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Eiu collibra transforming data into action-the business outlook for data governance

As businesses generate and manage vast amounts of data, companies have more opportunities to gather data, incorporate insights into business strategy and continuously expand access to data across the organisation. Doing so effectively—leveraging data for strategic objectives—is often easier said than done, however. This report, Transforming data into action: the business outlook for data governance, explores the business contributions of data governance at organisations globally and across industries, the challenges faced in creating useful data governance policies and the opportunities to improve such programmes.

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1© The Economist Intelligence Unit Limited 2018
TRANSFORMING DATA INTO ACTION:
THE BUSINESS OUTLOOK FOR DATA GOVERNANCE
TRANSFORMING
DATA INTO ACTION:
THE BUSINESS OUTLOOK
FOR DATA GOVERNANCE
Sponsored by:
2© The Economist Intelligence Unit Limited 2018
TRANSFORMING DATA INTO ACTION:
THE BUSINESS OUTLOOK FOR DATA GOVERNANCE
Contents
About this report
As businesses generate and manage vast amounts of data, companies have
moreopportunitiestogatherdata,incorporateinsightsintobusinessstrategy
and continuously expand access to data across the organisation. Doing so
effectively—leveraging data for strategic objectives—is often easier said
than done, however. This report, Transforming data into action: the business
outlook for data governance, explores the business contributions of data
governance at organisations globally and across industries, the challenges
faced in creating useful data governance policies and the opportunities to
improve such programmes.
This report, developed by The Economist Intelligence Unit and sponsored by
Collibra, draws on a survey of more than 500 business executives working in
North America and Europe in the financial services, healthcare and life sciences,
manufacturing, retail and consumer packaged goods, telecommunications and
technology industries.
Additionally, we conducted in-depth interviews with corporate leaders and experts
in data governance. We would like to thank the following for their insights and
contribution to this research:
•	 Jennifer Curtiss, vice president, head of enterprise data governance,
American Express
•	 Sanjay Saxena, senior vice president of enterprise data governance and
strategy, Northern Trust
•	 Abhi Seth, senior director of data science and analytics, 		
Honeywell Aerospace
Joe Cahill was the author of the report; Michael Hoffmann was the editor.
About this report												 2
Transforming data into action: The business outlook for data governance					 3
Today’s approach to data governance							 5
Good governance grades				 7
Data governance on offense				 9
Clearing barriers to better data governance				 11
A new day for data governance				 13
Appendix							 14
3© The Economist Intelligence Unit Limited 2018
TRANSFORMING DATA INTO ACTION:
THE BUSINESS OUTLOOK FOR DATA GOVERNANCE
New digital technologies such as artificial intelligence, big data and the
Internet of Things are inspiring more business executives globally to
acknowledgethepotentialstrategicvalueofdata.Thechallengeisconverting
raw data, in their ever-increasing quantity, into actionable insights and
deploying them effectively in both internal and external business operations.
Capitalising on data requires more than cutting-edge technologies. Companies
also need a framework for gathering, validating, protecting and disseminating
information. That’s where data governance comes in. Less glamorous than the
futuristic digital capabilities it supports, data governance involves the essential
work of establishing standards and practices for such activities as regulatory
compliance, privacy, data quality and access to information. And it involves more
than raw numbers: analyses, metrics, algorithms and dashboards are all elements
of data governance.
Getting these tasks and outputs right enables employees to harness the data
generated by their businesses and have the best chance of translating such data into
meaningful strategic insights. Good data governance can help companies create a
competitive advantage from their data by revealing untapped market opportunities
and highlighting unnecessary expenses.
“Data governance is a foundational concept for any large organisation like ours,” says
Abhi Seth, senior director of data science and analytics at Honeywell Aerospace, a
Phoenix-based manufacturer with nearly $15bn in annual revenue.
Although many companies have started to develop data governance programmes,
new research from The Economist Intelligence Unit reveals that for most companies
this is an untapped opportunity to advance business strategy. Our survey of 500
senior executives spanning multiple industries in Europe and North America
shows that nearly all business executives consider data essential to meeting their
company’s strategic challenges.
