If Europe’s new GDPR data regulations started a fire, California’s new act is pouring on the petrol. The legislation grants consumers even more rights effective January 1 of next year, and has companies scrambling to get their data house in order.
If regulations weren’t enough, MIT has found that bad data is more expensive than we thought: It costs companies 15-20 percent of their revenue in the form of poorly received products, wasted ad dollars, misguided sales outreach, upset customers, and false projections.
Everyone knows data governance is crucial. Everyone knows data quality must get better. So why are they all sitting around pointing fingers at IT?
Historical role bias
Ninety-five percent of professionals think data governance is important. Fifty-two percent say it’s critical. But very few plan to do much about it.
Sixty-three percent of organizations still don’t have a dedicated data compliance budget and 46 percent lack a formal strategy. At 40 percent of companies, everyone expects IT to foot the whole data governance bill, as well as come up with the plan.
This is while business units like marketing have spent decades wrestling budgetary and decision-making authority for cloud services away from IT. Buying committees got bigger because everyone wanted a say. Now that we’ve gotten to the un-fun part of owning data, many leaders are shrinking back.
But whoever is reliant on the data flow should be culpable. Sales teams need it (40 percent say they’re seriously impaired without it), marketing teams need it (45 percent now employ data scientists), success teams need it, finance teams need it, product teams need it, and business teams need it. And today, with the ubiquity of cloud connectors and rapid system configuration, almost all of them have a hand it making it worse and increasing bad data costs.
So where’s the culpability disconnect? It may be a semantic thing. “In most organizations, the word ‘governance’ tends to throw off staff, who can become confused with what data governance entails in the organization and what their specific role is,” writes David Chou, in CIO.com. “It should be defined more in terms of data quality and how higher-quality data can advance the efficiency of the business.”
Non-IT business units should also be made aware of how their specific actions affect overall data quality. “Better compliance measurement leads to better compliance management,” wrote Hui Chen former compliance expert at the U.S. Department of Justice, in the Harvard Business Review. Product, business, marketing, success, and sales teams must be made to see how adding more SaaS apps and cloud connectors makes things worse.
And all this of this might lead you, like many, to believe that a new tool is the answer.
CDP to the rescue, right?
Customer data platforms (CDP) are all the rage, but they aren’t about to save anyone in their present incarnation. Gartner believes they’ve reached their hype zenith and are about to plunge into the trough of disillusionment. Companies buy them hoping for a panacea to their data governance woes, but, “like unicorns and yetis, the elusive single unified view of the customer is easier found in dreams than in reality,” Gartner wrote.
“Like unicorns and yetis, the elusive single unified view of the customer is easier found in dreams than in reality.” – Gartner
Many of the CDP platforms out there are either immature startups still seeking product market fit or seasoned veterans riding the buzzword wave. “Nimble vendors chase the next big thing if it’s anywhere near their core competencies,” wrote Forrester in its New Wave for Customer Data Platforms, pointing out that the CDP is a “classic emerging market” in that’s it’s still staggeringly fragmented, and most systems’ impact is unclear.
A company that goes out and buys a CDP tool now in anticipation of January 1 will likely be disappointed because the whole idea is built on a false premise: That you need to move your data to yet another platform, operate on the data, and move it back. With small data sets, this is possible. With medium to large datasets, it creates a cloud connector cabling nightmare that causes more problems than it solves.
To achieve improved data quality and governance, you need central control, but control that seeps into the systems themselves, and governs it where it’s created. We need a platform to perform the CDP function, only directly on the data, in a code-free way that everyone in the business can view and agree to, under IT’s aegis.
What’s also needed is the other hard thing: A serious conversation where all departments admit their responsibility for data quality and agree to work with IT to manage up while IT manages down. Already, there are promising signs that this sort of cooperation is happening.
In a study last year, half of North American marketers said that centralizing data control was the most important thing their organization could do to get more value out of it. Experian also found that 91 percent of C-level executives thought the business was just as culpable as IT.
I say we need to go even further: We need to rebrand ‘data governance’ itself, which was never going to work with present CDPs or cross-functional disorganization anyway, to be about data quality and integrity, which everyone can actually get behind.
About the author: Nick is a CEO, founder, and author with 25 years of experience in tech who writes about data ecosystems, SaaS, and product development. He spent nearly seven years as EVP of Product at Marketo and is now CEO and founder of Syncari.