larger, and data systems interweave between business organizations and between governments. Companies rely on the data of business rivals as well as on national and international data concerning markets, trade regulations, and other issues. Governments rely on intelligence about other countries. Human service agencies rely on data from hospitals and public health organizations. Some of that data will be incorrect, and some of it will be unrelated to the reasons for which it was collected. Collecting and storing data is expensive; unusable data costs businesses and government. That is why data governance is an important component of organizational management today.