Unlock business value through data governance
A practical approach to sell data governance within your organization
Quantifying the business value of data governance is often challenging due to its intangible nature. Having insight into this business value is, however, of paramount importance to create and maintain business buy-in for your data management initiatives.
Data management as a critical business capability
Data is a vital enterprise asset and occurs in high volume and variety. The potential business value of data makes data management a critical enabling capability to build. Data management is the practice of managing data as an enterprise asset throughout its entire lifecycle. Often introduced as the solution to regulatory pressure, such as GDPR (General Data Protection Rule) or KYC (Know Your Customer), data management now gains more and more ground as a driver for business value itself. Determining the business value of data management, however, continues to be an organizational struggle.
Challenges to quantify the business value of data governance
Data management advocates are confronted with constant pressure from the business to clearly articulate the need for significant investments to increase the data management maturity within their organization. This is partly due to the fact that some data management functions are inherently more abstract and hence it’s more difficult to quantify the business value. Determining the business value of data governance is specifically challenging. In contrast to e.g. the data quality function, data governance is primarily active on the strategic level of the organization and therefore often enables intangible business value (figure 1).
For example, better decision making is one of the typical intangible business values of Data Governance Boards. But how does an organization objectively quantify that better decisions are made as a result hereof? Organizations need to define a clear set of KPI’s to effectively quantify intangible business values. A data governance business value model can be used as a construct to structure and categorize (intangible) business values and to define the resulting KPI’s.
Data Governance Business Value Framework
An example of such a construct is the Data Governance Business Value Framework (figure 2). The framework: i) supports visualization of the causality between data governance and business value, 2) allows for effective structuring and categorization of business value and KPI’s of data governance, and iii) can be used as an effective discussion construct to create a clear dialogue with the business on the business value of data governance. Continuing on the used Data Governance Board example, one of the key resulting business values is better decision making. Within the Data Governance Business Value Framework this business value is categorized under “Management control” and is one of the results of proper data governance.
Quantifying business value of Data Governance Boards
Having insight into the business value of data governance prior to its implementation is of paramount importance in obtaining business buy-in from the start. Breaking down the business value into measurable KPI’s is critical to quantify intangible business value. Improved decision making as business value can be for example decomposed into i) the increased number of decisions made, ii) the increased number of fully consensus enterprise wide reached decisions, and iii) a decreased number of no decisions made / no consensus reached (figure 3). The identified business values and resulting KPI’s should be foremost dictated by an organization’s strategic drivers – improving KPI’s should indicate progress in light of an organization’s strategy.
How do you create lasting data management?
In this blog post we have provided some practical insights and tools to help you more effectively sell data governance within your organization and to clearly articulate its business values. In our next Enterprise Data Management blog series, we will deep dive into the importance of assessing the (change) readiness of an organization to effectively implement a data management strategy. How do you create lasting data management change in and impact on your employees?
Are you looking for best practices that can help you sell data governance within your organization or simply want more information on enterprise data management? Please contact He-Yu Hua at +31(0)6 8333 0408 / HHua@deloitte.nl or Patrick Verweij at +31(6)2253 8695 / PAVerweij@deloitte.nl