Seven Steps to Effective Data Governance

A White Paper

Table of Contents
1

Executive Summary

What Is Data Governance?

The Need for Data Governance

Why Enterprises Struggle With Data Governance

Seven Steps of Effective Data Governance: An Overview

Step 1: Prioritize Areas for Business Improvement

Step 2: Maximize Availability of Information Assets

Step 3: Create Roles, Responsibilities, and Rules

Step 4: Improve and Ensure Information Asset Integrity

Step 5: Establish Accountability Infrastructure

Step 6: Convert to a Master Data-Based Culture

10

Step 7: Develop a Feedback Mechanism for Process Improvement

11

Real World Case Study

13 Conclusion

Executive Summary
Data governance is not just about technology. Its about people taking responsibility for the
information assets of their organization by looking at the processes they use to interact with
information as well as how and why its being used.
Creating a framework to ensure the confidentiality, quality, and integrity of data the core
meaning of data governance is essential to meet both internal and external requirements, such
as financial reporting, regulatory compliance, and privacy policies. At its best, data governance
roots out risk both business and compliance risk by increasing oversight. It enables
organizations to integrate and consolidate information from vertical and horizontal lines of the
business into a single source of truth, providing economies of scale and making it possible to
effectively tie information policy to business strategy.
Although the need for data governance has never been greater, initiatives in many organizations
have become bogged down in bureaucracy, and other organizations have not even started
because they have been daunted by what can seem like an overwhelming task. The more data,
applications, and people that are involved, the bigger the challenge and the need.
Taking an incremental approach using a repeatable framework is a practical, proven strategy that
any size organization can implement to suit their immediate and long-term needs and budget.
This white paper provides seven steps for taking such an approach, concluding with a real
world example.

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What Is Data Governance?

Data governance is an umbrella term for an emerging discipline that encompasses a number
of different practices for data quality, data management, business process management, and
risk management. The goal is to ensure that data serves business purposes in a sustainable
way. MDM Institute defines data governance as the formal orchestration of people, processes,
and technology to enable an organization to leverage data as an enterprise asset. The Data
Governance Institute goes a step further, stating that data governance is a system of decision
rights and accountabilities for information-related processes, executed according to agreed-upon
models, which describe who can take what actions with what information, and when, under what
circumstances, using what methods. According to Wikipedia, data governance encompasses
the people, processes, and information technology required to create a consistent and proper
handling of an organizations data across the business enterprise. Goals may be defined at all levels
of the enterprise and doing so may aid in acceptance of processes by those who will use them.
These definitions point to the need for exercising control over how data is used in an enterprise.

The Need for Data Governance

Data governance enables organizations to access the full value of data, the currency of todays
networked economy, while protecting that data from risk. Data is growing across all areas of
the enterprise: on the average, at the rate of 1.5 to 2.5 times a year. Laws regulating the use of
data and associated compliance issues are also growing. For instance, in the U.S., the 2002
Sarbanes-Oxley Act can result in fines and even prison sentences for noncompliance to external
reporting requirements.
Data quality, master data management (MDM), and data migration initiatives are booming as a
result of this growth in data, demand, and regulation. As these data initiatives proliferate, they
need governance to ensure they fit the needs of the enterprise and work with one another. For
example, data across the enterprise needs to be properly defined as customer or product in
ways that suit individual organizations and before more applications and initiatives are created.
Effective data governance creates a framework for the use of data that fits each individual
enterprise. It improves operational efficiency, improves application effectiveness, and minimizes
risk. Not only do the right people get the right information at the right time, but they also get it in
the right way both for their immediate purposes and in a way that works with the data framework
for the whole organization.

Why Enterprises Struggle With Data Governance

It has been reported that by 2008, less than 10 percent of organizations will succeed at their first
attempts at data governance because of cultural barriers and a lack of senior-level sponsorship.
This situation is still true.

Seven Steps to Effective Data Governance

The following are the most common barriers to success for data governance initiatives:

Organizational Different groups within an organization must communicate and coordinate

well with one another
Data quality, MDM, and data migration integration Applications and data must speak to
one another, and this must be addressed up front and planned for in any integration initiative
Accountability and ownership of data People must be held accountable for information
assets and supported with technology to ensure the integrity of the assets
Cost Data governance initiatives must be implemented in such a way that costs are recouped
and business value is proven

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Seven Steps of Effective Data Governance: An Overview

