The Role of the Executive Sponsor in Data Governance

One of the key goals of Data Governance is to formalize the accountability for managing information in an organization.  Typically, the problem isn't that there is no one managing data standards; the problem is that there are too many people managing data standards.  I recently had a client that had a very weak Finance organization.  The various businesses controlled most of their Finance resources and had no problem structuring information is a way that benefited them.  This caused many conflicts between the businesses and corporate as there were few common metrics to evaluate performance.  In a well-functioning Data Governance environment, an Executive Sponsor is appointed to formalize the management of information assets.

The Executive Sponsor has overall responsibility for Data Governance.  In some companies such as Yahoo, this role has been elevated to the formal title of Chief Data Officer (CDO).  In most organizations that have a formal Data Governance function, however, the role is typically held by a senior Finance officer from one of the businesses.  This suprises some clients, as they often think that someone from the Shared Service Organization should hold the Executive Sponsor role.  In my experience this is not correct, as it is imperative that the business units take responsibility for the quality of data generated from their organizations.  If the businesses simply throw bad data "over the wall" to the SSO, data quality will never be acceptable.

Another issue that comes up is the role of IT.  My perspective is that IT has an important role in Data Governance, but that their role is to support the Executive Sponsor and related Data Governance committees as they establish standards for and manage information assets.  Data Governance effots led by IT are bound to dissapoint the business units no matter how hard IT works to satisfy them.

In addition to being a senior Finance officer in one of the businesses, the Executive Sponsor would ideally be well-known in the organization, have a history of leading transformation change in the organization, and hold both formal and informal leadership within the organization.

A strong Executive Sponsor for Data Governance is critical to the initiative.  With the right person in the role, a company can manage their information assets in a way that effectively produces value-added intelligence.

Defining the Goals of Data Governance

Companies are increasingly finding that it pays to put a formal governance structure around their information assets.  For too long, companies have failed to put a formal structure around the design, generation and management of their information assets.  In an increasingly global economy, companies are realizing that they must pay attention to information delivery as a compeitive asset.

Data Governance, sometimes  called Data Stewardship, is the process of managing a company's information assets to create and sustain a competitive edge.  In creating a Data Governance program, the first step is to identify the goals of the Governance program.  The impetus for creating a formal program can include:

1. Realigning data governance with the implementation of a new technology.  Many times a new Data Governance structure is required when a company implements a new technology such as an ERP or Business Intelligence system.  These systems will require specific data definitions that must be proactively managed.
2. Realigning data governance with organizational changes.  Management reporting is a dynamic concept that must keep up with the operational needs of the business.  As companies reorganize, it is imperative to identy and manage changes in required management information.
3. Enhancing the quality of existing intelligence without organizational change.  Even in stable companies, it is rare that operational managers have the intelligence they would like to have to manage their business.  World-class finance organizations focus on continuous improvement, and that includes the intelligence they deliver to their colleagues in operations.
4. Supporting compliance initiatives.  Companies must use their information assets to manage compliance efforts, whether driven by external or internal forces.  Data must be managed to efficiently meet these requirements.

These are some of the basic reasons for engaging in a Data Governance program.  In my next Data Governance post, I'll discuss the basic structure of a typical governance program.