The Data Management Association (DAMA) International defines data governance as the “planning, oversight, and control over management of data and the use of data and data-related sources”. Given this definition, should you view data governance as a necessary compliance chore on your long to-do list or a strategic investment that can grow your organization’s bottom line? There’s strong evidence to demonstrate how it serves both categories. Return on investment (ROI) is highly variable across organizations depending on their size, industry, and their level of data and data governance maturity. Even so, there are many benefits to support the argument that data governance improves ROI.
Besides stronger regulatory compliance, the benefits that data governance offers include data quality, data monetization, customer experience optimization, and data management efficiency.
Stronger Regulatory Compliance
Data governance helps protect sensitive data from unauthorized access and data breaches. This helps organizations comply with data privacy regulations such as General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA), and Health Insurance Portability and Accountability Act (HIPAA).
Since fines for non-compliance can be expensive, data governance can help organizations save money. For example, since January 28, 2022, GDPR fines reached 1.74 billion (EUR 1.64 billion). This amount is more than double the aggregate value of fines issued in 2021. In addition to fines, legal fees, and reputation damage can be significant.
Improved Data Quality
According to Gartner, poor data quality costs organizations an average of USD $12.9 million each year. Data governance improves data quality by establishing standards, processes, ownership, and accountability mechanisms that promote data accuracy, consistency, and reliability. High-quality data gives you a trusted foundation for decision-making, makes forecasting more accurate, and identifies opportunities to increase revenue and cut costs.
Monetizing data involves turning data assets into revenue streams. Businesses are increasingly fueling growth through data monetization. The Data Monetization Market size is expected to grow from USD 4.19 billion in 2023 to USD 10.41 billion by 2028, at a CAGR of 19.98% during the forecast period (2023-2028). A McKinsey Global survey found that respondents at high-performing companies “are three times more likely than others to say their monetization efforts contribute more than 20 percent to company revenue”.
Data governance supports data monetization in many ways. One of its most important contributions is creating and maintaining a comprehensive catalog or inventory of data assets within an organization. This enables data stakeholders to easily discover and access relevant data to identify and support monetization opportunities. Data governance also defines and documents metadata that makes data more accessible and understandable to potential buyers.
Customer Experience Optimization
Customer experience (CX) is how customers perceive all the interactions they have with a company. This is critical, given that 73% of all customers say that CX is the number one thing they consider when deciding whether to purchase from a company, according to PwC. In fact, Gartner reports that 73% of customers say CX is the number one thing they consider when deciding whether to purchase from a company.
A well-managed data governance program helps ensure timely access to accurate and complete customer data to optimize CX. Data governance helps create a unified and comprehensive view of each customer by consolidating data from different sources and systems. This 360-degree view of the customer allows organizations to better understand their preferences, behaviors, and history. A business can use this knowledge to personalize interactions, ultimately enhancing the customer experience and increasing customer loyalty, which drives growth. Access to accurate and complete customer data helps customer support teams resolve issues more quickly and effectively. This reduces customer frustration and enhances their overall experience.
Data Management Efficiency
Data governance streamlines data-related processes (data quality, data standardization, data catalog, and metadata management, data access control, data lifecycle management, data integration, and more) making them more efficient. This efficiency can lead to cost savings and improved resource allocation, which frees up resources to focus on growth initiatives.
In summary, data governance creates a strong foundation for sustainable growth in a highly competitive data-driven business landscape. Data governance contributes to growth by facilitating compliance, ensuring trusted data for decision-making, enabling data monetization, optimizing the customer experience, and increasing data management efficiency.
The Actian Data Platform includes many capabilities that can assist you in implementing data governance. These include the availability of the same platform on-premises and in the cloud to improve consistency. Robust data profiling and transformation functions make data more consistent. Support for structured and semi-structured data and the ability to maintain metadata and associated linkages to unstructured data stored outside the platform simplify access. Try the Actian Data Platform for 30 days with a free trial.