Data Governance in the 21st-Century Organization

In one of our recent research projects, a respondent told our team that “data is the food of AI. It’s what AI grows on.” This simple but powerful metaphor illustrates that generating value with data is not about having lots of data on hand; it is about using the right data (at the right time, one might argue), which explains why many organizations are still struggling to become data-driven.

At the same time, data breaches that we too frequently hear about underline the reality that having data is not without risk for organizations — as illustrated by a quick glance at GDPR rulings.1 To paraphrase the Spider-Man comics, with great data comes great responsibility. So how do organizations generate value by leveraging data while avoiding the issues that stem from generating, collecting, and processing data? To shed light on this pressing question, it’s important to discuss the relevance of data governance in data-driven organizations.

Governance: Bridging Strategy and Operations

Broadly speaking, data governance builds on the concepts of governance found in other disciplines, such as management, accounting, and IT. Think of it as a set of practices and guidelines that define the loci of accountability and responsibility related to data within the organization. These guidelines support the organization’s business model through generating and consuming data.

A recurring question I hear from executives is whether data governance takes place at the strategic level. Although it’s possible to approach it this way, it is not an ideal pattern, because it fails to translate strategy into concrete practices and guidelines. Where data governance really takes place is between strategy and the daily management of operations. Data governance should be a bridge that translates a strategic vision acknowledging the importance of data for the organization and codifying it into practices and guidelines that support operations, ensuring that products and services are delivered to customers.

By functioning as a bridge within the organizational design, data governance supports the execution of the strategy and enables innovation while providing the necessary safeguards to guarantee the security and confidentiality of information owned and/or processed by the organization.