Despite ongoing concerns about the global economy, a growing number of businesses are realizing that data governance programs are a wise investment, according to Sunil Soares, the director of information governance with IBM’s software group. But that doesn't mean getting funding for data governance initiatives will be easy in 2012.
Budgets are still tight, says Soares, and anyone looking to move ahead with a data governance initiative will need to build a solid, industry-centric business case that clearly quantifies the expected return on investment (ROI).
SearchDataManagement.com recently got on the phone with Soares to find out how organizations in different industries should go about making the case for data governance and why it’s important to be creative when doing so. Soares also talked about the latest trends shaping the world of information management. Here are some excerpts from that conversation:
A recent SearchDataManagement.com member survey found that an increasing number of organizations are enacting data governance programs. Do you agree that the level of data governance awareness is growing?
Sunil Soares: If you talk to IT practitioners they will say that they’ve been doing data governance forever. The key difference now is that the business is seeing the value of information governance and the business is taking ownership of the data. This discipline of information or data governance is about aligning business and IT to set information policy. That [process] has to be very specific to industry and it’s got to be specific to job functions. How you do information governance relative to risk in a bank is completely different than it is for a merchandiser or a retailer or a manufacturer.
What industry trends should business and IT workers think about as they get ready to make the business case for data governance programs in 2012?
Soares: One thing we’re starting to see is a need for convergence between ‘big data’ and information governance. I’m calling it big data governance. As an example – and I love this example – think about oil and gas companies. For them, seismic data is critical. They were buying seismic data from third parties. That is big data because there is a lot of it, it comes in fast and it’s unstructured. But [the two sides] were using inconsistent nomenclature and calling the same piece of seismic data something different. As a result, [oil and gas companies] actually went and spent money on the same data twice. If they had good stewardship around what we call metadata – data about data – then they would have a higher probability that they wouldn’t be calling the same thing something inconsistent.
You have stated that it’s important for organizations to focus on critical data elements when building a business case for data governance programs in the coming year. Could you expand on that?
Soares: I was talking to a large manufacturer about how they govern customer data. They explained that [workers there] have to go to their vice president of sales and convince him why he needs to assign a data steward to improve the quality of the customer data. Then we asked them to explain the critical aspects of customer data and we spoke about shipping addresses, or ship-to addresses and they said that is important. Well, if 5% of the ship-to addresses are inaccurate, that means that you’ve got equipment bouncing around before it gets to the right customer. That’s a customer satisfaction issue.
But isn’t it difficult to quantify the value of a customer satisfaction issue to a vice president of sales?
Soares: If you improve the quality of shipping addresses, what happens is that the equipment gets installed faster and so you’ve probably got 3-4 weeks of aftermarket consumables that you’re able to sell. So, if you’ve got 100,000 customers and you improve billing addresses by 10% or 10,000 customers, you can start to establish an ROI for information governance. What I always tell clients is that you can manage as many attributes as you want, but when you’re governing you should govern a subset of critical data elements. In that example, the shipping address is the critical data element that you want to govern.
Why do you think it’s important to adopt an industry-oriented approach when building the business case for data governance?
Soares: Historically, information governance has been about horizontal disciplines such as data quality, metadata management, master data management (MDM), information lifecycle management and security and privacy. What we believe is important is that you want to define a business problem you are trying to solve and then find out who the executive sponsor for the business problem is so that governance can help. Think about risk management in a bank, for example. Clearly, the chief risk officer would be the sponsor for risk management and would be the sponsor for good data governance.
Is the bottom line that organizations need to be creative when presenting the business case for data governance programs in 2012?
Soares: Start with the problem that you’re trying to solve and ideally think about your critical data elements and the executive sponsor and then work back from that. In the example I gave earlier, it’s shipping address and the sponsor is the VP of sales. But what we find is that you’ve got to be creative in terms of thinking through some of the business benefits. You have to spend a little bit of time interviewing your key stakeholders in the business to really get to some of the underlying business benefits.