Data Governance and the Tragedy of the Commons

Cows grazing on CommonsTD Ameritrade Chief Data Officer, Derek Strauss,gave his insights into the role of the Chief Data Officer based on his more than 20 years in data management.

Where data governance is often (wrongly) associated only with a policing function, Derek used an unusual analogy to show why it is much more than that.

Tragedy of the commons

The concept of common land is a feature of many communities – from the historical context of common agricultural ground within a European feudal society,  to shared grazing lands used by African herders, to shared forester y or natural resources. The commons are any communal resource – most typically associated with land.

The use of common, shared resources is dependent on each person supporting the sustainable use of the resource. When on more more individuals abuse the system, the system collapses.

This can be seen in the over fishing of cod stocks in the North Atlantic, the overgrazing of shared lands, or the dumping of trash or building waste in public spaces such as road sides or parks.

In practice, many commons systems function extremely well. In most cases, there is a recognition that there is a shared interest in maintaining a viable resource – be that communal grazing, a shared recreational space or a natural resource such as a fishing ground. Communities develop unwritten laws, or policies, that provide guidelines for the acceptable use of the commons. In some cases, these guidelines may become regulations that may, in turn, be enforced through policing. In many cases, however, commons flourish through the recognition that it is in the interest of the community.

In some cases, however, the use of common ground can result in conflict. Let us assume for example, that common ground is made available for a farming community. Some of the farmers wish to maintain the land as pastures to provide grazing for their cattle and sheep. Others, see the opportunity to cultivate crops. It may be possible for these conflicting priorities to reach some agreement – for example, half of the land may be used for grazing and half may be plowed. In many cases, however, these conflicting priorities will require an independent arbiter to make a final decision that is in the best interests of the community.

In the same way, data is a common resource.

Every business process produces data.

From the first contact with a prospective customer, to the successful sale, to delivery of the product or service, to billing and post-sales support, to supporting processes such as legal or compliance.

Each process may make use of different systems, and engage different individuals with, in some cases, conflicting requirements for information.

Initially, the common interest may help to maintain data standards and quality, and ensure that each process and each individual is adequately supported by the data.

Over time, however, the very complexity and size of modern companies mean that standards and quality begin to fail. In many cases, producers of data are not even aware of the impact they have on downstream consumers.

Research suggests that up to data issues consume up to 12% of many companies revenue – a tragedy of the data commons.

Just as the common land must be managed according to serve the community goals. data must managed to support the business priorities.

Data governance ensures that each individual acts in the best interests of the company goals and values when producing and consuming data

Data governance helps to create a common understanding of the acceptable uses for enterprise data, helps to identify opportunities for rationalization, helps to prioritise data management spend to where it will best support business goals, and identifies data related risks that must be managed before they become issues.

Data governance defines KPIs and accountability to ensure that corporate goals become individual goals and that your enterprise data remains a valuable resource.

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