For most organizations, taking an incremental approach is a practical way to prove business value
and build a sustainable program for data governance, avoiding the pitfalls of both over- and
under-reaching. A repeatable framework for data governance makes it possible to take small,
tactical steps for immediate results and still take a systematic, long-term, strategic approach to
gain economies of scale across the enterprise. We have found that the following seven steps using
a repeatable technological framework ensure effective data governance:
1. Prioritize areas for business improvement
2. Maximize availability of information assets
3. Create roles, responsibilities, and rules
4. Improve and ensure information asset integrity
5. Establish an accountability infrastructure
6. Convert to a master data-based culture
7. Develop a feedback mechanism for process improvement

Step 1: Prioritize Areas for Business Improvement

Although it may seem ideal to tackle all data issues at once, its far more effective to target specific
assets to start. Implementing data governance in a targeted way sets a firm foundation for taking
it across the enterprise. For starters, it helps to avoid one of the biggest historical problems
with data governance: lack of follow-through. By targeting an area of the organization, such as
marketing, one can work with the underlying organizational structure to take action and ensure
accountability. Information objectives are clearly aligned with business strategy. The information
architecture is clarified by taking inventory of the data assets how they are managed and used as
well as how they support the existing application architecture and by evaluating and removing
obstacles. Diverse stakeholders reach consensus and coordinate with one another. They determine
key data entities and critical data elements and develop information policies. This is far easier to
accomplish when targeting specific areas.
Consider, for example, the possibilities for data governance in customer relationship management
(CRM) initiatives. It can greatly improve call center effectiveness and reduce frustration due to lost
or duplicate information, multiple mailings, or delivery to wrong addresses. In sales and marketing,
data governance can improve sales by solving issues with multiple, inconsistent product catalogs
and inaccurate customer demographics. In risk management, it can improve auditing and
reporting, solve privacy concerns, and prevent fraud. In finance and accounting, it can ensure
accurate, consistent billing and provide a consistent credit picture (see Figure 1). These are just a
few examples where success in one area will lead to success in others, and the organization can
reap immediate measurable benefits.
The first step is to objectively assess where business improvement can bring the most benefit to
the organization immediately, and establish a beachhead there. Its critical that this assessment
is objective, using an outside point of view. Work with an organization that has helped others
successfully implement data governance. One that looks across the organizational silos, has a

Seven Steps to Effective Data Governance

methodology for assessing data governance across the enterprise, and knows the key questions to
ask to assess where to begin a data governance initiative. It should also understand the best data
governance models, data governance and data quality processes, and ongoing organizational
processes.

Multiple mailings
(catalogs, statements, etc.)
Delivery to wrong address

Sales and
Marketing

Multiple inconsistent
product catalogs
Inaccurate customer
demographics

Business
Initiatives
and
Requirements

Risk
Management

Finance and
Accounting

Auditing and reporting

Privacy concerns
Fraud prevention

Customer (citizen,
patient, partner)
Relationship
Management

Call center frustration

(lost or duplicate
information)

Information Management

Inconsistent billing
(duplicates, multiple
systems)
Inconsistent credit
picture

Figure 1: Examples of areas to target for data governance initiatives.

Step 2: Maximize Availability of Information Assets

To govern data assets, they first have to be available and accessible. Data needs to be looked at
holistically throughout the organization. If data is not available, it will hamper the organizations
ability to make the most of all the data.
Information assets come in all shapes and sizes: in EDI transactions, data warehouses, CRM and
ERP applications, legacy file structures, partner systems, and other outside systems. Sometimes it
needs to be accessed in bulk, real time, or near real time. For example, it may be critical in some
instances to know when the phone number of an important customer changes in real time to
maintain continuous contact. On the other hand, in analyzing a months transactions for the
same customer, one may want to move that data in bulk to a data mart for analysis. Organizations
commonly struggle trying to reach data found in such a large heterogeneous environment mixed
with legacy, cloud, and a multitude of other assets (see Figure 2).

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The use of prepackaged integration components (adapters) simplifies this complex problem and
allows organizations to address other aspects of data. As the market leader for adapters, with
more than 300 available and the ability to quickly build any we do not already have, iWay Software
has helped many organizations cost-effectively reach previously inaccessible data.
The technology you use to access data should enable that access, not restrict access to what
the technology knows. You should also be able to access that information in ways that are
comfortable to you, not based on what the technology supports. Look for technology that
supports the way you work.

Figure 2: Maximize availability of information assets with an industry-standard and open integration
architecture.

Seven Steps to Effective Data Governance

iWay Data Quality Cycle

KPI Denition
Monitoring/Stewardship
SLA Management

Data
Enhancement

Understanding
Data

Data
Cleansing

Business User

IT Professional
Standardization
De-Duplication
Plan Development

Monitoring
and Reporting

Business User

Proling
Data-Impact Analysis
Causes Analysis

IT Professional
Data Plans
Content Analysis
Content-Based Cleansing

Figure 3: Roles, responsibilities, and rules for users working with information.

