By 2023, the total amount of data created worldwide will eclipse 163 zettabytes.

This data helps businesses understand customer behavior, improve efficiency, create new products and services, and make better decisions.

Virtually all businesses across almost every industry have data. Some use it effectively, while others only see a small fraction of the benefits. It’s estimated that almost 73% of business data goes unused — leaving powerful insights on the table.

To effectively take advantage of all this data and develop robust frameworks for management, businesses need to understand the value of data governance.

Regardless of the level of maturity your business is at, data governance is important. Let’s explore data governance and discover why this aspect of organizational data is so essential to your business operations.

What is Data Governance?

The term data governance defines a set of processes, structures, and policies that help an organization manage data effectively across a business enterprise. 

Data governance encompasses several key areas:

  • Data ownership and stewardship
  • Data quality and accuracy
  • Data security and compliance
  • Data access and sharing
  • Data lineage and history
  • Data archiving and retention

The process of data governance revolves around establishing effective management and accountability efforts to help mitigate the consequences of poor data quality and to ensure data is available and usable across an organization.

But why should Tennessee, Kentucky and Indiana businesses establish robust data governance frameworks?

Why is Data Governance Important for Businesses? 

Data governance is essential for several key reasons.

For businesses interested in data analytics, employing effective data governance structures can help improve overall data efficiency, increase organizational productivity, reduce costs, and help leaders discover valuable data-driven insights.

Let’s explore some other important reasons why data governance is essential to business operations:

  • Regulatory concerns: businesses across the Tennessee, Kentucky and Indiana areas are subject to various data privacy and security regulations. Whether it’s HIPAA regulations or state-specific frameworks like the Indiana Consumer Data Protection Act, data governance helps businesses stay compliant and manage data properly.
  • Customer Trust: customers are becoming increasingly wary of data privacy concerns. Businesses need to employ robust data governance policies to demonstrate they’re committed to protecting users’ personal data. 
  • Data availability: good governance is essential to keeping data accessible and ready for analysis. When not properly managed, data can be difficult to find, access, and utilize, often leading to lost business opportunities and weak decision-making.
  • Consistency: businesses need uniform data that is measured consistently. This makes analysis and comparison easier and can lead to improved business performance.

Gartner’s research predicts that through 2025, 80% of organizations seeking to scale digital business will fail because they don’t take a modern approach to governance.

This puts into focus the importance of data governance efforts toward abiding by regulatory frameworks, building customer trust, and ensuring data is both available and consistent across an organization.

Businesses hyper-focused on digital growth can gain a competitive advantage by having optimized access to data for analysis and other efforts relative to their competitors. 

But what do businesses interested in building robust governance frameworks need to know?

Five Steps to an Effective Data Governance Framework

An effective data governance framework is a critical component of any business’s digital operations. By taking the time to fully understand the points below, your team can develop robust policies around data management that help you reach your business goals and stay safe. 

1. Understand Your Responsibilites

An essential aspect of a proper data governance framework is a firm understanding of a business’s management responsibilities. Organizations will need to become familiar with relevant data protection regulations and understand the potential consequences of non-compliance. 

Moreover, businesses should take time to clearly define roles and responsibilities related to governance across an organization and make sure all relevant stakeholders are briefed on accountability.

2.  Identify Sensitive Data

Not all data is created equal. Businesses need to develop a clear understanding of what data they have, where it’s stored, and how sensitive that data is relative to operations. This process involves classifying data based on its sensitivity and value.

Creating a robust classification process can help data teams manage risk effectively, prioritize security concerns, and stay compliant with data protection laws.

3.  Implement Access Management Policies 

Access control and management are critical to data security efforts. Businesses need to clearly define who has access to what data to ensure employees only work with data that is necessary to accomplish their specific work responsibilities.

This is known as the principle of least privilege, and it helps minimize the risk of internal data breaches. Insider attacks are a serious threat and are the primary cause of around 60% of incidents.

4. Adopt the Right Software

Starting with the right tools can help a business enhance its data governance practices. Data governance software provides tools for data quality management, metadata management, and data lineage tracking.

The right software can automate many aspects of the data governance process and reduce the risk of human error.

5. Get a SOC 2 Audit

A System and Organization Controls (SOC) 2 audit is a certification provided by an independent third-party auditor. This audit attests to an organization’s effectiveness in developing a robust data governance framework.

A SOC 2 audit offers businesses a comprehensive review of their governance practices and can provide customers insight into how seriously an organization takes this mission-critical digital process.

LBMC: Data Advisory and Governance Services for Tennessee, Kentucky & Indiana Businesses

Data governance is essential for businesses looking to leverage the power of data while staying safe and compliant.

Rigorous governance frameworks not only give businesses the tools to access and analyze data effectively, but they also help customers navigate this new era of digital services without sacrificing their privacy.

By following the steps outlined above, businesses can optimize their approach to managing data and deliver key analytical insights that help meet enterprise-wide goals.

Businesses across Tennessee, Kentucky and Indiana can use effective data governance to reduce the time and resources spent on data management, make it easier for employees to access data, and mitigate the risks of financial strains from regulatory non-compliance.

At LBMC, our mission is to help businesses learn to leverage the power of data with our comprehensive data advisory services. Whether your business is in construction or working within government, we can help your team harness data analytics and governance to make better-informed decisions.

To learn more about our services, connect with an advisor today.