The way businesses manage information is rapidly changing. It’s no longer locked away in silos with the IT department acting as the gatekeeper. Leading enterprises are instead democratizing the use of data, so the entire organization (and trusted external partners) can benefit from the deeper insights and better decision-making that come from shared information and analytics applications.
However, data compliance requirements are greater than ever as legislation such as Australia’s Notifiable Data Breaches scheme and the European Union’s General Data Protection Regulation (GDPR) raise the bar for organizations. Information security threats are also on the rise, as are consumer expectations of privacy, following Facebook’s Cambridge Analytica debacle and other high-profile data leaks.
So, how do you balance today’s business imperative to share data with the need to protect sensitive information?
The truth is you can do both with good data governance. In fact, a 2017 big data survey by Aberdeen Group found a direct correlation between good data governance and business performance. The study identified data governance ‘leaders’ and ‘followers,’ with leaders reporting year-on-year organic revenue growth of 25 percent, compared with 10 percent for followers. In addition, leaders managed to reduce operating costs by 19 percent, compared with just 6 percent for followers.1
Why Data Governance 1.0 is Failing
What does it take to become a data governance leader? For starters, it means ditching the old model of keeping information in silos.
Business functions no longer work in isolation, if indeed they ever did. However, the need to transform data governance is becoming more urgent as organizations adopt agile and other new ways of working, and cross-functional teams become more commonplace.
Employees now see collaboration and data-sharing as an essential part of doing business. It’s hardly surprising the Aberdeen survey found the biggest data-related challenge facing business users, regardless of their role, was the difficulty of accessing information kept in silos.
Complicating matters further are the new types of data flowing into enterprises. The average organization deals with 31 unique data sources, according to the Aberdeen study. It also found an increasing focus on unstructured data, along with external and machine-generated sources such as social media and Internet of Things devices.
Clearly, the old silos have to go, but not before putting in place a new data model with controls to protect confidential and sensitive information.
It’s Not Just About Managing Risk
According to Forrester Research, this new model—commonly called ‘data governance 2.0’—is an agile approach to data governance with “just enough controls for managing risk” but that “enables broader and more insightful use of data required by the evolving needs of an expanding business ecosystem.”2
However, data governance 2.0 is not just about managing risk or protecting sensitive data. Governance should be an enabler, not a bureaucratic roadblock to innovation. For data, that means using governance to improve the quality, timeliness and relevance of information for everyone in the organization.
Implementing the right governance policies will result in cleaner, more accurate information. It will ensure everyone receives the data they need, when they need it, so they can act more quickly and confidently. It will also ensure teams aren’t swamped with unnecessary information and reduce the risk of data leaks.
The ‘governance leaders’ in Aberdeen’s survey reported data accuracy of 91 percent, compared with 71 percent for followers. The leaders also reported that they delivered 75 percent of their organization’s data on time, compared with 63 percent for followers.
How Data Governance 2.0 Works
Underpinning data governance 2.0 is the premise that to succeed in modern business, data must be shared. It also recognizes that individuals within organizations have different data requirements.
The old, inflexible ways of managing data must be replaced by new policies and tools that can:
- Capture and crunch a rich variety of data quickly, eliminating bad and redundant data along the way
- Anonymize sensitive and personal information, while allowing access to data for analysis
- Support rules and roles so the right data is available to the right people at the right time and in a way that’s meaningful to them
- Ensure legal accountability is understood by all parties and data use is auditable.
Building a system that can do all this would be time-consuming and expensive, which is why data-sharing and governance platforms are becoming popular among leading enterprises.
As well as enabling the controls needed for data governance 2.0, these platforms can also help businesses uncover new insights by supporting advanced tools and techniques, such as correlating data from different sources.
These platforms bring a much-needed utility to data—by balancing the opportunity and risk of sharing data on a case-by-case basis, centralizing internal and external data transactions, and driving competitive advantage through safe, privacy-compliant data enrichment. And it’s this utility that will define the winners and losers in today’s digital, data-driven market.
The stakes have never been higher when it comes to managing data. You can’t afford to get this wrong—to leak data, break customer trust or harm your own commercial interests.
From a perceived ‘back office’ function just a few years ago, data governance has become an essential launching pad for future business applications, but even in the short term, it will deliver a win-win for businesses and their customers.
For more information about what a next-generation governance platform for data sharing can do for your organization, see Data Republic’s ebook on data governance.