Chapter 3 Business Value of Data Governance

Data governance means different things to different people and organizations. Several definitions are floating around the industry. The niche data governance consultants have theirs, the large system integrators have theirs, and the large global consultancies have theirs.

They all define the same thing just in different ways. Sometimes organizations use the terms “data governance” and “data stewardship” interchangeably. At other times, they use the term, “non-invasive” to describe the approach they take to data governance.

I have my definition and have shared this with you earlier in the first chapter of this book, but let me repeat it here. Please let me explain.

The most important question that begs for an answer about data governance is this:

What does it mean to govern data?

Please take a moment to think about and answer this question. We all know that data governance is necessary, but what does it mean to have your data governed?

The best place to start is to define the term “govern” as it relates to data. To do this, I have taken the FreeDictionary.com definition of “govern” and wrapped the words “to” and “data” around each identifying characteristic—the part of the definition that tells you how that term differs from other terms. This wrapper around the identifying characteristics of the word “govern” makes the definition easier to read, and doing so puts it in the context of data management.

I have taken each of these identifying characteristics of what it means to govern something and placed them in the table below with a description of what governing data means in relationship to the characteristic.

Table 1: Identifying Characteristics of Governing
To make and administer the public policy and affairs of data	Governing data means that data policy takes the form of written and approved (this is a key point) corporate or organizational documents.
	Governing data means that you have a data governance policy. This policy may be hidden under the name of information security policy, privacy policy, or data classification policy (e.g. highly confidential, confidential, sensitive, public data, or something else).
	Governing data means that your organization leverages the effort invested in development and approval of the policy rather than allowing the policy to become shelf ware. As shelf ware, few people know how the policy is associated with the data they define, produce, and use daily.
To exercise the sovereign authority of data	Governing data means that a way exists to resolve a difference of opinion on a cross-business data issue.
	Governing data means that somebody or some group of individuals is the authority or has the authority to make decisions concerning the data.
	Governing data means that an escalation path exists from the operational to the tactical to the strategic levels of the organization for decision-making. Rarely does governing data require escalation of data issues to the executive level.
To control the speed or magnitude of data	Governing data means that data are shared according to the classification (confidential, sensitive, public) rules associated with that data.
	Governing data means that the creation of new versions of the same data is scrutinized closely to manage and eliminate data redundancy.
	Governing data means that people don’t place critical or confidential data in harm’s way by quickly, and without knowing the rules, making copies of data that fails to follow the same scrutiny and governance as data in native form.
To regulate data	Governing data means that appropriate processes are put in place and monitored to manage the definition, production, and usage of data at all levels of an organization.
	Governing data means that proactive and reactive processes are defined, approved, and followed at all levels of the organization. Situations where these procedures aren’t followed can be identified, prevented, and resolved.
	Governing data means that the appropriate behaviors around data are brought to the forefront of your staff members thought processes rather than being pushed to the back of their minds as an “inconvenience” or a “nice to have.”
To control the actions or behaviors of data	Governing data means that appropriate processes are put in place and monitored to manage the definition, production, and usage of data at all levels of the organization.
	Governing data means that proactive and reactive processes are defined, approved, and followed at all levels of the organization and that situations where these procedures aren’t followed can be identified, prevented, and resolved.
	Governing data means that the appropriate behaviors around data are brought to the forefront of your staff’s thought processes rather than being pushed to the back of their minds as an “inconvenience” or a “nice to have.”
To keep under control and to restrain data	Governing data means that access to data is managed, secured, and auditable by classification (confidential, sensitive, public) and that processes and responsibilities are put in place to assure that access privileges are granted only to appropriate individuals.
	Governing data means that all individuals understand the rules associated with importing data into spreadsheets, loading data to laptops, transmitting data, or any other activity that removes data from the native source.
	Governing data means that the rules associated with managing hardcopy versions of data are well documented and communicated to individuals who generate, receive, or distribute these hard copies.
To exercise a deciding or determining influence of data	Governing data means that the right people are involved at the right time for the right reasons to assure that the right decisions are made about the right data.
	Governing data means that the information about who in the organization does what with the data is completely recorded, shared, and understood across the organization. This provides the ability to get the rights right.
	Governing data means that a formal escalation path exists for known data issues that moves from operational (business unit specific) to the tactical (cross-business unit) to the strategic (enterprise) and to the persons identified as the authorities on that specific use of the data.
To exercise political authority over data	Governing data means that somebody or some group of people have the authority to make decisions for the enterprise about data that impacts the enterprise.
	Governing data means that the political nature of decision-making is leveraged in making the tactical and strategic decisions that best benefit the enterprise.
	Governing data means a formal escalation path exists for known data issues that move from operational (business unit specific) to the tactical (cross business unit) to the strategic (enterprise) and to persons identified as the authorities on that specific use of that data.