But many survey respondents say their organisation’s approach to data governance
emphasises legal and compliance requirements (55%) or privacy concerns (44%)
rather than strategic objectives. Accordingly, executives spend most of their time
ensuring that their data practices comply with applicable laws and protecting
sensitive information from hackers. They spend less time figuring out how to make
data useful and accessible to marketers, financial forecasters, plant managers,
procurement officers, R&D teams and others who can use this information to
developnewproductsorservices,increasesales,cutcostsandimproveproductivity.
The emphasis on compliance and data security is understandable and crucial,
considering the introduction of new regulations globally and the reputational
and financial damage caused by widely publicised data breaches and lapses in
data management at major corporations such as Target, Equifax and Facebook.
And this focus is delivering many hoped-for improvements—about two-thirds of
respondents say data security or data quality is getting better at their companies.
Transforming data into action:
The business outlook for data governance
Good data governance
can help companies
create a competitive
advantage from their data
by revealing untapped
market opportunities
and highlighting
unnecessary expenses.
4© The Economist Intelligence Unit Limited 2018
TRANSFORMING DATA INTO ACTION:
THE BUSINESS OUTLOOK FOR DATA GOVERNANCE
However, compliance isn’t seen as a top strategic challenge, and operational
improvements only go so far in helping companies meet their strategic objectives.
Tellingly, less than one-fifth of respondents identify innovation or increased revenue
as one of the top benefits realised by their organisation’s data governance strategy.
These findings suggest that the time is ripe to take data governance beyond
compliance and protection. A broader approach that includes strategic priorities
can help companies discover new opportunities that can drive greater success in
the marketplace and a higher return on investment in data governance. “A lot of
companies have gotten control of the basic defensive aspects of data governance,”
says Jennifer Curtiss, head of enterprise data governance at American Express. “Now
they can focus on using data governance more offensively to achieve business goals.”
Innovation (eg, digital transformation)
Increasing market share
Regulatory uncertainty
New customer acquisition (eg, customer 360)
Business model sustainability
New product introduction
Economic uncertainty
Entry of new competitors
Omnichannel engagement
Other, please specify
TABLE 1: Top strategic challenges faced by business
What are the main strategic challenges your organisation is facing today?
% of respondents
35
26
22
21
21
19
17
16
10
1
5© The Economist Intelligence Unit Limited 2018
TRANSFORMING DATA INTO ACTION:
THE BUSINESS OUTLOOK FOR DATA GOVERNANCE
Just how deep does companies’ focus on the compliance-related aspects of
data governance run? The global priorities of regulatory compliance and
data privacy are even more pronounced in some industries. Compliance
commands even more attention in the healthcare sector, where 66% call it
the primary focus of data governance—not a surprising attitude considering
the extensive regulations governing patient privacy. By contrast, only 33% of
respondents across industries look to use data in business units, where they
could help advance strategy.
This intense focus has helped companies implement several best practices related
to compliance, privacy and data quality. More than 90% of respondents say their
companies have familiarised themselves with data governance technologies,
prepared for data-related risks, established the necessary policies and procedures
and bolstered data protection and privacy requirements.
“Compliance is the burning need. It’s not optional,” says Sanjay Saxena, senior vice
president of enterprise data governance and strategy at Northern Trust, a global bank
thatprovideswealthmanagementandtrustservicestoclientsinmorethan90countries.
That tight focus is also reflected in who develops data governance strategies; many
organisations take a siloed approach to data governance. Survey results indicate
most businesses leave data governance to technology executives, with little input
from other functions. A majority of respondents say the chief information officer,
chief data officer or chief information security officer proposes and oversees the
implementation of data governance initiatives. IT officials also evaluate the success
of data governance programmes at two-thirds of the respondents’ companies.
Today’s approach to data governance
Largely driven by legal and
compliance considerations
Largely driven by privacy concerns
(eg, marketing and/or customer concerns)
Largely driven by the need to manage
data from a technology perspective
Focused on line of business usage
(eg, enabling the entire business to use data)
Focused on security
TABLE 2: Top data governance concerns
How would you describe your organisation’s 				
overall approach to data governance?
% of respondents
55
44
44
33
25
“Compliance is the burning
need. It's not optional.”
Sanjay Saxena, senior vice president of enterprise
data governance and strategy, Northern Trust
6© The Economist Intelligence Unit Limited 2018
TRANSFORMING DATA INTO ACTION:
THE BUSINESS OUTLOOK FOR DATA GOVERNANCE
The survey found some variation among industry groups. At technology companies,
CEOsplayabiggerroleateverystageofthedatagovernanceprocess,whilebusiness
unit executives are more involved at healthcare companies. The latter finding may
reflect a trend in which healthcare technology staffers increasingly report to heads
of business units rather than to IT managers.
