Transforming data into action:
The business outlook for data governance
New digital technologies such as artificial intelligence, big data and the
Internet of Things are inspiring more business executives globally to
acknowledge the potential strategic value of data. The challenge is converting
raw data, in their ever-increasing quantity, into actionable insights and
deploying them effectively in both internal and external business operations.
Capitalising on data requires more than cutting-edge technologies. Companies
also need a framework for gathering, validating, protecting and disseminating
information. That’s where data governance comes in. Less glamorous than the
futuristic digital capabilities it supports, data governance involves the essential
work of establishing standards and practices for such activities as regulatory
compliance, privacy, data quality and access to information. And it involves more
than raw numbers: analyses, metrics, algorithms and dashboards are all elements
of data governance.
Getting these tasks and outputs right enables employees to harness the data
generated by their businesses and have the best chance of translating such data into
meaningful strategic insights. Good data governance can help companies create a
competitive advantage from their data by revealing untapped market opportunities
and highlighting unnecessary expenses.
“Data governance is a foundational concept for any large organisation like ours,” says
Abhi Seth, senior director of data science and analytics at Honeywell Aerospace, a
Phoenix-based manufacturer with nearly $15bn in annual revenue.
Although many companies have started to develop data governance programmes,
new research from The Economist Intelligence Unit reveals that for most companies
this is an untapped opportunity to advance business strategy. Our survey of 500
senior executives spanning multiple industries in Europe and North America
shows that nearly all business executives consider data essential to meeting their
company’s strategic challenges.
But many survey respondents say their organisation’s approach to data governance
emphasises legal and compliance requirements (55%) or privacy concerns (44%)
rather than strategic objectives. Accordingly, executives spend most of their time
ensuring that their data practices comply with applicable laws and protecting
sensitive information from hackers. They spend less time figuring out how to make
data useful and accessible to marketers, financial forecasters, plant managers,
procurement officers, R&D teams and others who can use this information to
develop new products or services, increase sales, cut costs and improve productivity.
The emphasis on compliance and data security is understandable and crucial,
considering the introduction of new regulations globally and the reputational
and financial damage caused by widely publicised data breaches and lapses in
data management at major corporations such as Target, Equifax and Facebook.
And this focus is delivering many hoped-for improvements—about two-thirds of
respondents say data security or data quality is getting better at their companies.