In its most basic form a business glossary is a set of definitions for commonly used business terms, aggregations, etc
Many organisations may start with a spreadsheet of terms. However, over time, the need to provide context to the business glossary will in most cases require the implementation of a tool, like Collibra’s Data Governance Centre, that can add a governance layer, manage the definition life cycle, and manage relationships between business terms and other business and technical assets – e.g. where the term is used in reports, or how the term is represented in systems.
Implementing a business glossary carries a cost – even if you do it in a minute!
In a shrinking economy, why spend money on a business glossary?
To support decision makers to make the data driven decisions
How many of us have been in scenarios where different reporting lines draw differing conclusions based on their reporting – not because they disagree but because the reports present vastly different pictures of reality, as illustrated in this short (and funny) video
In practice, this kind of problem is far more likely to be based on a an inconsistent use of terminology than on underlying data. If terms used for key metrics – like customer or sales, or for key calculations like churn, new business or total lifetime value then reports drawn using these differing definitions can show wild variances.
Even worse. Maybe you only have one report but the person making the decision has a different understanding of what is being represented than that that is actually shown.
With a business glossary every individual has the same understanding – both when designing, developing and reading a report.
This in turn builds trust, which helps to ensure data driven decision making
Reduced operational complexity and confusion
Misunderstandings between managers and staff, or across business units, are a substantial time sink.
According to an Accenture survey of over 1000 middle managers:
- More than 25% of their time is spent searching for information needed to do their jobs
- More than 50% of the information gathered has no relevance to their original search request
- 40% admit to using wrong information at least once a week
- Nearly 40% complained of being overwhelmed with information – finding it difficult to find the right information amongst the clutter
The costs of searching for relevant information run into tens of thousands per manager per month – without drawing any conclusion related to opportunity costs of these delays, or the impact of using wrong information when this happens.
A business glossary helps knowledge workers to find the right information quickl.
Reduce IT costs and risk
For nearly 25 years, the annual Standish Chaos report has tracked IT project failures – with alarmingly consistent results,
In spite of changes to methodologies (e.g. agile) and approaches far too many IT project fail to deliver on time, on budget, or at all.
There are many reason for this, but it is clear that poorly defined and ambiguous business requirements are a contributor. For example, when building a single view of the customer what is meant by the terms “single view” and “customer”. If business and IT stakeholders have different understandings of what these terms mean it is unlikely that anything built by IT will actually deliver to business expectations.
A business glossary helps to ensure that business requirements are based on a common understanding.
In MDM needs data governance (and here’s why) Lowell Fryman talks about the delivery of a business glossary to support a master data management implementation – “My first business glossary implementation was in support of an MDM “offensive” revenue generating business case. These use cases may include clarifying and consolidating the customer base, identifying customer touch points and customer interactions. Often this includes defining what each business unit considers to be a customer or prospect yet the objective is to identify, define and implement the data, people and processes that can generate additional revenue. “
And when implemented in an enterprise tool the
The post can be applied more broadly to any system or project. not just MDM.
Ensuring a common understanding of business policies and rules
Disagreements over business policies and rules expose the business to substantial risk.
For example, under what conditions will commission to be paid following a sale? Under which conditions will we provide credit ? How do we identify whether a potential client could lead us to contravene regulations such as Anti-Money laundering (AML) and what is our policy if he is found to have done so?
Conflicts between policies create opportunities for staff, clients and suppliers to exploit loop holes – for example by signing up high risk clients or deals in order to earn commissions or bonuses without considering or managing the risk to the business.
In some cases, this may be done willfully as appears to have been the case with Steinhoff.
The Business Glossary ensures that rules and policies are clearly defined and communicated to all stakeholders , and that potential ambiguities and conflicts can be highlighted and addressed
Good definitions are valuable assets
A business glossary can add substantial value to the business, but only if it is driven and “owned” by business.
With business oversight and engagement the business glossary allows us to assess situations better, have more meaningful conversations and make better decisions.
In contrast, imprecise definitions make it difficult to even agree what we are talking about.
Is your business taking the glossary seriously?
