Data is one of the most important assets for businesses today, as it enables business leaders to support and make quick decisions based on facts and trends in their business-as-usual (BAU ); functions and make strategic choices about future growth plans. Given the higher volume of data flow in an organization today, getting the right information at the right time to the right people is crucial to enabling the business to grow and capitalize on new opportunities.
Data governance is not just about data models/structures, but about governing all end-to-end business processes, people and systems – and making appropriate improvements to have a better experience and increase operational efficiency. One of McKinsey’s recent reports titled “The Data-driven company of 2025′ pointed out that by 2025, most employees will use data to optimize nearly every element of their job. Intelligent processes and seamless interactions between humans and robots are likely to be as ubiquitous as corporate balance sheets.
Why is data governance essential to the success of organizations?
On a day-to-day basis, data helps to better organize and bring operational efficiency. This allows companies to gain a competitive edge over their industry counterparts. The information can be used for market research and price optimization to provide an improved customer experience.
An enterprise data governance program is necessary for regulatory compliance, standardization, and to protect your business and its customers from abuse. Contextualization, consistency, and reliability are critical for any large-scale organization as the same data powers next-generation business platforms with AI/ML capabilities. It’s a collaborative, focused, and ongoing approach that lets you discover and track data, understand it in the right context, and maximize its security, reliability, and usefulness.
Datafication of the first digital organizations
Business datafication enables organizations to improve their operations to increase efficiency and revenue. It can help organizations run their day-to-day business optimally by having micro-level visibility and help vendors stay competitive by streamlining operations. Therefore, to build a data-driven organization, companies must adopt a progressive and sustainable strategy based on maturity.
Here are the five critical steps for digital-first organizations:
- Companies are generating data at an exponential rate. According to Statista, the overall volume of data in 2020 was 64.2 zettabytes, with an expected increase to 181 zettabytes by 2025. Thus, developing a data collection strategy with a holistic view must be aligned with your business objective is of utmost importance.
- Legacy data obtained through manual processes typically lacks consistency, accuracy, thoroughness, reliability, and relevance, making the information questionable for strategy development. Additionally, managing legacy data in an electronic or digitized form could be difficult as it is mostly “unstructured” and exists in the form of documents, drawings, or text. Datafication (analog to digital), will help digitize these historical data obtained through manual processes, which will bring agility and qualitatively contribute to decision-making.
- Going forward, companies should define processes for each part of the organization (finance, purchasing, legal, customer, sales, marketing, employees, HR, recruitment, production, social, connected devices, etc.) so that data is collected in a structured way and in real time. The distinct and well-organized architecture of structured data makes it easy to access and understand. If users have a basic understanding of the subject, they will be able to analyze the data.
- Automation can help companies increase productivity in all departments, from production to sales, and avoid unnecessary errors. Different sub-functions have varying opportunities for improving performance through automation, and technologies are needed to fully realize this potential. The secret for companies considering automation is to identify the processes that require technical intervention, and the efficiencies and results it can bring. Business leaders need to create business platforms with automation and analytics capabilities for better visibility into efficiency and to help drive business growth.
- The strategic, tactical and operational levels of companies are impacted by data governance programs. Therefore, data governance programs should be viewed as an ongoing, iterative process to effectively manage and use data within the context of the business and in collaboration with other data projects. Organizations should review and optimize their data governance strategies quarterly.
Companies that have digitally transformed using data as an asset will possess a competitive advantage over other companies operating in their industry and will be seen as innovators and leaders in their respective industries. Therefore, companies need to perform detailed data analysis, create quality benchmarks, and implement improvement initiatives.
The article was written by Munishk Gupta, Executive Vice President, Fulcrum Digital Inc.