Every company must measure and analyze its business performance. With different operating companies, business units, and departments having their priorities, and ways of doing it, the more complex the organization becomes, the greater the problem. Strong enterprise data governance is essential. A company can take help from data governance consultant in this.
Why Data Governance Is So Important?
The data required to calculate profitability and other analytics is often scattered across different applications. This makes things more complicated. Is there only one instance of an ERP system? How about the classification of sales, customer, and product data? Are you able to use one consistent set of data hierarchy classifications? What happens if another company acquires your applications and classification hierarchies, even if you do?
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Most large companies have data silos with inconsistent data that can’t easily be accessed by all users. It takes a lot of effort to coordinate data collection, classification, formatting, and usage across organizational boundaries. Data governance is now a key element of a data management strategy.
Data Governance: How Can It Help Companies?
These are some of the key benefits that a well-designed data governance program can bring to an organization:
1. Greater Efficiency
You can increase operational efficiency by having well-governed data and the ability to perform business analytics with it. The rule of thumb is that 20% to 80% of your revenues come from customers. Knowing which customers will be the most profitable for your business allows you to target your marketing and sales efforts more effectively.
You can identify product profitability and eliminate low-performing products while investing more in those that are promising. If the data behind business processes are reliable, it can be possible to analyze them and find opportunities for improvement.
2. Better Data Quality
Maintaining good data quality is a difficult problem, despite significant IT investments. Data quality problems can have devastating consequences. Data quality improvement efforts are an integral part of data governance programs. Data quality can help reduce operational errors and improve analytics accuracy. There are no quick fixes, but a good place to start is to have a data quality mindset. Also, regularly auditing and measuring data quality levels are part of the governance process.
3. Improved Compliance
Poor regulatory compliance can result in severe penalties in healthcare, financial services, and other industries. Pharmaceutical companies, for example, are required to keep track of their advertising and marketing expenditures by law. Companies could be subject to fines or lawsuits if they fail to implement effective governance and data security and privacy protections.
4. Better Decision-Making
A solid database will help your company make better business decisions. Employees and executives can make better business decisions if they have more information. All of this depends on the availability of accurate data to enable strategic planning, advanced analytics, and business Intelligence.
5. Performance Improvements For Businesses
The benefits mentioned above should ultimately lead to higher revenue and profit. High-performing businesses seem to take data governance much more seriously than other companies. Any corporate initiative should aim to improve business performance. Data governance plays a key role in this.
6. Improved Business Reputation
Effective data governance can make a company more attractive to customers, in addition to providing tangible financial benefits. High-quality data, for example, allows sales representatives and customer service representatives to have better interactions with customers. This should lead to customer satisfaction and loyalty that is higher, which will in turn drive business performance improvement.