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6 Game-Changing Business Benefits of Data Governance

The benefits of data governance are wide-ranging. A  2021 Gartner survey found that while 61% of companies wanted to optimize their data for better productivity, less than half felt they were progressing.

The reason? The lack of an effective data governance strategy.

Solid data governance benefits the entire organization in numerous ways – from finance and operations to customer service, employee experience and data literacy, compliance, risk management, and overall strategy.

1. Financial Benefits

Let’s start with the financial benefits of data governance.

Good data quality leads to accurate financial reporting and decision-making, reducing expensive errors and ensuring reliable plans and forecasts.

We’ve all heard horror stories of companies making massive accounting blunders due to faulty data – like overstating revenues, missing major expenses, or using flawed forecasting models based on wrong assumptions.

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With better data governance and quality controls, these costly mistakes get caught before they cause major damage.

Plus, streamlining data management cuts down on redundant storage and maintenance costs that often fly under the radar – those duplicate data silos across departments can really add up over time. With a better data governance solution, you can identify and eliminate that wasteful redundancy.

Having a solid handle on data governance helps avoid costly penalties for failing to comply with required regulations and data laws. Just look at the multi-billion-dollar fines issued for major data breaches and privacy violations in recent years, such as the $5 billion penalty against Facebook for privacy violations, or the $700 million penalty Equifax paid for their 2017 data breach.

2. Operational Payoffs

Standardizing data processes and definitions across teams drives efficiency by reducing duplicate work and ensuring everyone’s on the same page. It’s huge for complex operations like clinical trials in the healthcare industry with countless critical data points around patient details, trial protocols, outcome measures, and more.

Uniform data definitions and processes are vital for smooth operations and reliable interpretations of results. Consistent, high-quality data also unlocks reliable business intelligence and analytics for optimizing processes and performance.

With trustworthy data, you can implement smart operational strategies like dynamic pricing models based on real-time demand forecasting, supply chain optimization through accurate inventory tracking, and other data-driven improvements.

And clear data ownership with established responsibilities avoids organizational silos, promoting seamless cross-functional collaboration, data literacy, and data sharing.

3. Customer Experience Improvements

Accurate, consistently managed customer data lets you fully understand your customers’ needs, preferences, and behaviors to personalize marketing and service offerings.

For example, with a consolidated 360-degree customer view, businesses can provide highly relevant product recommendations tailored to each individual’s purchase history and interests.

A complete, unified customer profile also enables consistently delightful experiences across all channels and touchpoints – no more fragmented or conflicting customer journeys. Plus, prioritizing data privacy and security builds valuable customer trust that you can’t buy through marketing alone.

Just look at the backlash and defections companies face over high-profile incidents of mishandling personal data – having robust data governance policies and technical controls to safeguard privacy is critical in today’s climate.

4. Better Data Literacy

With well-defined data policies, procedures, and training programs, employees know exactly how to handle and work with data properly, minimizing errors or mishandling of sensitive information. In other words, data literacy is improved.

Clear protocols around data access, usage, security controls, and incident reporting give employees the guidance they need. Good data governance also fosters a data-driven organizational culture where employees feel empowered to make smart, data-backed decisions using reliable data sources they can access and leverage as needed.

It’s about ensuring they have the tools, training, and trusted data to fully leverage the company’s data assets.

5. Compliance and Risk Reduction

From a compliance perspective, effective data governance ensures adhering to major data laws and regulations like GDPR, HIPAA, and PCI DSS, avoiding nightmare penalties that can reach tens or even hundreds of millions of dollars for serious violations. It’s about implementing the correct technical safeguards, security controls, and defined processes.

Better governance also identifies and mitigates potential data risks – from unauthorized access and data breaches to other exploitable vulnerabilities. This involves measures like encryption, access controls, monitoring, risk assessments, incident response plans, and breach notification procedures.

Having documented data lineage and audit trails provides transparency to support regulatory reporting requirements and audits. No more spreadsheet nightmares trying to trace data across disparate systems!

With improved lineage, you can easily see the origins and transformations applied to any reported data point for accurate, auditable regulatory submissions.

6. Strategic Advantages

High-quality, well-governed data that has been cleansed, standardized, and integrated is a hugely valuable strategic asset, with better decision-making being one of the key data governance benefits.

It allows data-driven decision-making for strategic planning of new products, services, markets, and initiatives to outmaneuver competitors. Reliable, well-managed data also ensures smart strategic choices that closely align with the company’s overarching business goals and objectives.

For example, supply chain optimization and market expansion strategies can be precisely calibrated using reliable data on inventory levels, supplier performance, geographic sales data, and other key metrics.

An effective data governance strategy treats data as the precious strategic asset it is – aligning data management best practices with business objectives to drive innovation, growth opportunities, and digital transformation initiatives such as implementing new data-driven business models.

The Takeaway

Implementing a comprehensive, well-designed data governance framework provides wide-ranging benefits spanning financials, operations, customer-centricity, employee experience, compliance, risk reduction, and strategic growth.

Organizations that understand the importance and benefits of data governance can enjoy enhanced insights from properly managed data. In today’s intensely data-driven landscape, it’s an essential investment for overall organizational success, fostering a data-savvy culture, and gaining a competitive advantage.

Harness the power of Semarchy Data Platform to implement a comprehensive data governance strategy that drives business value from your data. Book a demo today.

By Steven Lin, Product Marketing Manager at Semarchy.