Data is an Asset that Grows with Use and Governance

By Matin Jouzdani, Data & AI Leader, KPMG

In today’s digital age, data is more valuable than ever before. Despite huge investments in AI and other technologies, many companies are still struggling to leverage it to its full potential. Organisations continue to be plagued by complex and siloed system architectures, unclear roles or policies, cultural and skills gaps, and interoperability issues across the business.

We estimate that anything up to 80% of the potential value of data is lost by not having the right foundations in place. The most important element of this foundation is strong data governance. A data governance foundation is a set of standards, policies, and procedures that set out how data is collected, managed, and used within an organization. It ensures that data is trusted, accurate, and compliant with regulations and makes sure that all efforts are aligned with the overall data and business strategy.

There are three key elements of a data governance foundation:

Data strategy: This defines the organization’s overall goals for data, such as clearly what data it wants to collect, how it wants to use it, and who will be responsible for managing it. Many organizations invest huge sums in data and AI initiatives without having this fundamental element in place.

Data operating model: This describes how the organization will put its data strategy into practice, including the key roles and responsibilities, how data teams will interact within the organization and ultimately how data governance will be monitored.

Data management policies: These define the standards and guidelines for how data should be collected, managed, and used. They also help to ensure that data is compliant with regulations.

Having a solid foundation for managing data is really important if we want to get the most out of it. Without it, organizations are at risk of making less-effective decisions, making crucial missteps with customers and other stakeholders and being exposed to regulatory non-compliance.

A strong data governance foundation can help organizations improve decision-making. By ensuring that data is accurate and reliable, data governance can help organizations make better decisions. For example, retail banks rely on strong data governance to ensure they are using most up to date customer information, which is not only demanded by Central Banks and other regulators but is vital in making proper lending decisions.