Honeywell’s Mr Seth says companies emphasise compliance and security because
executives know the consequences of a data breach can be devastating. When
retailerTargetlostcontrolofthecreditcarddataof40mcustomers,legalsettlements
and other related expenses totalled an estimated $300m—not to mention damage
to the company’s brand.
Data security and privacy are major concerns for Honeywell Aerospace, which
manufactures products ranging from cockpit controls and jet engines to wheels
and brakes for commercial airlines and military customers worldwide. Still, Mr Seth
warns that an overemphasis on liability risk sometimes “drives a lock-down of data”,
keeping the information away from people who could use it to create value.
Indeed, too much of a focus on managing risk may discourage businesses from
taking bets on new opportunities. A recent Gartner report describes enterprise data
management as still in the “reactive stage” but notes that data-driven business roles
are expanding and diversifying outside of IT.1
However, even in a compliance-led environment, some companies are finding
that compliance and strategy can be complementary goals. American Express, the
global financial services company, is reaping business benefits from its efforts to
comply with the European Union’s General Data Protection Regulation (GDPR). The
GDPR, which takes effect in May of 2018, requires businesses to locate, verify and
secure all data that can identify individual customers. While scouring its systems for
information, American Express also comes across useful non-customer data that
help marketing teams better understand customer needs. Rather than being simply
a regulatory burden, GDPR compliance also has helped American Express “provide
differentiated service to our customers", Ms Curtiss says.
Footnote:
1.	 Gartner 2018. “Data management is pressed between
support for analytics and data governance, risk and
compliance.” https://www.gartner.com/doc/3869363/
survey-analysis-data-management-pressed.
Indeed, too much of a
focus on managing risk
may discourage businesses
from taking bets on
new opportunities.

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Eiu collibra transforming data into action-the business outlook for data governance

  • 1. 1© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE Sponsored by:
  • 2. 2© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE Contents About this report As businesses generate and manage vast amounts of data, companies have moreopportunitiestogatherdata,incorporateinsightsintobusinessstrategy and continuously expand access to data across the organisation. Doing so effectively—leveraging data for strategic objectives—is often easier said than done, however. This report, Transforming data into action: the business outlook for data governance, explores the business contributions of data governance at organisations globally and across industries, the challenges faced in creating useful data governance policies and the opportunities to improve such programmes. This report, developed by The Economist Intelligence Unit and sponsored by Collibra, draws on a survey of more than 500 business executives working in North America and Europe in the financial services, healthcare and life sciences, manufacturing, retail and consumer packaged goods, telecommunications and technology industries. Additionally, we conducted in-depth interviews with corporate leaders and experts in data governance. We would like to thank the following for their insights and contribution to this research: • Jennifer Curtiss, vice president, head of enterprise data governance, American Express • Sanjay Saxena, senior vice president of enterprise data governance and strategy, Northern Trust • Abhi Seth, senior director of data science and analytics, Honeywell Aerospace Joe Cahill was the author of the report; Michael Hoffmann was the editor. About this report 2 Transforming data into action: The business outlook for data governance 3 Today’s approach to data governance 5 Good governance grades 7 Data governance on offense 9 Clearing barriers to better data governance 11 A new day for data governance 13 Appendix 14
  • 3. 3© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE New digital technologies such as artificial intelligence, big data and the Internet of Things are inspiring more business executives globally to acknowledgethepotentialstrategicvalueofdata.Thechallengeisconverting raw data, in their ever-increasing quantity, into actionable insights and deploying them effectively in both internal and external business operations. Capitalising on data requires more than cutting-edge technologies. Companies also need a framework for gathering, validating, protecting and disseminating information. That’s where data governance comes in. Less glamorous than the futuristic digital capabilities it supports, data governance involves the essential work of establishing standards and practices for such activities as regulatory compliance, privacy, data quality and access to information. And it involves more than raw numbers: analyses, metrics, algorithms and dashboards are all elements of data governance. Getting these tasks and outputs right enables employees to harness the data generated by their businesses and have the best chance of translating such data into meaningful strategic insights. Good data governance can help companies create a competitive