Why data governance is a strategic success factor

The realization that high (master) data quality is an elementary prerequisite for business success has meanwhile become established in almost all companies. Data governance makes an important contribution to high-quality data. Nevertheless, only 5% of companies have fully established data governance. In contrast, 71% report that they have at least partial data governance structures in place, while just under a quarter of companies still have no data governance at all. These are the findings of a survey by IBsolution, which examines the importance companies attach to data governance in the current volatile times.

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Structural framework for data management

The term data governance refers to a discipline of data management that deals with the administration, access and authorizations for companies’ data assets. It is therefore not only a technological issue, but above all an organizational one. The right software tool is certainly relevant for creating, maintaining and managing master data and making it available to the connected target systems. However, functioning (master) data management also requires, above all, a suitable organization as well as the implementation of guidelines, procedures and structures. Only when data governance forms a stable structural framework are companies able to maximize the quality and value of their data assets, increase their revenue and reduce their costs at the same time.

Change management as an important element

43% of the companies surveyed state that they have carried out a data governance project as a stand-alone project in the recent past. For 24%, the establishment or expansion of data governance took place as part of a larger project, for example as part of the SAP S/4HANA implementation. In terms of the added value of such a project, the most frequently cited is meeting regulatory requirements, followed by ensuring consistent, disciplined and effective data management and maintenance. Defined and documented responsibilities rank third.

The biggest hurdles in a data governance project are the accompanying change management (52%), the lack of commitment from management (43%) and an unclear scope (29%). Change management in particular is indispensable at both the operational and strategic levels and plays a decisive role in the introduction or expansion of data governance.

Higher data quality, optimized processes

The key benefits that data governance brings include improved data quality, process optimization and higher levels of automation. In addition, strengthening resilience, cost savings, defining clear roles and responsibilities, and greater transparency in data management play a role as motives when companies look at data governance.

Conclusion: Relevant for every company

The importance of data governance has increased immensely in recent years and will continue to do so in the future. This is because functioning data governance is essential for companies to achieve competitive advantages in a constantly changing market environment and to be successful in the long term. One important finding of the study is that industry or company size do not matter – data governance can become a strategic success factor for any company.