Step 3: Create Roles, Responsibilities, and Rules

Once the information is accessible, the organization must determine who does what with it,
creating roles, responsibilities, and rules for the processes people use in working with information.
The first step is to gain an understanding of the data itself. The best place to start is with business
users. Because they understand the business, we work with them using data profiling exercises
to identify data elements that are incorrect or inconsistent. Business people can also analyze the
impact of bad data on their organization and provide suggestions, or rules, as to what the data
should look like.
These rules are then passed to IT professionals so that they can apply technology to cleanse the
data based on the business professionals suggestions. IT professionals create the quality plans and
the content- (or rule-) based cleansing to improve data integrity.
IT professionals then enhance the data by applying data standardization rules, de-duplicate the
data where necessary, and enrich it with any additional information before it goes to the sourcing
or targeted system. While business professionals constantly monitor and report the results of the
various applications of rules and patterns, the roles, responsibilities, and rules are
fully implemented.
This kind of cooperation between business and IT is critical. Without it, no matter the technology
or how much money one spends, any data governance initiative will abjectly fail. Everyone in the
organization is responsible to make sure the information assets are at their highest integrity. A data
governance framework must support the needs of all participants, and all participants must work
together to ensure the integrity of the data (see Figure 3).

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Step 4: Improve and Ensure Information Asset Integrity

Once the roles, responsibilities, and rules are established, make the information work for you by
continuously improving and ensuring the integrity of information assets in a four-step process:
data profiling, parsing and standardization, data enrichment, and data monitoring.

Data profiling tools analyze data sets against business-defined quality metrics that define
good and bad data. Creating data profiles is not a one-time, beginning-of-the-process
event. It is ongoing. To analyze quality trends, profiles must be compared continuously against
previously profiled data
Parsing and standardization is a process that validates and corrects both industry-standard
and organizational-standard attributes within the data, such as name formats, titles, case
standardization, and address validation
Data enrichment allows you to create scoring and profiling results for the information and
implement business rules for scoring and profiling. It also gives you the ability to add additional
data, like geo-code information, to data that already exists
Monitoring the data over time is crucial. Although data integrity will improve with these
processes, organizations need a way to easily prove it and monitor the quality of information
assets. Profiling data over time makes it possible to perform trend analyses and identify areas for
constant improvement. It also shows where information quality suffers, so corrective processes
can be implemented sooner rather than later

The ability to implement this four-step process in real time, with data from any system, is key for
ensuring data integrity.

Step 5: Establish Accountability Infrastructure

Even with all of the processes in place to ensure information integrity, lingering questions will
remain: What happens if the information is still inaccurate? What happens to those data elements
that fall through the cracks of the automated processes? What if I want to make sure the changes
are right before they are applied?
Processes alone do not ensure the integrity of information. People do. Establish an accountability
infrastructure that holds people accountable for information assets, and provide them with the
technology they need to ensure the integrity of the assets remains high.
For example, iWay Softwares Data Quality Portal enables business professionals to determine the
integrity of information (see Figure 4). The technology is tightly integrated with the data quality
tools themselves, providing a seamless method of assuring integrity. In addition, information issue
workflows can be created and customized for each organization so that information owners can
take full responsibility for the state of their information assets.

Seven Steps to Effective Data Governance

Figure 4: Establish accountability infrastructure.

Step 6: Convert to a Master Data-Based Culture

With the people, processes, and technology in place to ensure data integrity, the next step to true
data governance is to change the culture of the organization to be master data-based rather than
transaction data-based. In a master data-based culture, a discussion about a particular invoice
elevates to a discussion about the customer. Most organizations today are truly transaction databased in their perspectives, and it keeps them from leveraging the maximum potential of their
data to support the business.
Master data is comprised of the essential facts that define a business and without which the
business would not exist. These facts describe core business entities: customers, suppliers,
partners, products, materials, bill of materials, chart of accounts, location, and employees. It is the
high value information an organization uses repeatedly across many business processes. Master
data exists everywhere in an organization in different applications, systems, transactions, data
warehouses, and messages. Because of the processes youve already put in place, you know and
trust the information.
Master data management decouples master data from individual source applications and ensures
consistent master information across transactional and analytical systems. As a result, applications
go to one place for consistent information about important data, and it is easy to identify
those core assets, keeping them linked and synchronized. Everyone sees the same information,
providing one version of the truth.

