In recent years, businesses have come to see improved data availability as a necessity for enhancing offerings, cutting costs and developing new models of business. For consumer products and services (CPS) companies, connected devices, online retailing and other digital tools are yielding more data than ever. Data and analytics — along with machine learning and artificial intelligence — are now applied to all facets of CPS organizations’ operations: tracking trends, forecasting demand, optimizing pricing and placement, analyzing store and online performance, and much more.
To pursue these possibilities, it’s critical to manage and treat data as an asset. The Data Management Association (DAMA, the premier organization for data management professionals) defines data governance as “the exercise of authority and control (planning, monitoring, and enforcement) over the management of data assets.” Data governance is an ongoing effort, and it must be integrated into every business operation. Where data maintenance may once have been an afterthought, it’s now a requirement for optimizing data value. This blog post provides an overview of data governance as an essential business exercise, presents some strategic opportunities it will enable, and discusses key data governance considerations.
Domains of Opportunity
For CPS businesses, in particular, data governance is impactful for a number of key data domains:
- Consumers want easy access to accurate information about products and services. If consumers encounter product or service information that is incomplete, inaccurate or inconsistent across channels, they may move on to competing offerings whose data provides a more accurate, consistent and vivid picture.
- The business wants immediate access to accurate answers about where a product’s materials came from, how it was made, and what trading partners were involved in its manufacture. These facts help CPS businesses manage risk with reliable information that supports swift action if needed – and, thus, preserves reputations.
- CPS businesses want a more sophisticated and granular understanding of consumer demographics and spending behaviors, including detailed profiles, retail shopping activity and overall spending analysis. This kind of information helps brands promote offerings with specific, personalized merchandising and marketing. On the back end, such data also supports evaluations of marketing campaign effectiveness. Making a brand’s products, services, experiences and content more relevant supports a closer relationship to the consumer and heightens the consumer’s identification with the brand.
Given the level of competition and the margin pressures in this industry, CPS businesses must treat their data like the strategic asset it is or face obsolescence. When managed effectively, the data leads to pivotal insights and better decision-making. CPS companies’ future success will be grounded in deeper engagement with — and understanding of — customers. To realize these benefits, however, an enterprise needs to undertake the hard work of data governance.
Considerations for Data Governance
Data governance encompasses all the business policies, processes and systems that ensure the data’s availability, consistency, definition, integrity and quality. It starts with gaining control over available data to develop cogent information that supports good business decision-making. Rather than a one-time effort, data governance is an ongoing discipline to maintain data integrity and assert control over its ever-changing nature. Organizationally, it can be overseen by a data governance function, which would fulfill the role of getting control over data assets, securing data and leveraging data to improve business decisions and provide insights. Key data governance considerations include:
- The guarantee of where and when various data will be available to business users and systems.
- The guarantee that every data element is written and stored according to the agreed business rules.
- Enterprisewide agreement on what is a customer, a consumer, a product, an order and so on.
- The validity of values found in the data structures.
- Enterprisewide agreement on establishing the data’s fitness for use, including its completeness, accuracy and timeliness.
- Enterprisewide agreement on what is acceptable use for sensitive data.
Unlocking the Opportunity
The smartest CPS organizations are evolving from tactical, transactional use of their data to capitalizing on all the advantages that data governance capabilities bring, such as better forecasting, improved tracking of products, speed of new products to market, superior customer engagement, satisfaction of regulatory compliance obligations and greater confidence for decision-makers. Data governance is a significant organizational effort, but with strong sponsorship and a committed partnership among technologists, business leaders and trusted partners, the hard work will pay off in efficiencies and competitive advantages powered by data-driven insights.
We will continue to provide insights on this topic. Subscribe to this blog to follow areas of interest.
