Data Governance

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Data Governance Keyvisual

What Is Data Governance?

Data governance defines who does what in data management. It specifies those activities that must be undertaken to manage data as a real asset. In addition, it determines who is responsible for which data management activity in the company. A solid data governance also determines the accountabilities, responsibilities and decision rights for the people who take care of data.

Usually the following situations indicate that an organization suffers from unclear or non-existent responsibilities related to their data, meaning a lack of an effective data governance approach:

  • It is unclear who is responsible for key data objects (e.g. customer, product, employee) and their quality
  • Data quality is poor (e.g. missing attributes, outdated values)
  • Data management activities are performed ad-hoc and are not documented

The problem with the term "governance" is that asking three different people what the word means, there will be at least four answers.The following definition reflects the real-world experiences from many companies and data initiatives, and is grounded in CC CDQ research

Data Governance defines who does what in data management

  1. Firstly, governance determines the activities that must be undertaken in order to manage data like a true asset
  2. Secondly, governance defines who in the organization takes care of which data management activity
  3. Thirdly, solid data governance also determines the accountabilities, responsibilities and decision rights for the people who take care of data. 

Best Practices: After defining responsibilities on paper, select and train the people who will take care of the data management activities on a day-to-day basis. It is recommended to select these individuals with utmost care. All too often, the people already overloaded with work also end up taking care of data. If that is the case, it will be impossible to achieve the agreed objectives, for instance, related to data quality.

Why Do We Need Data Governance?

The benefits of an effective data governance framework are threefold:

  1. Firstly, having clear responsibilities for data and data management speeds up the implementation of projects. Many projects depend on data, in particular the ones that push enterprise-wide business process integration, establish analytics, or address compliance requirements.   
  2. Secondly, data governance is also the foundation for robust and sustainable data quality improvements. If it is not defined what good quality looks like (i.e. creating governance policies and guidelines) and ensured that these standards are adhered to, data quality is left to chance.
  3. Thirdly, implementing effective data governance also contributes to increasing data’s value. If data is not used, it has no value. Data governance ensures that data issues are solved and that data is “fit-for-purpose" for being used in business processes, for decision-making and in business models.

How to Develop a Data Governance Framework (Checklist)

Here is the good news: Defining a data governance framework isn’t rocket science. There are established guidelines for setting up data governance, for instance the CDQ Data Excellence Model or the DAMA DMBOK. A proven approach to follow: Firstly, defining which data management activities are to be undertaken by whom in the organization. Secondly, deciding how many people are needed to run the governance plan on a day-to-day basis. Thirdly, setting the mandate and decision-making rights for the people defining and monitoring the governance policies and standards. Fourthly, defining an implementation plan, including training, communication and change management activities. Finally, select the people executing data governance.

The required activities are defined in CDQ’s data management process map. The map includes operational activities (e.g. creating and maintaining data), tactical activities (e.g. building up and running data quality management) and strategic activities (e.g. developing a data management strategy). To be effective, the activities from the process map must be assigned to employees in the organization. However, we do not recommend assigning the activities directly to individual employees. Instead, we advise to allocate certain sets of activities to specific data management roles (e.g. a Data Steward) and to assign these roles to individual employees. A proven tool that helps to assign the responsibilities to roles is the RACI matrix (i.e. Responsible, Accountable, Consulted, Informed).

To obtain management approval and budget, it is necessary to estimate how many employees are needed to execute effective data governance. The best way to determine that figure is to estimate the overall workload. In a typical data governance setup, there are some full-time positions, typically in a central data management team. In addition, there will also be some employees in the business units and support functions that cooperate with the central team. However, these are typically not full-time data management positions.

To be effective, the people executing the data management activities need a clear mandate. The mandate defines the authority of the data management roles. If it is left unclear what they can or cannot decide, the entire governance setup will not work. In addition, it is necessary to define decision-making boards where stakeholders of the organization come together and align on data management activities and issues. This is needed because data is a shared resource, that is used by various organizational units.

Implementing data governance requires an organization to change. Therefore, change management activities are required to support the implementation. These include an effective communication strategy tailored at different stakeholders. In addition, a plan to train the employees involved in data governance is also needed.

The best data governance concept is likely to fail if the wrong employees for the data management roles are selected. Business understanding is key and often more important than technical / IT knowledge. At the end of the day, data managers often bring people from diverse backgrounds together, so strong communication skills are a must.

Recap: 

What Are Typical Data Management (Data Governance) Roles?