advantage from their data by revealing untapped market opportunities and highlighting unnecessary expenses. “Data governance is a foundational concept for any large organisation like ours,” says Abhi Seth, senior director of data science and analytics at Honeywell Aerospace, a Phoenix-based manufacturer with nearly $15bn in annual revenue. Although many companies have started to develop data governance programmes, new research from The Economist Intelligence Unit reveals that for most companies this is an untapped opportunity to advance business strategy. Our survey of 500 senior executives spanning multiple industries in Europe and North America shows that nearly all business executives consider data essential to meeting their company’s strategic challenges. But many survey respondents say their organisation’s approach to data governance emphasises legal and compliance requirements (55%) or privacy concerns (44%) rather than strategic objectives. Accordingly, executives spend most of their time ensuring that their data practices comply with applicable laws and protecting sensitive information from hackers. They spend less time figuring out how to make data useful and accessible to marketers, financial forecasters, plant managers, procurement officers, R&D teams and others who can use this information to developnewproductsorservices,increasesales,cutcostsandimproveproductivity. The emphasis on compliance and data security is understandable and crucial, considering the introduction of new regulations globally and the reputational and financial damage caused by widely publicised data breaches and lapses in data management at major corporations such as Target, Equifax and Facebook. And this focus is delivering many hoped-for improvements—about two-thirds of respondents say data security or data quality is getting better at their companies. Transforming data into action: The business outlook for data governance Good data governance can help companies create a competitive advantage from their data by revealing untapped market opportunities and highlighting unnecessary expenses.
  • 4. 4© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE However, compliance isn’t seen as a top strategic challenge, and operational improvements only go so far in helping companies meet their strategic objectives. Tellingly, less than one-fifth of respondents identify innovation or increased revenue as one of the top benefits realised by their organisation’s data governance strategy. These findings suggest that the time is ripe to take data governance beyond compliance and protection. A broader approach that includes strategic priorities can help companies discover new opportunities that can drive greater success in the marketplace and a higher return on investment in data governance. “A lot of companies have gotten control of the basic defensive aspects of data governance,” says Jennifer Curtiss, head of enterprise data governance at American Express. “Now they can focus on using data governance more offensively to achieve business goals.” Innovation (eg, digital transformation) Increasing market share Regulatory uncertainty New customer acquisition (eg, customer 360) Business model sustainability New product introduction Economic uncertainty Entry of new competitors Omnichannel engagement Other, please specify TABLE 1: Top strategic challenges faced by business What are the main strategic challenges your organisation is facing today? % of respondents 35 26 22 21 21 19 17 16 10 1
  • 5. 5© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE Just how deep does companies’ focus on the compliance-related aspects of data governance run? The global priorities of regulatory compliance and data privacy are even more pronounced in some industries. Compliance commands even more attention in the healthcare sector, where 66% call it the primary focus of data governance—not a surprising attitude considering the extensive regulations governing patient privacy. By contrast, only 33% of respondents across industries look to use data in business units, where they could help advance strategy. This intense focus has helped companies implement several best practices related to compliance, privacy and data quality. More than 90% of respondents say their companies have familiarised themselves with data governance technologies, prepared for data-related risks, established the necessary policies and procedures and bolstered data protection and privacy requirements. “Compliance is the burning need. It’s not optional,” says Sanjay Saxena, senior vice president of enterprise data governance and strategy at Northern Trust, a global bank thatprovideswealthmanagementandtrustservicestoclientsinmorethan90countries. That tight focus is also reflected in who develops data governance strategies; many organisations take a siloed approach to data governance. Survey results indicate most businesses leave data governance to technology executives, with little input from other functions. A majority of respondents say the chief information officer, chief data officer or chief information security officer proposes and oversees the implementation of data governance initiatives. IT officials also evaluate the success of data governance programmes at two-thirds of the respondents’ companies. Today’s approach to data governance Largely driven by legal and compliance considerations Largely driven by privacy concerns (eg, marketing and/or customer concerns) Largely driven by the need to manage data from a technology perspective Focused on line of business usage (eg, enabling the entire business to use data) Focused on security TABLE 2: Top data governance concerns How would you describe your organisation’s overall approach to data governance? % of respondents 55 44 44 33 25 “Compliance is the burning need. It's not optional.” Sanjay Saxena, senior vice president of enterprise data governance and strategy, Northern Trust
