Digital transformation of business is all about luring the lines between your operational processes and the technology that enables them. In the digitally transformed world, data forms the connective tissue that binds the technology and process components together – enabling operational insights to be harvested, changing the way companies engage with customers and setting the stage for modern technologies like machine learning and artificial intelligence to be introduced, bringing with them a new level of intelligent automation to your operations.
The systems created in digital enterprises (like any other system) are only as strong as their weakest component. With data playing such a pervasive role, the strength, quality and trustworthiness of data is a critical success factor for the business as a whole. So how do we ensure that that data which binds our newly formed digital enterprise together is healthy and will be able to meet our needs? That’s where data governance comes in. For those of you who aren’t familiar with the term, data governance is the set of roles, processes, policies and activities that a company uses to manage their data assets. The purpose of data governance is to ensure integrity & trustworthiness, usability (data fit for purpose), availability and security.
For many years, companies have employed governance processes to manage business processes, operations and company finances – the core building blocks of industrial and information age enterprises. They have recognized that without structure, controls, clearly defined decision authority and effective means of managing change, the assets which once added strategic value will erode and deteriorate. Governance processes are there to both safeguard the value that exists already and enable the necessary changes which need to take place as the company evolves over time.
As companies embark on journeys of digital transformation, they need to look closely at the building blocks that make up the new organization, finding the new sources of value and extending their governance methodologies to ensure that the critical pieces are managed appropriately. As mentioned before, data is one of the most critical areas that needs to be addressed.
My company has been generating data for years and we’ve never needed formal governance processes, why do we need them now? This is an excellent question, and one that can help us understand one of the fundamental changes which occurs during digital transformation. In previous incarnations of your company, business processes, organizational hierarchies and technology domains served as the primary organizing structures that bound the pieces of the business together. Embedded in these structures were the governance activities that controlled people, processes, data and technology components. Your company’s data was being governed through these other structures.
In a digitally transformed business, the hierarchical dependency relationships that used to exist among data, technology and business processes are transformed into a more fluid set of interactions that are both temporary and lacking the hierarchical properties necessary for the old governance structures to be effective. What we see happening is dependencies between technology and processes changing more frequently and data emerging as the persistent asset (the constant) in the new system.
Successful digital transformation of your business requires you to acknowledge the changes taking place and evolving your governance processes to support the new (data centric) business environment. Without effective data governance, your digital transformation will soon erode into chaos. It will be unclear what data assets you have, who controls them, what informational insights they provide and how they should be allowed to change. As the connective tissue of your new organization erodes, so will the value that the transformation created.