Data governance introduces new roles (or makes them explicit). The following role model is grounded in CC CDQ research and based on practical experiences in many companies and data initiatives:

  • Data stewards support the business departments in the desired use of data. Their role is often organized by data domains (e.g. customer data, vendor data, material/product data). Data stewards evaluate requirements and problems with data, and support projects (e.g. SAP S/4HANA implementation) and digitalization initiatives (e.g. online shops, customer portals) as experts for their respective domain. Their role can be split into:
    • Business data stewards are responsible for measuring and reporting the data quality, defining guidelines for creating and maintaining the data and documenting the data in a data catalog / glossary. The Data Steward's role is organized by data domains (e.g. customer data, vendor data, material /product data).
    • Technical data stewards (often called data architects) are responsible for the data model and data lifecycle across IT systems. They provide standardized data element definitions and formats and profiles source system details and data flows between systems. They typically work across domains.
  • Data owners specify the business requirements on data and on data quality. The data owner role is typically assigned to senior managers in business functions or division. For example, the head of central procurement typically assumes the data owner role for supplier master data, and the head of HR is data owner for employee master data.
  • Data operators operate the data life-cycle based on the defined standards. They create and maintain data. This role is often assumed by employees in the business units, or in dedicated support functions, for example in shared service centers.
  • Executive sponsors provide sponsorship, strategic direction, funding and oversight for data management.
  • The Head of Data Management (or Chief Data Officer) is responsible for supporting the strategic data management board in defining a data management strategy and setting up a data governance. This role also manages data stewards on a day-to-day basis.

Assigning these roles in an organization depends on many factors – most importantly, the maturity of the organization and the mandate for data management. In practice, many variants can be found. But independently on how roles are assigned, three groups must very closely work together: data management teams, business functions/lines as well as the IT organization.

Roles in a central data management team

A central data management team typically consists of several Business Data Stewards. It is not uncommon to find also a Technical Data Steward (Data Architect) as part of a central data management team, although this role may also be assigned to enterprise or data architects in the IT organization. It is also possible to have Data Operators as part of a central data management team to bundle resources.

Typical data management roles in a central data management team

Role Data Domains Responsibilities
Data Steward
  • Usually a data steward is responsible for one or several specific domains
  • Responsible for measuring and reporting the data quality, defining guidelines for creating and maintaining the data and documenting the data in a data catalog / glossary
  • Also supports projects and digitization initiatives as expert for his respective domain
Data Architect
  • Typically works across domains
  • Takes care of the more technical aspects of data management (e.g. modelling a data lifecycle across IT systems)
Head of Data Management
  • Typically, responsible for multiple domains
  • Responsible for defining a data management strategy, setting up a data governance and managing the Data Stewards and Data Architects on a day-to-day basis
Data Operator
  • Usually enters and maintains data for one or multiple specific domains
  • Responsible for creating and updating data

Decentralized roles in the business units and support functions

To be effective, any central data management team needs to be linked to the business units and support functions. After all, this is where most of the data is created and used. Depending on the size of the organization, it might be necessary to create one or more roles to ensure the link. Some organizations have established a Business Unit or Divisional Data Steward who ensure that the activities of the central team are aligned with the needs and activities of the business units and support functions. Other organizations have defined Data Experts who are contact persons for the central team because they have very specific knowledge about certain data attributes (e.g. health and safety data, tariff numbers for customs). In most organizations, data is created and maintained in the business units and support functions by Data Operators.

Typical decentralized data management roles in the business units and support functions

Role Data Domains Responsibilities
Business Unit or Divisional Data Steward
  • Usually a data steward is responsible for one or several specific domains
  • Ensures that the activities of the central team are aligned with the needs and activities of the business units and support functions
Data Expert
  • Typically works for one domain
  • Is the main contact person for the central data management team because he has very specific knowledge about certain data attributes (e.g. health and safety data, tariff numbers etc.)
Data Operator
  • Usually enters and maintains data for one or multiple specific domains
  • Responsible for creating and updating data within the business unit and support functions
Data Owner
  • Typically for one domain
  • Overall responsible for data quality
  • Typicalle to senior people in the organization

Additional roles

Since data is processed and stored in IT systems, the link between the data management roles and the IT roles is important. Therefore, it is important to align the Data Steward roles with the IT roles, for example a Demand Officer or Solution Architect. Data Management roles also need to closely work with process management roles, for example a Process Owner and Process Manager. After all, business processes require high-quality data to operate efficiently. In addition, process changes typically have implications on the data that is used in the processes. Finally, with analytics becoming ever more important in most organizations, the data management roles must be linked to the Data Scientists and Data Analysts roles.

What Are Typical Data Governance Boards?

Data is a shared resource, that is used by several business units and support functions. Consequently, data-related priorities, requirements and issues must be aligned between them. This alignment happens in data governance boards. Most organizations require one board for strategic data management topics and one or more boards for tactical data management issues.

Strategic data governance board

This board (the name varies across organizations) is the central decision-making board in data governance that aligns and approves the data management strategy, annual objectives and budget. It also tracks the progress of the data management activities and resolves issues that had to be escalated. Oftentimes, the board consists of data owners from the business units and managers of the support functions as well as the Head of Data Management / Chief Data Officer. It is possible that these roles already meet in other boards or committees. If so, it should be considered whether an additional strategic data management board is really needed or whether the topics to be discussed can be integrated into the other boards or committees.