The statements I’ve listed with each of the identifying characteristics of the definition of the word “govern” should help you get a jump-start explaining what it means to govern data. Once you have answered the question of what it means to govern data, the next question you may hear is:

What’s the best way to govern data?

And to that question you can answer, “The Non-Invasive Data Governance approach.”

Getting the Business to Speak Up

I started this book by saying that many organizations attempt to gain support for formal data governance activities by describing the value data governance adds to their organizations. As you’ll see in this chapter, expressing this value of data governance is important for many organizations to get the go-ahead to begin putting a program in place.

I suggest that you consider what your organization cannot do because the data in your systems, databases, and resources that have accumulated over the years do not allow you to do it. I provided examples of what organizations can’t do in Chapter 1.

The combination of the value you articulate to your business sponsors and the list of things your business folks cannot do becomes a powerful one-two punch of information to share with your potential business sponsor(s).

Who Defines the Value?

Two primary groups of people will define how data governance will add value at your organization:

• First, those who have the responsibility for defining and deploying your data governance program.
• Second, everybody else.

The data governance team (which we’ll cover in Chapter 10), or those individuals who want to form a data governance team, typically take on the responsibility to persuade management that data governance is important and that time, resources, and effort should be spent on putting a data governance program in place. These individuals may not be a formal team at the beginning, but they have an idea for governance and spend significant energy selling the virtues of data governance. This is a common occurrence.

I’m not suggesting that we change how the data governance team operates when it comes to selling the program. I do recommend that this team partner with people in the business areas to define the value of data governance for the organization. The team needs to prompt the business areas to speak up about where they believe data governance will add value for them.

To get the business areas to speak up this way, I recommend that you take these steps:

1. Educate people in the business areas on what data governance is and the approach you’re taking as an organization to achieve the goal.
2. Ask specific questions to prompt them to speak up about things they cannot do and the issues that they live with day to day concerning the data they define, produce, and use.
3. Document people you’ve spoken to and what they said. This demonstrates that the value is defined by the businesses rather than by the data governance team.

This sounds pretty easy on paper, but let’s walk through each of these steps quickly.

Educate the business on your data governance approach

This step requires that you define your approach ahead of time and that your approach is practical and doable in your organization. The approach will often include a best practice, an operating model of roles and responsibilities, an action plan and a communications plan at the least. The approach often includes an inventory of data and stewards and a mapped-out plan for how data governance will be applied through existing and new processes.

This is one place where the non-invasive approach to data governance adds the most value. Start with the Messages for Management in Chapter 1 to assure that data governance is not all about command and control and can be free of these restraints.

Data is a universal business problem. Many business areas will give you time to introduce them to the subject and your specific approach to data governance if they:

• Recognize a problem in the form of something they cannot do.
• Believe you will add value to what they do.
• Know you have their best interests in mind when you work with them.

Learn What the Business Cannot Do

When having conversations with people in the business areas, your mission should be to get to the root of how formalized discipline around data will add value to what they do. Therefore, let’s start there:

• Ask them what they cannot do because of the lack of availability, the quality, or their knowledge about the data.
• Ask them where they get their data, how they spend their time working with data, and if there are things that could be made easier. These questions lay at the core of their pain.
• Ask the business areas to give you permission to use what they tell you in the next steps.