  • 6. 6© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE The survey found some variation among industry groups. At technology companies, CEOsplayabiggerroleateverystageofthedatagovernanceprocess,whilebusiness unit executives are more involved at healthcare companies. The latter finding may reflect a trend in which healthcare technology staffers increasingly report to heads of business units rather than to IT managers. Honeywell’s Mr Seth says companies emphasise compliance and security because executives know the consequences of a data breach can be devastating. When retailerTargetlostcontrolofthecreditcarddataof40mcustomers,legalsettlements and other related expenses totalled an estimated $300m—not to mention damage to the company’s brand. Data security and privacy are major concerns for Honeywell Aerospace, which manufactures products ranging from cockpit controls and jet engines to wheels and brakes for commercial airlines and military customers worldwide. Still, Mr Seth warns that an overemphasis on liability risk sometimes “drives a lock-down of data”, keeping the information away from people who could use it to create value. Indeed, too much of a focus on managing risk may discourage businesses from taking bets on new opportunities. A recent Gartner report describes enterprise data management as still in the “reactive stage” but notes that data-driven business roles are expanding and diversifying outside of IT.1 However, even in a compliance-led environment, some companies are finding that compliance and strategy can be complementary goals. American Express, the global financial services company, is reaping business benefits from its efforts to comply with the European Union’s General Data Protection Regulation (GDPR). The GDPR, which takes effect in May of 2018, requires businesses to locate, verify and secure all data that can identify individual customers. While scouring its systems for information, American Express also comes across useful non-customer data that help marketing teams better understand customer needs. Rather than being simply a regulatory burden, GDPR compliance also has helped American Express “provide differentiated service to our customers", Ms Curtiss says. Footnote: 1. Gartner 2018. “Data management is pressed between support for analytics and data governance, risk and compliance.” https://www.gartner.com/doc/3869363/ survey-analysis-data-management-pressed. Indeed, too much of a focus on managing risk may discourage businesses from taking bets on new opportunities.
  • 7. 7© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE Executives generally appear satisfied with data governance at their companies: Nearly 80% of survey respondents rate their governance programmes good or excellent. Satisfaction levels are highest in North America, where 22% of respondents consider their data governance excellent, compared with 12% in the United Kingdom and Ireland and only 8% in continental Europe. From an industry perspective, about one-quarter of retail and technology executives consider their data governance approach excellent—more than twice the share of respondents in manufacturing and healthcare. Perhaps the process of preparing for the GDPR has opened European executives’ eyes to data governance challenges still unnoticed elsewhere. Companies in the European Union have spent the past few years preparing to comply with the economic bloc’s sweeping privacy mandate, which establishes strict, uniform data governance requirements—backed by significant penalties—for all organisations that manage the data of EU citizens. However, this satisfaction clearly relates to companies’ main goals, compliance and security. Nearly all businesses say they’re good at data security, for example, and well over half say the same of their ability to comply with regulations. The emphasis on security is still well-warranted. Using data from a global survey of consumers, the Edelman 2018 Trust Barometer notes that the number one trust-building mandate for business is to safeguard privacy.2 Good governance grades Footnote: 2. Edelman 2018. Trust Barometer. “The State of Business”. http://cms.edelman.com/sites/default/ files/2018-02/2018_Edelman_Trust_Barometer_State_ of_Business.pdf Maintaining data security Staying up to date with compliance requirements Producing valuable business insights from data Addressing interoperability challenges within IT infrastructure Training employees to comply with data regulations Encouraging cross-functional collaboration Hiring employees with data governance skills Preparing for emerging technologies TABLE 3: Data governance capabilities How successful is your organisation at each of the following data governance practices? % of respondents choosing "very successful" or "successful" 95 91 86 84 83 82 81 76 Satisfaction clearly relates to companies' main goals, compliance and security.