Tactical data governance board(s)

Tactical board(s) are needed to align more operative data management issues. These can include changes to the data model that affect several business units or the prioritization of data quality issues that must be resolved. Depending on the size of the firm, it might be necessary to have several tactical boards. If that is the case, they are typically established per data domain (e.g. one board for customer data, one board for material/product data etc.) Tactical board(s) meet more frequently than the strategic board. Members are the Business Data Stewards and Technical Data Stewards / Data Architect from the central data management team as well as the Business Unit / Divisional Data Stewards and / or Data Experts.

What Is a Robust Data Governance Mandate?

The mandate defines the authority granted to data management roles within the organization, and from this, the responsibility. This is particularly critical for the central data management team. Are they allowed to enforce the standards and guidelines for data creation and maintenance or are they dependent on the goodwill of the business units and support functions? The type of mandate has a significant influence on the overall impact of data management on the organization. Like the mandate of a project management office (PMO), four types of mandates can be distinguished.

It is not uncommon that the authority of the (central) data management team is not defined. It is unclear what they can decide or how they can influence the organization to improve data management practices. If there is no clear mandate, discussions about data management priorities and initiatives tend to be endless. The problems with having no clear mandate for data management is often the trigger for defining and implementing a data governance.

If the mandate is to support, the data management team provides templates, best practices and access to information. However, the influence on the data management activities in the business units and support functions is very low. They get to choose if they want to cooperate with the (central) data management team or not. Since data is a shared resource that is used across organizational boundaries, the mandate to support is not very effective.

In this mandate, data management has the authority to align and coordinate all data management activities across the entire organization. This helps to reduce duplicate work. A central data management team with a mandate to coordinate can also advise on methods and best practices. However, it cannot enforce them.

In a directive mandate, data management has the authority to enforce data management standards through various means. Firstly, it defines the framework, methodologies and tools to be used for data management across the organization. Secondly, it also monitors whether the standards for creating and maintaining data are upheld. If not, it can sanction non-compliance, for example by revoking access to IT systems.

Contacttext: 

Best Practices: The mandate should be defined early in the data governance journey. If the difficult questions about authority and decision are not discussed upfront, they will return during the implementation of the data management initiatives. Since these discussions can’t be avoided, we recommend having them early in a data governance journey.

What Are Data Management Guidelines and Principles?

How and where is the required data quality defined? What are acceptable values for a specific data attribute and what aren’t? How should data be documented as metadata? Data Governance related decisions refer to some fundamental principles of data management. They include standards and guidelines, for instance related to data creation and maintenance, but also more general policies and principles that make employees understand the true importance and value of data.

Data management guidelines, policies and standards (data management rule book)

Guidelines, policies and standards (sometimes also referred to as data management rule books) define how quality is measured, how data is documented (metadata) and how the data life cycle managed. But most importantly, they comprise documents that define, how to create and maintain data correctly. For each data domain, they describe the key data objects with permitted values for the data attributes. For example, if we have a German postal address, is it permitted to shorten the word “street” to “Str.” or is it mandatory to write “Strasse”? Similarly, should the legal form of the company be part of the name or not? These guidelines are relevant for the entire data life cycle and for all systems in which the data is stored or used. Good guidelines, policies or standards are the foundation for high-quality data that is also harmonized across the organization. The key to success is to train the organization and to monitor whether users adhere to the rules. Some rules defined in the guidelines can probably also be coded as validation rules into the IT systems.

Data management principles

Effective and efficient data management requires organizations to change. As known, change is hard. Many change initiatives fail simply because employees don’t understand why they need to change. This is where data management principles come into play. They describe the data management aspiration in easy to understand words and give enough concrete guidance on how to deal with data on a day-to-day basis. Principles also help to communicate the abstract topic of data management in a more tangible way.

Three examples for data management principles:

  1. We manage data as an asset.
    Assets are valuable to any organization because they are critical to the business model. Therefore, they are managed with great care. What is true for assets like financial resources, employees or brand names is also true for data.
  2. We share data
    Data does not belong to a person or organizational function alone. It belongs to the entire organization. Consequently, when we manage data, we think and act in end-to-end processes and beyond organizational boundaries.
  3. We are all responsible for data quality
    Data has the greatest value when it is of high quality. Therefore, we ensure high quality from the earliest time possible (“first time right”). In addition, ensuring high data quality is everyone’s responsibility. It is not only the responsibility of the central data management team.

Best Practices: No one comes to work in the morning to create poor data quality on purpose, but data quality is often the result of ignorance or negligence. Guidelines, policies and standards define what good data quality looks like. Data management principles help to explain why data matters and why it is everyone’s responsibility.

What Is the Difference between Data Governance and Information Governance? 

The simple answer is there is no difference. More details will follow.

Questions about Data Governance? We Will Be Glad to Help You!

Do you have any questions? Our data management specialists will be happy to help you with any questions you may have about data governance. Just contact us!

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