Getting the business areas to tell the data governance team the value of data governance takes a lot of the pressure off of the data governance team. If the team is viewed as working for the best interests of the business areas, this will free up some of the data governance team’s time because the team will spend less time selling and more time building out their program.

Document the business value from the business

The last step is to document and use the information you get from the business areas. It works even better if you can get the business areas themselves to take the information to senior managers to persuade them that data governance is necessary. We all know this doesn’t happen naturally. Typically, someone has to force the issue.

Keep a log of the individuals and business areas you reach out to. Document specifically how they answered the questions from the previous paragraphs and connect the people with what they said. If they gave you permission in the previous step, don’t be afraid to quote them in your presentation of this information to management. Make it clear to management that executives can revisit what the business(es) said to support their business value.

Document the expected business value of what you heard using a formula that works for your organization or the business value statements shared in the next section.

Case Study: Plant Manager Needs Data Management Solution

Every once in a while, a business meeting occurs where a business person explodes with information that helps the person calling the meeting with his or her mission, whatever that mission may be. Let me share one example with you here.

A global manufacturing company was working on gaining support for its data governance program from a select number of plant managers. Some plant managers were in the United States, and several others were located at plants in Europe.

In the first business meeting with a plant manager, the data governance manager began the meeting by explaining data governance and the non-invasive approach. The plant manager absorbed everything the manager and I shared, and it seemed like a typical meeting where a lot of information was accepted quite well.

And then it happened. The plant manager told us that he appreciated that we had taken the time to put him on our schedule. The plant manager said that he had compiled a list of things he could not do because the data of the organization did not support what he wanted to do.

The plant manager shared that he, and therefore the company, could not identify the best place to manufacture certain products because of the cost of raw materials and the cost to transport these raw materials to the plant. He went on to explain that he could not compare costs across regions when it came to distributing product served by different plants in the vicinity. He had a list of business problems that all pertained to needing access to data to help reach key decisions like these.

At the time, I suggested to my client that we should use what the plant manager said to make the case for how data governance would add business value by addressing the issues the plant manager had raised. I also recommended using this information in meetings with the other plant managers to get them thinking the same way.

Getting the business to speak up and make the case for data governance decreases the need for the data governance team to make the case. Instead, the data governance team has the responsibility to get this information to the people making the decision. By letting the business make the case for data governance, no one can say that data governance is an IT project solely intended for IT gain. Data governance becomes a business solution.

Business-Value Statement Samples

When used in the business world, the term, value statement, can be defined as brief verbiage that demonstrates a cause-and-effect relationship between a business action and the business value that action gains. Anybody who has been a consultant or an employee (or anybody who has tried to convince someone to do something) has used a value statement to demonstrate the worthiness of some type of endeavor.

In the information technology (IT) areas of a business or organization, value statements help to convince senior management to use a new type of technology, to put money toward a new vendor package, and to eliminate redundant systems. Value statements are also used to develop or enhance a business intelligence or data warehousing initiative and for other situations that require some level of funding and that we all can relate to. Value statements have now become a major contributor to convincing senior managements of companies and organizations that they should pursue the design and deployment of data governance.

A Non-Invasive Data Governance value statement may be defined as a cause-and-effect relationship between formalizing existing levels of governance (and putting a non-threatening program in place to govern data) and the business value that will be gained by governing data in this manner.

Value-Statement Formulas

Over the years I have used a set of value statements to demonstrate the value of Non-Invasive Data Governance programs to clients. The formula I use for Non-Invasive Data Governance value statements is brief and to the point:

Organizations that do (X)
demonstrate1 business value improvements through (Y).

Where (X) represents clearly defined actions and (Y) reflects business improvements that result from the actions.

