Instinctively, I know that good data generally leads to good decisions and bad data often leads to bad decisions, whether in our business or our professional lives. (Jeez, if I'd only known he/she was married!) Companies spend lots of money and other resources on systems that prove to be pretty pointless unless they are populated with good quality data (e.g., business intelligence, customer relationship management, enterprise resource planning) .
But I hadn't necessarily thought of data as the key to business process improvement.
That changed after I interviewed Ian Rowlands, senior director of product management for ASG Software Solutions, a company which, along with its client HSBC, just snagged a Best Practice Award for Data Governance from The Data Warehousing Insitute. HSBC uses ASG-Rochade, a metadata repository, to manage information about its data and systems across the enterprise.
Smart organizations use data governance to create a kind of consolidated information platform upon which they better manage their business, says Rowlands:
Organizations may do great work at standardizing all of their processes. But if they do it in silos, they end up with a disconnect between the various pieces and they find themselves having to go around and do rework. The underlying information base is going to be the critical key to IT and business success. And that's where data governance gets framed. It's part of making sure that the information base is consistent.
Three primary drivers for data governance, says Rowlands, are a desire for data quality, a need to comply with regulations such as Sarbanes-Oxley and the Health Insurance Portability and Accountability Act (HIPAA), and a growing recognition that data governance can increase business agility.
The biggest challenges with data governance involve people and processes rather than technology, says Rowlands, a point echoed by Tony Fisher, CEO of master data management provider DataFlux, whom IT Business Edge blogger Loraine Lawson grilled during a fascinating two-part interview. In the first part of his interview, Fisher contends that not only is master data management (an aspect of data governance) not about technology, it's not even about data. Huh? He says:
... the real thing that you have to get your hands around is, "Why am I doing MDM and how is that going to improve my business?" And that is the way that everything else starts to fall into place. If you know what you're doing and why you're trying to do it, then you can easily define your measures for success, you know when you're successful, you continue to get the support of the executives, you continue to get funding -- but if you're not doing it for the business, if you're just doing it to cure ills of the task and the problems with integration that you have created over time, it is just another IT expense and it's not the kind of thing that is going to be pervasively integrated throughout your organization.
Fisher contends that many organizations wrongly address data problems, such as quality or consistency, before they ever consider the business processes they are trying to improve. Fisher estimates that perhaps just 5 percent of organizations are able to effectively connect their data with their business processes.
Fisher suggests taking these steps:
- Have business folks and IT sit down together and review an organization's applications and the data contained within them.
- Evaluate your systems and determine how well they communicate -- or don't -- with each other.
- Then and only then, begin introducing technologies such as data profiling, data discovery and basic data cleansing to help create data consistency across the organization.
Many organizations will struggle with the first step, says Fisher. He uses CRM as an example:
You have to get people to answer very basic questions and agree on very simple things like, what is a customer? What is a customer, oddly enough, is a very difficult thing for a lot of organizations to address because if you're in finance you have one thought about who a customer is - a customer is someone who has paid us money. If you're in marketing, by definition a customer is anybody we send a product to. Well, the product of marketing is collateral and information, so they are going to want all the prospects to be customers. Sales is a little bit different, but even in sales they have confusion. Is the company I deal with the customer, or are the individuals in that company customers?