I am often asked for help in quantifying the value of data governance.

This can be difficult to do!

As the prominence of data as a business enabler becomes more obvious, more businesses are investing in data management – typically advanced analytics capabilities – such as the late drive towards machine learning and artificial intelligence.

For advanced analytics to deliver value knowledge workers must be able to find and understand their data, in order to build trust. Not easy to do in a large modern organisation.

While data stewardship, and enabling technologies such as Precisely Data360 provide the foundation for the delivery of effective analytics, quantifying the value can be challenging. As businesses continue to funnel resources into data governance endeavors, a fundamental query emerges: How can the Return on Investment (ROI) of these initiatives be tangibly gauged? This discourse delves into the strategic metrics that empower stakeholders to quantify the true value underpinning their data governance investments.

Laying the Groundwork for Data Governance ROI Assessment

Before delving into the intricacies of quantification, it is paramount to establish a comprehensive understanding of the essence of data governance. It entails the orchestrated management of data assets, encompassing facets such as data quality, availability, usability, and security. This includes a well-choreographed symphony of processes, policies, and procedures, ensuring that data remains accurate, coherent, and impeccably aligned with the overarching business objectives.

The multi-faceted benefits conferred by effective data governance encompass:

1. Informed Decision-Making: The hallmark of quality data lies in its ability to furnish insights that lay the groundwork for informed decisions driving business expansion.
2. Mitigated Risk Profile: Prudent data governance mechanisms translate to diminished vulnerabilities, be it data breaches, regulatory sanctions, or tarnished reputation.
3. Operational Optimization: Streamlined data processes culminate in optimal resource allocation, obliterating operational bottlenecks.

Shining Light on Metrics that Illuminate Data Governance ROI

According to a recent report from the LeBow College of Business at Drexel University, 57% of companies that have a data governance program in place are seeing improvements in the quality of data analytics and insights, and 60% see improvements in the quality of the data itself. Yet these statistics only scratch the surface.  Every business is unique, so every organization requires a business case that speaks to its own goals and aspirations.

Precisely

Effectively measuring data governance ROI demands a balanced blend of quantitative and qualitative measures. The following metrics shed light on this complex evaluation:

1. Elevating Data Quality: Data governance’s impact on data quality can be gauged through metrics like:
   • Precision of Data: Reduced errors reflect the efficacy of data governance, leading to quicker processing and heightened customer satisfaction.
   • Completeness of Data: Enhanced data completeness improves decision-making and reduces the need for data rectification.
   • Data Integrity: Fewer instances of data duplication result in a single source of authenticity and efficient resource management.
2. Operational Streamlining: Data governance’s effect on operational efficiency is evident in:
   • Data Processing Timelines: Comparing pre and post-governance data processing timelines highlights improved efficiency.
   • Resource Allocation Optimization: Efficient resource allocation stems from reduced data-related impediments.
3. Risk Containment and Regulatory Compliance: Data governance acts as a shield against compliance issues and risks:
   • Fines Averted: Calculating avoided fines demonstrates financial prudence through robust data governance.
   • Breaches Mitigated: Quantifying prevented losses due to enhanced data security offers a tangible risk-averse metric.
4. Empowering Strategic Decisions: Data governance’s role in shaping strategic decisions is highlighted by:
   • Rapid Insight Generation: Faster insight extraction post-governance expedites decision-making.
   • Revenue Enhancement: Scrutinizing how data governance identifies revenue streams enhances financial focus.
5. Enhancing Customer Satisfaction and Retention: Data governance’s impact on customer satisfaction is evident through:
   • Precision in Personalization: Data governance-driven personalized experiences lead to higher satisfaction and loyalty.
   • Tailored Offerings: Data governance supports tailored product and service curation, strengthening customer-centricity.

The Roadmap to Calculating Data Governance ROI

To concretely evaluate data governance ROI, follow the Information Value Management blueprint:

1. Expenditure Breakdown: Itemize data governance-related expenses, including technology, personnel, training, and oversight.
2. Metric Definition: Define metrics for each data governance facet, from data quality to compliance.
3. Baseline and Post-Implementation Analysis: Compare chosen metrics before and after governance implementation.
4. Monetary Assessment: Assign quantifiable values to metric improvements, accounting for cost savings and revenue growth.
5. ROI Calculation: Use the formula [(Net Monetary Gains / Investment Cost) x 100] to derive a tangible ROI percentage.

Building a Data Governance Use Case to Get Budget and Buy-in?
Read the Precisely eBook and learn how you can generate support, secure budget, and gather momentum to build a data governance framework.

Beyond Tangible Returns: Embracing Intangible Gains

While quantifying data governance ROI is vital, intangible benefits are equally essential:

• Cultivating Data Culture: Data governance fosters a culture of stewardship, promoting data accountability and prudence.
• Long-lasting Quality: Effective data governance ensures enduring data quality and integrity, preemptively averting pitfalls.
• Enhancing Reputation: Precise data maintenance enhances trust among stakeholders and customers, elevating organizational standing.

Conclusion: Unveiling Triumph in the Data-Forged Realm

Quantifying data governance ROI is a multifaceted journey across organizational layers. By meticulously evaluating improvements in data quality, operational efficiency, risk mitigation, and financial gains, enterprises etch a tangible story of their data governance investments. Amidst the numerical metrics, embracing a data-driven ethos and acknowledging intangible benefits form the bedrock for sustained success in the data-centric landscape.