In keeping with the Non-Invasive Data Governance approach, I keep my formula for value statements short and sweet. I do this because the idea of a longer or more complex value statement offers the impression that there are many components to the value that comes from data governance, and that deriving value from a data governance program is more complex than it needs to be. I prefer to keep my value statements to two parts to reduce the appearance of complexity.

The point of this formula is to demonstrate that using an easy-to-use tool like a value statement, with a consistent formula for reading and understanding, articulates simply the value of a Non-Invasive Data Governance program to senior management or anybody in the organization who can influence change.

Business Value Statements for Non-Invasive Data Governance

Here is a list of Non-Invasive Data Governance business value statements I’ve used in recent presentations. The (X) component of my value statement formula is shown in bold, and the (Y) component of my formula is shown in italics.

• Organizations that have senior managers and business unit Leaders who understand, support, and offer direction for a Non-Invasive Data Governance approach and programs assure themselves of less risk and better acceptance by general staff around the management of data for the short- and long-term success of the program.
• Organizations that identify, record, and make available information about the people who define, produce and use specific core and corporate critical data demonstrate efficient and effective coordination, cooperation, and communications around these data.
• Organizations that document information about highly valued core and corporate critical data elements demonstrate improved understanding and business use of these data.
• Organizations that improve their ability to share information about data demonstrate better ability to respond to changes in regulatory and audit requirements.
• Organizations that make certain that the appropriate people are involved in specific tasks related to data management demonstrate the ability to eliminate replication and misuse of data, and improve their ability to integrate data based on corporate critical data element standards.
• Organizations that define and follow set processes and standard operating procedures for governing data—including requesting, sharing, defining, producing, and using data—demonstrate the ability to ensure that data will be shared according to data classification requirements (private, public, and sensitive data).
• Organizations that build and formalize data governance responsibilities into daily routine and methodology quickly view processes associated with data governance as non-threatening and habitual rather than over and above the existing work effort.
• Organizations that build, communicate effectively, and enforce stricter data management policies assure themselves of lower levels of enterprise risk when it comes to data management and data-compliance assessments.

The Bottom Line

In the spirit of the value statements discussed in this chapter, I share with you a quick bottom-line conclusion to the use of value statements to demonstrate how a Non-Invasive Data Governance program will benefit your organization.

• Organizations that are implementing Non-Invasive Data Governance programs typically look for return on investment and bottom-line impact from several areas: efficiency and effectiveness of data issue resolution, compliance and auditable demonstration, enterprise risk management, management, and employee decision-making empowerment rather than in dollars and cents.

Case Study: Management Gives Go Ahead for Data Governance program

A telecommunications company engaged me to assist in implementing their data governance program in a non-invasive manner. This company had a problem communicating the value of data governance and the impact data governance would have on their ability to effectively retain and add new customers through the data they had about their customers.

This company wanted to show the cause and effect of data governance as an initial step in convincing senior management that a program was necessary. The use of a business value statement was the decided approach.

In a short time and through a facilitated session, the company was able to articulate clearly, using the formula described earlier in this chapter, several causes and effects of data governance specifically focused on their mission.

This company decided that if senior and business management understood data governance better and offered direction to the governance program, the program would have a better chance of success in the long run. Thus, they created a business value statement, similar to the first sample I shared, directed to their organization.

The company recognized the importance of metadata for the implementation of its data governance program and created business value statements similar to the second and third statement I just shared directed to their organization and their ability to record and share effective metadata.

The company adopted a data governance Bill of Rights (See Chapter 12) and got the right people involved in solving the right data issues, at the right time, using the right data. This led to the right solution for the problem or issue. The company developed business value statements incorporating the best ideas from the bulleted statements above directed at the impact these value statements would have on the business of retaining and adding new customers.

Key Points Data governance advocates in the organization must get the business people to speak up about the value they expect to receive from data governance. The two primary components of a business value to share with the business sponsors of data governance for your organization are 1) What business people can’t do because the data don’t support the activity, and 2) The business values that can be expected from putting formal data governance in place. The formula for building a business value statement is: Organizations that do (X, demonstrate business value improvements through (Y).