Friday, August 27, 2010

Data Governance - IT or not IT, part 1

One of the most difficult questions to answer with regard to Data Governance, after, “What is it?” is, “Where should it exist within the organization?” There are two parts to this question. The first is should it sit in the IT department? If not, in which department should it reside? Second, should it be in its own department? These are two excellent questions. Each organization has to decide for itself. In an upcoming article, I will tackle the questions to ask and how to use the answers to make a decision that works for you.
This article, however, assumes that you have chosen to put the Data Governance Office in the IT department. It also assumes your IT department is a shared service for the entire organization.
Many times, when a company builds a Data Governance Office, it starts in the IT department and, as often as not, it begins its life in the applications practice. This is a natural and understandable starting point. However, when we look at Data Governance and its overall mission, we can see that this is not a good long term strategy.
When you have finished reading the discussion below, ask yourself one question, “Would you include infrastructure or security under applications?” If the answer is, “No,” then I ask you, “Why put Data there?” Ultimately, all three support applications. However, they are all very distinctive perspectives to solving problems for customers.


In 2008, NASCIO, an organization the represents state CIO’s throughout the United States, released a study conducted across the Fortune 500 to uncover the value and importance to the organization of Data Governance. Among the key findings were:
  1. Given the importance of data as the “currency” of the enterprise, it must be treated as a highly valuable Enterprise Asset.
  2. Data must be maintained at some level of quality if it is to be trusted or relied upon for decision making. Again, data must be managed as an Enterprise Asset similar to finance and physical assets. Data Governance provides the means for properly managing this asset.
  3. Information must be integrated across the enterprise.
  4. Decision making relies on Business Intelligence that is derived from Enterprise Data. Data resources must be properly managed within a Data Governance operating discipline to enable effective decision making.
  5. Data Governance allows the organization to act as a single enterprise – enabling faster response to environmental threats and opportunities. The circumstances driving those threats and opportunities must be recognized as interrelated furthering the need for “cross line of business” and “cross enterprise decision making” capabilities founded on accurate, timely, reliable, integrated and available information.
The study further concluded that the most important factor for success was having ownership from the “business side.” Data Governance must be viewed at the Enterprise Level. “Data Governance is a business concern that can be supported by information technology. It must be viewed as an Enterprise Asset Management Program.”

Further support that Data Governance does not belong within an applications practice comes from the following objectives of a typical Data Governance program:
  • Instilling confidence and consistency in our decision making processes
  • Reducing the risk of regulatory fines and impediments
  • Increased security for our data, protecting it from both internal and external threats
  • Maximizing our earning potential by optimally leveraging our data assets
  • Ultimately, creating accountability for the quality of our data

These initiatives ensure the enterprise is as effective as possible. More specifically, they are designed to maximize both revenue generation and recognition. After all, that’s why companies are in business?
In summary, when you listen to those who have conducted extensive research into the objectives and challenges associated with implementing Data Governance, it becomes clear that the scope of Data Governance is not the same as that of an Applications practice – they are related, but they are not the same. Data Governance is about effectively managing the Enterprise Asset we call data. In fact, I suggest you consider creating a practice called, Enterprise Information Management. Within this practice, you could place similar services, such as:
  1. Data Governance
  2. Data Stewardship
  3. Master Data Management
  4. Data Architecture
  5. Business Intelligence
  6. Database Administration
  7. Data Integration
In the end, it all comes down to accountability. If Data Governance is kept within the Applications practice, its overarching mission will be applications-centric and not data-centric. Data is the life blood of applications. However, that data will outlast the applications – requiring distinct management of data and knowledge assets through time as those applications, and even business processes, come and go.
Data becomes information and is transformed into knowledge – eventually being rationalized into the wisdom used to make decisions. Safeguarding the quality of that data needs to be at the same level – at least – as that of the applications that are used to interact with it. Process, Business Intelligence and Data are the key success factors for successfully solving business problems. Applications are designed to support our customers’ ability to interface with our data and business intelligence and to help execute our processes. Data Governance and Applications practices have separate missions. They should be separate organizations.
Now ask yourself the question from the beginning of this article. Would you place your infrastructure and security practices in the same office as your applications team simply because there is a relationship? No, you would not. Data Governance needs to have a face to the business if your business is to have good data upon which you can make trusted decisions and maximize your revenue potential.
In an upcoming article, I will take the next step in this discussion and help walk you through the process of deciding if the Data Governance Office belongs in your IT department or not. Stay tuned.

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