Does data make a difference? The true value of data and data governance
Have you been asked to prove the benefit of collecting and collating data and what is the true value of data governance?
Some organisations are exhausted by the consistent demands for data. Your business or board may be starting to wonder how valuable data is and find it difficult to see examples of where data is making a difference. If your organisation has data fatigue, it might be time to reassess how you use data and review your data governance practices.
Why data matters
Data can make a significant difference in your business by providing valuable insights that drive strategic decision-making. When used properly, in can help you better understand your customers, market trends and operational performance. With the right analysis, data empowers you to optimise processes, identify new opportunities and mitigate risks.
Nowadays, data plays a crucial role in enhancing customer experiences. By leveraging customer data, you can personalise marketing efforts, develop targeted advertising campaigns, and tailor products and services to meet specific customer needs. This, in turn, can lead to increased customer satisfaction and loyalty, ultimately contributing to business growth. Data-driven decision-making improves overall efficiency and can give you a competitive edge.
Data also enables you to monitor and evaluate performance across various touchpoints. Through data analytics, you can track key performance indicators, assess the success of marketing initiatives and adjust as needed to achieve better outcomes.
How to put a value on data
For many years, business operators and academics have tried to work out how to put a value on data within an organisation. The true value of data may vary depended on the nature, size and industry of your business. More than 30 years ago, George Labovitz and Yu Sang Chang proposed a value rule for data that can still be used today. They described the impact of data costs:
- $1 to verify or standardise new data at the point of entry
- $10 if you wait to cleanse the data until it has been deposited in your system
- $100 in damage control if data is used without being cleansed
In essence, this model demonstrated how much more it costs to correct flawed data than to check data as it is integrated or imported into your data network. Although these figures still serve to demonstrate the value of accurate data, they do not equate for inflation. These figures have been prepared in terms of human effort and do not take into account the operation of AI, which might perform data cleansing duties.
Regardless, you can see the costly impact of inadequate data within your network. It costs much less to ensure data quality at the beginning of the data chain than it does trying to correct and amend flawed data sets later on.
Using data to make a difference
Leveraging data effectively can lead to improved productivity, innovation and profitability in business operations. Through data-driven decision-making, you can gain a deeper understanding of your operations and market landscape, resulting in more informed strategies and improved outcomes.
Data also facilitates the identification of operational inefficiencies, leading to cost savings and improved resource allocation. In addition, data serves as the foundation for innovation and product development.
By analysing market data and consumer insights, you can identify emerging trends and develop new products and services that are aligned with market demands. This ability to innovate based on data-driven insights can help you stay ahead in today’s competitive landscape.
Dealing with data challenges
The truth is that data governance is hard. Many organisations are fearful of facing the challenges of data governance and prefer to not challenge the status quo of how data is currently handled. The fear of failure shouldn’t be a determent. The ever evolving legislative, ethical and reputational challenges should be identified and addressed head on. Data challenges may include:
- The volume, velocity and variety of data in systems
- The existing level of data quality
- The total number of systems and applications that house data, and concerns about integration capabilities between them
- The confidence, willingness and data literacy of employees
- Data rules, regulations and guidelines
- Budget considerations and limitations
Likewise, data governance adds value in several ways. First, it helps to ensure that the data within an organisation is accurate, consistent, and reliable, which is crucial for making well-informed business decisions. Additionally, data governance can enhance data security and privacy, ensuring compliance with regulations and reducing the risk of data breaches. By establishing clear ownership and accountability for data, it also helps to improve operational efficiency and reduce data management costs.
How to use data governance in your enterprise business
Data needs to be handled and managed within an effective data governance framework. Areas of your business where governance can make a difference to the reliability and usefulness of your data include:
Privacy – One of the key guarantees of data governance is privacy. Ensuring privacy for you customers through good data governance is part of the responsibility of the modern enterprise. Failure to meet privacy guidelines and legislation can cause serious problems for your reputation and brand.
Security – Data security is a separate consideration from data privacy. Privacy relates to the protection of personal information while security ensures that information is preserved and housed in a way that guarantees the integrity of the data. Data security also involves ensuring that records are protected from theft, misuse or unauthorised access.
Availability – While part of data governance involves ensuring privacy and anonymity, conversely, ensuring that data is available is also an important consideration. Data availability means providing access to data to the people who need it. Availability defines the way in which user permissions are set in relation to certain and unique data sets.
Usability – Data governance helps ensure that all the data you have amassed is useful, for what is the point of data that is irrelevant, or can’t be used effectively? Data usability is related to the extent to which a user, or another application or tool, can make sense of data and use it in a meaningful, valuable and worthwhile way. Data usability can be improved by addressing factors such as relevance, quality, structure, metadata
Consistency – A data governance framework can help ensure that you establish consistency in the records contained in your software systems and applications. Consistency is important because it can help assure a degree of data quality. Inconsistency in data records can lead to duplications, error and flaws which impacts how trustworthy and reliable you information truly is.
Compliance – The requirements for compliance that organisations adhere to laws, regulations, and internal policies regarding the collection, storage, and usage of data. By maintaining compliance, businesses can mitigate legal and financial risks, protect sensitive information, and build trust with customers and partners. Non-compliance can lead to penalties, loss of reputation, and potential data breaches, highlighting the significance of upholding data governance standards.
Integrity – Within a data governance framework, integrity is related to, but still separate from usability. Instead of considering data in relation to how humans can handle records and files, integrity instead relates to the completeness, accuracy and overall quality of data records. Establishing processes to avoid loss of data integrity is a unique element of data maintenance and management. Data integrity can be assessed in terms of accuracy, completeness, validity and uniqueness.
Pimcore – your tool for getting value from your data
A comprehensive Product Information Management (PIM) tool like Pimcore can be the missing piece of your data puzzle- giving you a tool for managing and harnessing the value inherent in your valuable data assets. We have helped our customers improve their operations and profitability by getting their data in order with Pimcore. We collaborate with businesses that need to manage a large volume of digital data and products.
Discover how we helped Gerard Industries consolidate multiple website for a unified customer experience, and Waterco to get their products displayed and sold in more than 40 countries.
Related questions
How does Pimcore ensure data integrity and quality?
Pimcore can bring data value by providing a centralised platform for managing various types of digital data, including product information, digital assets, and customer data. Through its integrated data management capabilities, Pimcore allows organisations to organise, enrich and maintain consistent data, leading to improved data quality and accessibility.
This, in turn, enables businesses to make better-informed decisions, enhance customer experiences, and streamline processes across various departments. Additionally, Pimcore's flexibility and scalability empower organisations to adapt to evolving data requirements and leverage data-driven insights to drive business growth and innovation.
What is the value of the golden record in data governance?
The golden record holds immense value in data governance as it represents the single, trusted version of truth for a specific entity, such as a customer, product or asset. By establishing and maintaining a golden record, you can ensure data accuracy, consistency and integrity across systems and departments.
This unified view of critical data entities enables businesses to improve decision-making, enhance operational efficiency, and deliver superior experiences to customers. Operating in the golden record model serves as a foundation for advanced analytics, reporting and compliance efforts, underscoring its significant impact on overall data governance and organisational success.