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An MDM program potentially encompasses the management of customer, product, asset,

supplier, and financial master data. MDM solutions are software products that support the global
identification, linking, and synchronization of information across heterogeneous data sources;
create and manage a central repository or a database-based system of record; and enable the
delivery of a single view for all stakeholders. iWay Software has helped many organizations
convert to a master data-based culture by using our master data management methodology in
conjunction with our software for managing master data.

Step 7: Develop a Feedback Mechanism for Process Improvement

Following these steps puts the processes, people, and technology in place to maximize data
availability, improve data integrity, and assign accountabilities for information assets. You will
begin to see the important, or master, information in your organization more clearly and drive
your business to those assets. However, the process is a cycle, and there is always room for
improvement (see Figure 5).
There must be a feedback mechanism built into the process that allows for continual process
improvement. Monitoring information assets over time gives a clear picture of how initiatives are
performing and provides a way to graphically depict both successes and failures in the process.
With the processes already in place, correcting failures can be accomplished very quickly. Our
real-time monitoring tools are easy to use, highly graphical, and very effective for facilitating this
feedback cycle in the organization.
The success of data governance ultimately depends on people. When people know their roles,
responsibilities, and the rules; focus on master data; and are supported by technology that makes
it easy for them to do their jobs, data governance works.

Figure 5: Develop a feedback mechanism for process improvement.

10

Seven Steps to Effective Data Governance

Real World Case Study

A major metropolitan hospital followed the seven steps and very quickly and cost-effectively
achieved demonstrable success addressing the data issues in their patient systems.
Located in New York City and encompassing one of the nations largest and most-respected
medical schools, the hospital is a large, complex medical institution that grows by acquisition.
Last year, it treated nearly 60,000 inpatients and approximately 530,000 outpatients. However, the
acquisition process caused challenges in the data quality of patient records. Patient records were
created, updated, and exchanged across a host of systems, which caused about 20 percent of the
patient data to be incorrect.
The hospital undertook a new data governance initiative to ensure that appropriate information
for guiding medical decisions was available at the time and place of care. Its goal was to improve
the quality of healthcare, reduce medical errors, and advance the delivery of appropriate,
evidence-based medical care. It also needed to reduce healthcare costs resulting from inefficiency,
medical errors, inappropriate care, and incomplete information. By addressing these challenges,
they sought to promote a more effective marketplace, greater competition, and a wider availability
of accurate information on healthcare costs, quality, and outcomes.
The hospital consulted with iWay Software to determine where to start for an incremental
approach to data governance. iWay proposed a targeted two-part implementation process.
The first phase was a conversion of their KEANE patient management system, which contained
400,000 records. After a standardization and cleansing process, along with matching and merging
of patient records, 10 percent of the data was pinpointed for investigation and pushed to iWays
Data Quality Portal. The issues were resolved by following the workflow process illustrated in
Figure 6.

Data Governance Workflow

Resolve
Assign to me

Approved

Closed

Resolved/
For Review

In Progress
(or Assigned)

Automatically
update the DB

Approve

Assign to...

For Resolution

Return

Reject

Reject

Reject

Figure 6: Data governance workflow process for issue resolution in the Data Quality Portal.

11

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The first phase of the data governance initiative was budgeted to take 18 months. It actually took
three months with iWays Data Quality Portal.
The second phase is the conversion of their CERNER patient management system, which
contained 2.5 million records. The processes of standardizing and cleansing the data and
matching, merging, and linking records led to 20 to 40 percent of the data being targeted for
investigation and pushed to iWays Data Quality Portal.
These steps have already improved the coordination of care, and patients information is secure.
With the continuous monitoring of data quality initiated, the hospital can now move to working
with master data.

12

Seven Steps to Effective Data Governance

Conclusion
Data governance is critical in todays business environment. Internal and external demands to
manage risk make it imperative to have a single version of the truth, yet the proliferation of data,
applications, and technology makes it harder to achieve. Data governance gives you the power
to unite business objectives, technology initiatives, and information policy. It makes sure that all
stakeholders see one version of the truth, and ensures that version is actually true.
Although the task can seem daunting and expensive, it doesnt have to be. Throughout this paper,
we have shown a practical, cost-effective approach that has been used by leading organizations
for immediate, measurable improvements.
For similar results, follow these seven steps:
1. Prioritize areas for business improvement
2. Maximize availability of information assets
3. Create roles, responsibilities, and rules
4. Improve and ensure information asset integrity
5. Establish an accountability infrastructure
6. Convert to a master data-based culture
7. Develop a feedback mechanism for process improvement
To get started, work with experts in data governance who have led others to success, and look for
technology that supports these functions, enables access to data, and works with people to make
the process easier.

13

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