If you’ve ever been frustrated by the quality of data management and reporting in your organization, you’re far from alone.
More than one-half of respondents to a study by the Institute for Corporate Productivity (i4cp) indicated their organization had “no method of data governance whatsoever.”
The study defined data governance as anything related to the handling of data in an organization, including policies and processes related to data management, data quality, business process management and risk management.
The use of a data council to support data governance was the only method of oversight that had a correlation to improved market performance, found the research. But even among organizations that reported having a formal data governance policy, only 24 per cent of those in the high-performance group indicated they used councils.
The findings stem from i4cp research into human capital analytics practices featuring responses from 252 organizations.
The organizations in the high-performance group, however, were three times as likely to have data councils and twice as likely to have data governance offices than their lower-performance counterparts.
The study defines a data council as “a temporary collection of individuals who have various roles within an organization that come together on occasion to make decisions regarding company data.”
A council is distinguished from a data governance office, which is a permanent structure, and a “possibly unnecessary function in smaller companies,” notes i4cp.
It adds that while data councils require some effort to set up, they provide “the dual benefits of generating standardized rules and definitions and creating a group of people who can effectively communicate the reasons for those rules across the organization.”
Although it takes work to effectively address data governance, the consequences of not tackling the issue can be significant.
As i4cp observes: “Creating a data governance program is relatively straightforward and the consequences of not doing so are far-reaching.
The hazard exists not only for possible security breaches but also for the flawed decisions that rise from data-less (or bad-data driven) decisions.”
While the low-performance organizations in the study focused primarily on privacy, compliance and data security, the high-performance group focused on these considerations — and a whole lot more, indicates the i4cp research.
In particular, the high-performance sample put a much higher focus on considerations such as:
• policies, standards, and strategy
• data warehousing and business intelligence
• architecture and data integration
• data quality
• management alignment.
The high-performance organizations “set a secure foundation” by normalizing procedures and policies and focusing on integration and data quality, notes i4cp. That “solid framework” allows these organizations to “put faith in the data” and to use it to create aligned and collaborative management decisions.
The report lays out worthwhile recommendations that are salient to any organization grappling with data governance issues:
• Implement a governance structure for human capital data to ensure better decisions are being made from cleaner, more reliable data sets.
• Use data governance to make better decisions, not just for protection and compliance.
• Create clear rules for employee data access; employee data should be accessible only on a need-to-know basis.
• Designate a specific role or team to be tasked with controlling and monitoring human capital data, as well as to guard against breaches of security.
Ultimately, the quality of an organization’s decisions is tied to the quality of the data used to support those decisions. It’s hard to get a clear picture of the current state — or to make meaningful projections about the future state — when you’re working with data that is inaccurate, incomplete or difficult to aggregate.
Data governance isn’t an easy thing to get one’s arms around. But a collaborative approach that emphasizes the strategic imperative of such an undertaking can pave the way for better data management — and better decision-making.
Claudine Kapel is principal of Kapel and Associates, a human resources consulting firm specializing in compensation design, performance management, and employee communications. Claudine is also the co-author of The HR Manager’s Guide to Total Rewards and Straight Talk on Managing Human Resources. For ordering information, visit www.carswell.com.
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