As organisations rely more on enterprise data to assist decision making, data governance is changing from a statutory need to a mission-critical enabler of business strategy.
However, ensuring enterprise data is accessible, secure, and ethically used throughout every stage of the data lifecycle, from acquisition to distribution, requires more than just the correct enabling technology and documentation; it needs a holistic, adaptive approach to data governance.
What is master data?
Master data is frequently referred to as a “golden record” of information in a data domain that corresponds to the entity that is the subject of the data being mastered. Data domains differ from one industry to another. Employees, locations, and assets are examples of data domains that can be used in master data management initiatives across sectors. Another type of data is reference data, which includes country and state codes, currencies, order status information, and other generic values.
Transactions processed in the various data domains are not included in master data. Rather, it serves as a master collection with dates, names, addresses, customer IDs, item numbers, product specifications, and other information used in transaction processing systems and analytics applications. As a result, well-managed master data is sometimes defined as a single source of truth – or, more accurately, a single version of the truth – regarding an organization’s data, as well as data from external sources obtained into corporate systems to supplement internal data sets.
What is data governance?
Data governance (DG) is the process of managing data availability, accessibility, integrity, and security in corporate systems using internal data standards and policies that also control data usage. Data governance services guarantee that data is consistent and trustworthy, and that it is not misused.
Best Practices for Master Data Governance
- Focus your governance scope
Concentrate on master data entities that are essential to your business operations, such as order to cash, record to report, procure to pay, and employ to retire. Because different systems and regions are likely to utilise a different set of attributes to describe master data entities, aim to identify the minimal set of attributes that must be consistent across systems in order for your business processes to run quickly and effectively. Attempting to manage too many attributes will make it harder to gain consensus among stakeholders and will cause implementation to be delayed.
- Gain top management support for effective data governance.
The DMO should initiate discussions with the C-suite, outlining current data challenges and the role of data governance. Establish a data-governance council within senior management to align governance with business needs. Collaborate to define data domains and appoint business leaders to drive day-to-day governance efforts. Ensure these leaders are equipped with necessary skills and understand their added responsibilities. Obtain top-down buy-in to clarify roles and empower data stewards. Implement metrics to track progress and demonstrate value, such as time spent on data tasks and financial losses due to poor-quality data, ensuring sustained top management attention and support.
- Measure business value
While technical data analytics are useful, the real value of master data management should be demonstrated. This requires the creation of a metrics hierarchy that connects data metrics with process metrics and strategic key performance indicators (KPIs). Accurate inventory data, for example, enhances the accuracy of delivery-date quotes. On-time delivery rates are increased when shipment data is accurate. Invoice delivery time is reduced when billing contact data is precise, and invoice disputes are reduced when tax data is accurate. All of these factors influence days sales outstanding (DSO). Proving the effectiveness and usefulness of master data management will benefit you and your company in the long run.
- Process flow mapping and master data lineage automation
Not only are master data sources expanding at an exponential rate, but so are data integration and movement jobs. Tools that employ AI and metadata can help you scale more efficiently by automating the data lineage mapping process and identifying data movement processes you were previously unaware of. As part of the lineage map, include owners of apps and data stores to promote increased collaboration and productivity in master data stewardship.
- Focus data leadership on the most important data assets
To improve data governance, prioritise data assets both between domains and inside each domain. Instead of using a wide strategy, concentrate on transformational initiatives and regulatory requirements. Create a domain deployment roadmap, beginning with two to three priority domains. Aim for full functionality in each domain within a few months.
Define criticality levels for data components within each domain, with a focus on the top 10 to 20% of critical data. High-priority components, such as the customer’s name or address, need to be tracked clearly across the organisation and must be continuously monitored for quality. Ad hoc monitoring may be required for less commonly used elements.
- Streamline and optimize workflows
Work with stakeholders to understand how they presently maintain master data and how different groups’ operations are linked. Determine how much coordination is required and what tasks should be planned to fit into a highly structured process. Then, to boost productivity and efficiency, search for ways to automate routing, establishing priorities, and warnings. For example, change requests can be routed to the inbox of the data steward responsible for a certain master data domain and prioritised based on service-level agreements (SLAs) for specific business applications. To expedite approvals and enable rollback, preserve a complete audit record of changes for each phase of the workflow.
Finally, data governance is critical in Master Data Management because it ensures correctness, consistency, integrity, security, and promotes improved decision-making. Organisations may maximise the value of their master data, enhance operational excellence, and achieve long-term commercial success by establishing strong data governance practises.