Data Governance: Another Hidden Compliance Opportunity?
I previously wrote about how regulatory compliance could be used as an opportunity to build the foundations for a flexible data environment. This opened up a few conversations with some colleagues, which makes me think that I actually missed a key point in my previous blog: Why is it that compliance is so hard? After all, regulators are simply asking for data about everyday business activities. Surely you just reach into your body of knowledge, draw out the salient facts and provide them in a specified format?
But it’s not as easy as a couple of queries. The reality is that the body of knowledge in question is seldom in a shape recognizable as a ‘body’. In most corporations, the data regulators are asking for is distributed throughout the organization. Perhaps a ‘Scattering of Knowledge’ is a more appropriate metaphor.
It is time to accept that data distribution is here to stay. The idea of a single ERP has long gone. Hype around Big Data is dying down, and being replaced by a focus on all data as a valuable asset. IT architectures are becoming more complex as additional data storage and data fueled applications are introduced. In fact, the rise of Data Governance’s profile within large organizations is testament to the acceptance of data distribution, and the need to manage it. Forrester has just released their first Forrester Wave ™ on data governance. They state it is time to address governance as “Data-driven opportunities for competitive advantage abound. As a consequence, the importance of data governance — and the need for tooling to facilitate data governance —is rising.” (Informatica is recognized as a Leader)
However, Data Governance Programs are not yet as widespread as they should be. Unfortunately it is hard to directly link strong Data Governance to business value. This means trouble getting a senior exec to sponsor the investment and cultural change required for strong governance. Which brings me back to the opportunity within Regulatory Compliance. My thinking goes like this:
- Regulatory compliance is often about gathering and submitting high quality data
- This is hard as the data is distributed, and the quality may be questionable
- Tools are required to gather, cleanse, manage and submit data for compliance
- There is a high overlap of tools & processes for Data Governance and Regulatory Compliance
So – why not use Regulatory Compliance as an opportunity to pilot Data Governance tools, process and practice?
Far too often compliance is a once-off effort with a specific tool. This tool collects data from disparate sources, with unknown data quality. The underlying data processes are not addressed. Strong Governance will have a positive effect on compliance – continually increasing data access and quality, and hence reducing the cost and effort of compliance. Since the cost of non-compliance is often measured in millions, getting exec sponsorship for a compliance-based pilot may be easier than for a broader Data Governance project. Once implemented, lessons learned and benefits realized can be leveraged to expand Data Governance into other areas.
Previously I likened Regulatory Compliance as a Buy One, Get One Free opportunity: Compliance + a free performance boost. If you use your compliance budget to pilot Data Governance – the boost will be larger than simply implementing Data Quality and MDM tools. The business case shouldn’t be too hard to build. Consider that EY’s research shows that companies that successfully use data are already outperforming their peers by as much as 20%.[i]
Data Governance Benefit = (Cost of non-compliance + 20% performance boost) – compliance budget
Yes, the equation can be considered simplistic. But it is compelling.