  • 8. 8© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE It’s notable, therefore, that more than three-quarters also are confident in their companies’ ability to glean valuable insights from data, and large majorities say they successfully foster cross-functional collaboration. These findings suggest that many companies might be well-prepared to pivot their data governance programmes to a more strategic focus. The survey offers some additional hope. Most companies assess data governance performance through the lens of compliance—and data quality. Accuracy, which is crucial to using data effectively, is the top metric for 51% of respondents, followed by regulatory compliance at 49%. Not surprisingly, compliance concerns rank highest for executives in legal and finance functions, where rules and regulations govern so many activities. That said, only 40% of respondents currently evaluate their data governance programmes based overtly on contributions to strategic goals. WhileHoneywellcloselymonitorscompliancewithinternaldataqualityrequirements, Mr Seth puts more stock in “soft” indicators of data awareness throughout the company. He’s particularly interested in the types of questions he gets from people in the field. Initially, line managers are most interested in backward-looking, quantitative operational data, he says. When they start asking higher-level questions about using data to solve business problems and identify new opportunities, he knows they “are starting to open their eyes to data” as a driver of value. Accuracy of data Compliance Contribution to strategic goals Availability of data for internal needs Improved employee understanding of how data is accessed and used Achieving expected ROI on direct investments in data governance We don’t have established metrics to assess data governance No metrics have been in use long enough to assess Don’t know TABLE 4: Measuring success of data governance How, if at all, does your organisation measure the success of its approach to data governance? % of respondents 51 49 40 39 34 32 3 3 1
  • 9. 9© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE At American Express, Ms Curtiss has set a “goal to align data governance with the goals of the business”. She’s steering a data governance programme that was initially focused on compliance toward an active role in driving strategic success and bottom-line results. Her team of 30 data professionals uses a deep, centralised data platform that makes high-quality data readily accessible to American Express staffers around the world. The data platform reduces costs and boosts productivity by automating and accelerating data-related activities once performed by separate lines of business throughout the company. Another early benefit is completing data quality and preparation work centrally, which enables data scientists to spend more time generating valuable insights for the business. Mr Saxena has overseen a similar evolutionary shift since joining Northern Trust in 2016. With a mandate from senior leadership, he’s reorienting governance around strategic objectives and integrating it into front-line business units. “Data governance at Northern Trust is becoming more business-centric,” Mr Saxena says. As manager of trillions of dollars in assets for wealthy individuals and large institutions, Northern Trust holds vast troves of sensitive and potentially valuable information. Well- developed data governance protocols help safeguard these data while also supporting new revenue-generating services. Effective data management can provide richer, timelier and more reliable insights regarding investment performance, trading patterns, market trends and other critical factors tailored to individual client needs. “Inourindustry,data-as-a-serviceisreallycatchingon,”MrSaxena says. “Data governance is helping us build those offerings.” At Honeywell Aerospace, strategically integrated data governance is generating value across the company. One example is a new pricing platform that gives pricing analysts instantaneous access to relevant data from multiple internal andexternalsourcessuchascustomersorvendors.Information that previously took weeks to gather is now automatically and continuously updated in a database accessible at a keystroke. These changes allow analysts to price more precisely and respond more quickly when customers ask for quotes. Data governance on offense Four keys to strategic data governance MrSethofHoneywellAerospaceoutlinesfourkeyelements of a data governance programme that supports business objectives. The compliance and security element is just one of the four. Data gathering and availability. Mr Seth’s team works with business units to identify important information about markets and internal operations, locate sources of those data and translate the information into meaningful formats for decision-makers. For example, the company has created a data dictionary that helps people across business units understand different types of data. Data accuracy. A data-driven strategy is only as good as the information it relies on. Honeywell ensures the accuracy of data through real-time monitoring and quality checks. These automated systems ensure that workers are fully and accurately recording data that others throughout the company can rely on for decision-making. Data access. Honeywell determines who needs what data and ensures their accessibility to anyone with legitimate need. For example, policies encouraging access to data across functional boundaries have helped turn information from the company’s repair and service operations into valuable insights for developers of new predictive maintenance services. The data illustrate how often various mechanical components or parts are likely to require service or replacement. Compliance, security and privacy. Regulatory compliance, data security and privacy protection are interrelated, critical functions of any data governance regime. As a US defence contractor, Honeywell Aerospace must protect sensitive government information. To prevent leaks, Mr Seth’s team of 35 data scientists, data engineers and data architects created a system of tiered data rights that gives different employees varying degrees of information access.
