Introduction

Today’s business environment is highly demanding in terms of organization’s capacity to respond to the changes in a various areas such as business, regulatory, customer behavior, market, technology and so on. The most valuable resource in order to respond to these changes is information. Consequently, it is very important to make evaluation of your data foundation environment. There is a very common sign of data foundation instability. Let see what they are.

There’s no single enterprise view of data

Information technology environment in today’s organizations usually consist of various applications related to particular business domains. Moreover, there is a huge volume of important data in spreadsheets and other kind of semi structured and unstructured data. Lack of single enterprise data repository which would store the whole information potential of the organization, causes “different versions of truth” and inaccuracy in information delivered to the information consumers.

Respond to the new requests is slow and requires significant manual effort

 If a response to the new requests are slow and inefficient and requires a lot of manual effort in report creation point to a data foundation inadequacy. Moreover, response for ad-hoc information request, usually initiated by the senior management will be inadequate.

No ownership of data

If you are information consumer and you are suspicious about semantics of particular data you have to have unique address for complains. That address is data owners. Data owners are those individuals or groups within the organization that are in the position to obtain, create, and have significant control over the content (and sometimes, access to and the distribution of) the data. Data owners often belong to a business rather than a technology organization. For example, an insurance agent may be the owner of the list of contacts of his or her clients and prospects. It is important to make distinction between data owners and data stewards.

The concept of data stewardship is different from data ownership. Data stewards do not own the data and do not have complete control over its use. Their role is to ensure that adequate, agreed-upon quality metrics are maintained on a continuous basis. In order to be effective, data stewards should work with data architects, database administrators, ETL (Extract-Transform-Load) designers, business intelligence and reporting application architects, and business data owners to define and apply data quality metrics. These cross-functional teams are responsible for identifying deficiencies in systems, applications, data stores, and processes that create and change data and thus may introduce or create data quality problems. One consequence of having a robust data stewardship program is its ability to help the members of the IT organization to enhance appropriate architecture components to improve data quality.

Data stewards must help create and actively participate in processes that would allow the establishment of business-context-defined, measurable data quality goals. Only after an organization has defined and agreed with the data quality goals can the data stewards devise appropriate data quality improvement programs.

Difficulty complying with regulatory requirements like Basel II Accord

In some industries, such as financial services, regulatory changes drive the business. Organization’s inability to making efficient response, directly point to inadequacy in their data foundation. Consequently, compliance with regulatory changes is usually achieving on the tactical way by implementing domain specific “silo” solutions. Eventually that would cause additional difficulties in enterprise data integration and infrastructure maintenance.

There is no information strategy

Data Foundation should leverage on adequate information strategy, which is FORMALY defined. Information strategy should be defined considering current situation, business objectives and IT trends. Moreover, since business performance measurement are leveraging on synergy of business processes organization/people and technology, information strategy must cover all of these perspectives.  I would like to particularly emphasize ultimate need for establishing Center of Excellence (COE) and data governance policy and procedures.

Conclusion

The right way of organizing well structured data foundation is to establish a common data dictionary which will be a backbone of data integration process. That would provide comprehensive, well structured data repository consist of reference data, detailed/transactional data and aggregated data which would allow “single truth for all” information delivery. Moreover, data foundation should leverage on well defined information strategy considering business objectives, current situation in the organization and IT trends.

Reference:

IBM Institute for Business Value analysis, Banks and Basel II: How Prepared Are They?, October 2002 Interviews with 32 Financial institutions worldwide