In my previous blog, Five Reasons Asset Managers Need Strong Data Governance, I discussed drivers for making the business case for your data governance program. Now, let’s discuss common obstacles encountered when creating a data governance program and how to overcome them.
We know that a one-size-fits-all approach will not work in data governance. Individual data fields have higher priority over others, and each department sees its data as the most critical. A balanced approach with a customizable framework is needed to ensure buy-in from all departments within an organization, large or small. As a result, program sponsors and stakeholders should expect to run into obstacles and push-back during roll-out.
Based on our experience, we have identified five common barriers that investment firms typically encounter when standing-up data governance, along with high-level guidelines to work through these challenges.
1. Lack of executive sponsorship
From the outset, firms need to find senior business sponsorship that is prepared to commit, participate and fund the data governance organization (DGO) initiative. Based on our experience, we find that firms that strategically position with C-level support tend to be the most successful at driving firm-wide participation. In contrast, if the transformative DGO is viewed as a mid-level priority in the eyes of the organization, it will quickly lose momentum.
2. Limited business ownership and participation
Participation is key when initiating data governance, as in some cases the business has yet to realize (or even understand) the benefits and business case for establishing a data governance program. The DGO must motivate, socialize and engage the business to own and contribute from the outset. Each firm’s motivation may differ, but without proper forethought into these motivations, the program will lack start-up purpose and excitement. There may also be skeptics from previous failed launches who must be won over. The easiest way to reestablish support and buy-in is through a series of quick wins and short-term value deliveries.
3. Resource and budget constraints
In an effort to achieve these quick wins and short-term deliveries, thereby gaining critical mass as a DGO, the data governance lead will need to justify the addition of key resources and operational tools. Obtaining approval, particularly in the earlier stages of a DGO’s formation, can be challenging if the DGO value proposition has not been socialized and fully understood. We have found that firms which are able to articulate ways to reduce business inefficiencies and cost (i.e., positive ROI) and risk—in the form of a business case—are best positioned to overcome resistance.
4. Poorly defined scope
Tangential to creating a business case is defining scope. To avoid scope creep and a potential cost overrun, the project team must be judicious when determining scope of the DGO (i.e., charter), data domain and time resources. Finding ways to start “lite” and expand scope through increasing data complexity cycles tends to yield favorable results.
5. Getting lost in the Book of Record noise
Based on recent project engagements and industry roundtable discussions, we have been observing a trend whereby CIOs are implementing Investment Book of Records (IBOR)-based systems (Accounting Book of Records, or ABOR, would remain unchanged) that cater to the investment decision-making needs of their front-office. With the understanding that these projects have a high propensity for being complex, risky and quite costly in nature, we have observed that firms who position themselves in a manner that leverages the transformational nature of these projects could yield positive results and increase their likelihood of standing up a successful DGO.
Any asset management firm considering a formalized data governance program will have its own unique set of challenges to address. Evaluating risks and long-term benefits becomes all the more important. For more Accenture insights on enterprise data management, read “Managing complex workflows with EDM” or contact me at firstname.lastname@example.org.