  • 10. 10© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE Advanced analytics also drive efficiency gains at Honeywell factories. Detailed, timely production data help managers improve yields, reduce downtime and boost output. Rising productivity from new data-driven insights can expand profit margins and enable manufacturers like Honeywell to meet growing demand without investing capital to build new production lines. “Better data quality is generating better financial performance as well as operational excellence,” Mr Seth says. And, of course, it’s better data governance that underlies that better quality. Data governance will take on even greater strategic importance as new technologies create new possibilities—and vastly larger amounts of data. It’s very hopeful news that large majorities of business executives expect artificial intelligence, blockchain, cloud computing and IoT to improve their data governance capabilities. Such improvement is already happening at Northern Trust, which recently joined forces with a large technology company to develop a record-keeping system based on blockchain for the bank’s private equity clients. The digital ledger provides a secure, authenticated and automated record of limited partner investments and other transactions that previously were tracked manually, saving private equity firms’ money and improving their security. Ms Curtiss of American Express also sees “huge potential for those technologies”. She says artificial intelligence and machine learning are generating meaningful productivity gains in activities such as data mapping, an essential but laborious process of matching up bits of data from various sources and assigning them to appropriate categories. Automated systems complete these chores faster than humans and just as accurately, she says. “We’re using AI and machine learning to analyse data more quickly and produce higher quality outcomes,” she says. “What used to take months now takes hours.” Cloud Artificial Intelligence IoT Blockchain TABLE 5: Expectations for emerging technologies How do you expect each of the following emerging technologies and/ or trends to impact the quality of your organisation’s approach to data governance (ie, its ability to manage organisational data, information and analytics assets to ensure compliance, integrity and privacy)? % of respondents choosing "somewhat" or "significant" positive impact 79 70 69 59 “Better data quality is generating better financial performance as well as operational excellence.” Abhi Seth, senior director of data science and analytics, Honeywell Aerospace “We're using AI and machine learning to produce higher quality data more quickly...What used to take months now takes hours.” Jennifer Curtiss, vice president, head of enterprise data governance, American Express
  • 11. 11© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE While companies are already seizing some opportunities to combine data governance and business strategy (and seeing many more going forward), they still face several obstacles to implementing such data governance programmes. Data security challenges, an overwhelming amount of data and changing regulatory or compliance trends loom largest for survey respondents. Survey responses indicate that compliance poses the most frequent challenge in the heavily regulated finance sector, where banks navigate a maze of rules ranging from fair credit reporting standards to anti- money-laundering regulations. Banks with European operations also will bear heavy compliance burdens under the GDPR. Clearing barriers to better data governance Security concerns An overwhelming amount of data Compliance and regulatory concerns Bureaucratic challenges Lack of alignment between IT and organisation’s strategy Lack of skills Poor data quality Lack of proper tools or technology Lack of trust in data Lack of leadership Inability to find the data needed to perform job functions We do not face any barriers Other, please specify TABLE 6: Barriers to data governance What, if any, are your organisation’s biggest barriers to implementing effective data governance? % of respondents 28 26 26 25 22 18 17 17 13 13 12 8 1
  • 12. 12© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE To comply with the GDPR, Northern Trust has undertaken a company-wide effort to track down all customer data and make sure these are secure and readily accessible to customers and regulators. “We have mapped out all of the sensitive data in our high-risk systems,” Mr Saxena says. “That was a massive effort” for his 14-member data governance team and numerous others throughout the organisation. Butallthesespecificchallengespalebeforethechallengeofculturechange.MrSaxena says his greatest challenge to creating a more nuanced data governance strategy was convincing some managers that Northern Trust needed an integrated data governance model that engages all workers, not just IT staff, in every business unit. “That was a tough uphill climb for us,” he says. He met the challenge by forming a data governance committee comprising both technology executives and business leaders and embedding a data steward in each business unit to oversee its data practices. Mr Seth says older companies in traditional industries that are looking to build a strong, value-oriented data governance programme face a similar shift. The notion of data as an asset was a novel concept at Honeywell, with its century-long history in the nuts-and-bolts world of manufacturing. Time and effort are required to convince people that information should be treated with the same care as sophisticated avionics equipment. “That transformation doesn’t happen overnight”, says Mr Seth, who calls himself “an evangelist for data governance” around the company. Fortunately, an influential believer endorses his message. “The data governance initiative is really driven by our CEO, Tim Mahoney,” Mr Seth says. He adds that Mr Mahoney understands the strategic value of data and backs Mr Seth’s efforts to develop those assets through data governance. His support fosters buy-in and co-operation throughout the organisation, Mr Seth says. Evenmorepersuasiveisproofthatdatagovernancesolvesbusinessproblems,advances strategy and boosts the bottom line. As success stories accumulate, buy-in accelerates. When people see tangible business benefits, they are more likely to support data governance policies that make information more accurate, useful and accessible. “Once you show value, using data throughout the business becomes a lot easier,” Mr Seth says. As success stories accumulate, buy-in accelerates. When people see tangible business benefits, they are more likely to support data governance policies that make information more accurate, useful and accessible.
