Subscribe

Data under governance magnifying glass

Governance of data management ensures the best state of data is available for effective corporate performance management.

Yolanda Smit
By Yolanda Smit, strategic BI manager at PBT Group.
Johannesburg, 30 Nov 2015

After the 2008 global financial crisis, a spotlight was turned on that illuminated the shortcomings of fundamental corporate governance practices. From the wreckage rose the updated Basel III framework for financial services organisations, and SA's own Financial Services Board started revisiting regulations with new fervour.

All these new regulations that keep popping up, like the legislative changes in Protection of Personal Information (POPI), National Credit Act, Consumer Protection Act, etc, have forced corporates into a mode where many diverse governance and compliance initiatives dominate the companies' strategic initiatives lists.

POPI specifically started to push the focus from governing operational activity to governing what organisations do with data. But, do not think POPI is the only legislative driver in the data space at the moment. The Basel Committee also jumped on the data wagon with regulation BCBS 239, with 11 principles for effective risk data aggregation and risk reporting with which banks must comply by 1 January 2016.

Governance of data management is extremely important, not only to ensure the best state of data is available for effective corporate performance management. It also ensures data is being used optimally by those authorised to access the data, and that they, then, only do with the data what they are mandated to do.

Spot the difference

So, what is the difference between governance and management? Why does it feel like management responsibilities are pushed to the backburner, while governance is elevated to the top priority?

The CIO Magazine clearly distinguishes between management and governance: "Management is the decisions you make; governance is the structure for making them."[1]

Therefore, governance is simply the process of intentionally deciding how to manage data, setting the rules and defining the mechanisms for management. Once the governance structure is defined, continue to actively manage the data, and govern (ie, monitor and evaluate) the managing practice regularly to ensure all management stays within the framework defined through the governance capability.

In light of this definition, the need for data governance is even more evident in all companies. In large companies with a diverse management team, each with their own style and interpretation on best practice, governance minimises uncertainty, ambiguity, and conflict through a standard framework for management to enable effective performance management across all functions.

In smaller companies that may have a higher turnover of managers, effective governance again provides continuity and protects the operational momentum of the company by preventing "going back to the drawing board" every time a new manager takes over. I've worked with a client for several years and leadership of the respective department has changed at least four times. With each change, all strategies, policies, standards, etc, change to adapt to the latest manager's perspective of best practice and standards. This can be very disruptive if the department is kept accountable to a five-year strategic plan and management changes in between.

Clear and present data

Data governance, in its simplest form, just aims to make the implicit rules - which already exist regarding data management - explicit, and ensure it aligns with basic conditions and legislation. It also promotes alignment with industry best practices according to the company's appetite.

It seems overwhelming if one starts to research the idea of setting up a data governance programme, and discovering the sheer volume of frameworks, policies, procedures, standards, committees, etc, that has to be established. All of that paperwork sounds very academic, not adding any benefit to the company's bottom line.

However, in my experience, implementing a data governance capability in a company need not be a mountain that cannot be summited. The most crucial thing is to understand the intent of data governance and then implement the framework and structures in a fashion that aligns with the existing corporate culture.

Governance minimises uncertainty, ambiguity, and conflict through a standard framework for management.

I've been involved in initiatives where data governance is implemented with all the possible bells and whistles, with reams and reams of policies to be written and reviewed by multiple committees before being implemented. These larger projects are usually for larger enterprises, which fall in industries requiring more robust governance, such as the financial services industry. However, I've also been involved in smaller enterprises, where the culture is far more agile and entrepreneurial. In these companies, data governance can quite easily be implemented in a lean, non-invasive fashion.

Regardless of the size of the enterprise or the data governance programme, the benefits are definitely more far-reaching than just staying out of trouble with regulators. An effective governance programme results in significant process and resource efficiencies obtained throughout the company when various staff members scattered throughout the company no longer duplicate data management efforts unwittingly, and there's no more guessing and dawdling when a resource is faced with a problem that he or she is not sure how to resolve, who to escalate to, how to escalate it, etc.

Effective data governance creates a sense of credibility and reliability in the data throughout the company and can even lead to business innovation that effectively puts data as an asset on the balance sheet where it belongs. Finally, effective governance means effective data management, which results in a reputation as a trusted data processor in any industry, which will lead to customers being far more comfortable to engage and volunteer their data when the company's reputation convinces them that their data is safe.

Do not let the magnifying glass that government and regulators are increasingly pointing at data and data practices paralyse you with fear. Rather embrace the essence and intent of data governance and start implementing it proactively so the rewards can be reaped sooner rather than later.

[1] CIO Magazine, 15 Sept 2002, p 50

Share