Data governance practices are essential for managing data as an asset. These practices
establish repeatable, measurable business processes and manageable policies for
improving data quality. Data governance helps companies meet regulatory compliance
mandates while improving revenue opportunities and customer and partner relationships
through the power of higher quality information.
Despite the universal acceptance that data governance practices are worthwhile,
businesses have historically bypassed the discipline in favor of other initiatives
that more directly impact the bottom line or provide an immediate return on
The growing requirements for data privacy and security have altered this landscape
for the modern enterprise. Today's commercial businesses are being driven into
data governance action by legislation such as the Gramm-Leach-Bliley Act and
the Sarbanes Oxley Act.
Even with these legislative motivators, data governance is at best inconsistent.
Most businesses require a guiding hand to assist them with the best ways to
achieve success. Once again, companies are discussing the value of data to corporate
operations and to gain insight and visibility into corporate performance. However
legislative motivators have created a tipping point where companies must ensure
they are protecting consumer privacy preferences and other personal data.
Why Companies Struggle
Although some companies today are doing a good job with data governance, they
are the exceptions and not the rule. The big question is why do companies continue
to struggle with this practice when the proper management of company data will
increase revenue, improve customer and partner relationships and company operations,
and assist with regulatory compliance issues?
One reason is that many businesses are short sighted because they operate on
a quarter-by-quarter revenue model. In addition, most publicly traded companies
are focused on ensuring strong short term stock performance. These objectives
conflict with data governance initiatives, which usually have a less direct
ROI cycle, and are competing for precious resources with other corporate programs
that promise more immediate revenue, efficiency, or profitability benefits.
Another reason is that data governance and sharing data between product groups
or divisions of the same company can be highly political. Often, business leaders
that become territorial about their customer data are unwilling to share data,
even for the betterment of the greater good. For instance, imagine a software
company that offers two types of consumer applications. There may be natural
relationships between the products which could afford the company the opportunity
to cross sell to an existing customer base, but the business executive of Division
A refuses to share his customer data because he is not rewarded based on the
performance of Division B. This type of "turf war" happens frequently
and extinguishes an opportunity for the company, as a whole, to perform to its