  • 13. 13© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE Many companies have yet to overcome these barriers and tap the full strategic potential of data governance. But more and more organisations are making the connection between data governance and strategy as executives look everywhere for business insights that will improve performance and as the amount of data available steadily increases. Senior leaders at companies like American Express, Northern Trust and Honeywell Aerospace understand that data governance focused on business objectives can help drive growth strategy, result in improvements in productivity and contribute to success in the marketplace. Companies that want to make the same leap would do well to build a data governance programme incorporating all the key elements of data gathering and availability, data accuracy and data access onto the foundation of compliance and security. Communication and leadership support will help drive the culture change many companies will need to make. And as data governance moves up the C-suite agenda and out into business units, executives leading these efforts, like many CIOs and CTOs before them, will move from being overseers of a support function to taking on a central role in corporate strategy. Already, Mr Seth says, “I get pulled into a lot of meetings in our executive conference room.” Both data and line of business executives globally will spend more time in similar conference rooms as more organisations begin to appreciate the strategic value of data governance. A new day for data governance
  • 14. 14© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE Appendix 1: Tables Innovation (eg, digital transformation) Increasing market share Regulatory uncertainty New customer acquisition (eg, customer 360) Business model sustainability New product introduction Economic uncertainty Entry of new competitors Omnichannel engagement Other, please specify Don’t know TABLE 1: Top strategic challenges faced by business What are the main strategic challenges your organisation is facing today? % of respondents 35 26 22 21 21 19 17 16 10 1 Largely driven by legal and compliance considerations Largely driven by privacy concerns (eg, marketing and/or customer concerns) Largely driven by the need to manage data from a technology perspective Focused on line of business usage (eg, enabling the entire business to use data) Focused on security Other, please specify Don’t know TABLE 2: Top data governance concerns How would you describe your organisation’s overall approach to data governance? % of respondents 55 44 44 33 25 Maintaining data security Staying up to date with compliance requirements Producing valuable business insights from data Addressing interoperability challenges within IT infrastructure Training employees to comply with data regulations Encouraging cross-functional collaboration Hiring employees with data governance skills Preparing for emerging technologies (eg, artificial intelligence, blockchain, IoT) TABLE 3: Data governance capabilities How successful is your organisation at each of the following data governance practices? % of respondents choosing "very successful" or "successful" 95 91 86 84 83 82 81 76 TABLE 4: Measuring success of data governance How, if at all, does your organisation measure the success of its approach to data governance? % of respondents Accuracy of data Compliance Contribution to strategic goals Availability of data for internal needs Improved employee understanding of how data is accessed and used Achieving expected ROI on direct investments in data governance We don’t have established metrics to assess data governance No metrics have been in use long enough to assess Don’t know Other, please specify 51 49 40 39 34 32 3 3 1
  • 15. 15© The Economist Intelligence Unit Limited 2018 TRANSFORMING DATA INTO ACTION: THE BUSINESS OUTLOOK FOR DATA GOVERNANCE Cloud Artificial Intelligence IoT Blockchain TABLE 5: Expectations for emerging technologies How do you expect each of the following emerging technologies and/or trends to impact the quality of your organisation’s approach to data governance (ie, its ability to manage organisational data, information and analytics assets to ensure compliance, integrity and privacy)? % of respondents choosing "somewhat" or "significant" positive impact 79 70 69 59 Security concerns An overwhelming amount of data Compliance and regulatory concerns Bureaucratic challenges Lack of alignment between IT and organisation’s strategy Lack of skills Poor data quality Lack of proper tools or technology Lack of trust in data Lack of leadership Inability to find the data needed to perform job functions We do not face any barriers Other, please specify Don’t know TABLE 6: Barriers to data governance What, if any, are your organisation’s biggest barriers to implementing effective data governance? % of respondents 28 26 26 25 22 18 17 17 13 13 12 8 1
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