How to Embrace Governance for Tangible Business Results

Nearly every business of any size will commit significant resources to governance of one sort or another in the coming months and years. If done poorly, managers will find themselves asking why they are doing it and why it is costing so much and delivering so little business value.

Terms such as data quality, meta and master data, profiling and validation, stewardship and custodians waft from conference rooms across the nation, reverberating from cubical to board room. But how many of those flinging the phrases back and forth are able to truly articulate how it all comes together into a coherent, efficient and effective return on investment?

You have an opportunity to embrace governance as an exciting new capability, one which drives maturity and improvement throughout your business. Like any capability, it consists of processes which can be clearly aligned with your business goals. You can actually measure value and improve as needed. Most important of all, the impact of governance processes, good or bad, can be fully understood and optimized.

This is new ground for nearly everyone. Few businesses can claim to have established successful governance. But those that have are beginning to discover some surprising benefits.

In fact, Gartner predicted at the Gartner Symposium/ITxpo in Cannes, France that organizations who do not approach information management in a coordinated, enterprise manner, will fail in the first or second year at a rate of more than 90 per cent. Many organizations want to exploit their information assets and address issues surrounding information overload in order to achieve their efficiency, transparency and differentiation objectives. At the same time, they want to ensure appropriate safeguards and measures are in place to protect sensitive information and minimize risk. Despite the recognition of the importance of the issue, many organizations do not have formal information governance programs, or coordinated information management strategies in place.¹

In the past, you may have thought of governance as merely an unavoidable burden on business, introducing confusing and costly constraints which slow or even stop key business processes. You may see no relevance to the actual business of doing your business. As a result, you may have sought ways to simply avoid it. This is certainly understandable, but misses an important opportunity, one which your competition could well use against you sooner than you imagine.

Where does governance go wrong?
Since most governance responses are triggered by some urgent and emerging exposure to risk, efforts are often rushed forward without establishing the basic understanding of how they align to key business goals and processes. As a result, months can go by with effort that is aimless, incoherent and fumbling. Your actual mitigation of risk advances little. And nothing is quite as frustrating as finding that governance introduced to address risk in one area has actually increased it in another, such as making a critical sales goal much more difficult to reach.

You can avoid this by ensuring your governance efforts remain clearly aligned with how your business works. Articulate the four basic elements that support managing any venture successfully.

• Business plan, how and why it works
• Key processes that make your business work
• Core technologies that support those processes
• Information you need to keep your business running smoothly

Continually measure emerging governance against these four elements and you will dramatically increase your return. You will create efficient and beneficial governance processes that bolster rather than burden your business.

What is governance, anyway?
Before we move forward, let’s agree on a simple definition of governance as a system to establish decision-making and authority for how the process works, particularly where processes involve assets or resources of significant value or risk.

It involves all levels of a business, starting with senior managers who draft and approve policies. This might take the form of stating how a particular regulatory requirement will be interpreted, managed and acted upon. Ultimately, this directs the actions of front-line workers, such as when a business analyst monitors month-end reporting for accuracy.

As you may have realized, governance is already happening within your business in a number of different areas. You may find that much of your effort will be devoted to simply organizing those activities more effectively. One of your key tasks will be to identify where it already occurs. We will look into how that can be done in a moment.

How do we recognize governance that already exists? Start by looking for those processes involving business assets or resources. Take the example of sensitive customer data as an asset which also has risk associated with it. A formal definition of how data governance works is as follows:

“Data governance is a system of decision rights and accountabilities for information-related processes, executed according to agreed-upon models which describe who can take what actions with what information, and when, under what circumstances, using what methods.” – Data Governance Institute

Using our example, this could start with a senior manager stating a policy that sensitive customer data will be protected by ensuring specific attributes such as credit card numbers must be strictly protected from abuse. The manager of your sales processes then works with his IT counterpart to identify exactly where this mandate will be applied. Finally, your sales teams are educated on the specific controls that have been put in place by your technical teams.

Governance of any business area must be based on a system of processes that interact with other processes to improve your ability to deliver business value while controlling risk.

How do simple pictures become useful models?
Governance spans your organization both vertically and horizontally to ensure that governance within specific business units is well coordinated both with other areas, and remain aligned with policy established at the higher levels. But this system can and should be developed gradually and improved steadily. Coordinating that effort over time is critical, but it doesn’t need to be an overwhelming process.

You can start immediately by creating a small number of simple pictures which can be gradually deepened in detail over time to become an increasingly dynamic and useful map guiding your efforts.

We have all experienced moments when complex and confusing information have suddenly been made clear and understandable through a simple picture or illustration.

Simple pictures establish context and clarity, and can also serve as a basis for deeper detail to be added over time without losing the ability to return to the original clarity. Simple pictures are actually the first step toward creating functional models that can interact with each other and be easily navigated.

Good models, just like those we built as kids, can be quick to assemble but life-like enough to truly represent the larger reality. By examining the model we can see most of the important features for understanding, even if the details of internal working are absent.

The four elements of your business, when modeled accurately, will provide the insight and confidence that your teams are getting the job done. By combining these four models into a comprehensive map of your business, you can analyze and measure your progress toward a new or improved governance capability. Your governance teams can look at your business from a number of angles, exploring the underlying complexity without becoming overwhelmed by it.

A word of caution: Modeling efforts have been known to take on a life of their own, delaying a response for months as analysts and other specialists embark on exhaustive research. You can and should avoid this. Your modeling should start with simple pictures to which detail is added as needed, and only when needed. Don’t wait for all the detail to be filled in. Even your earliest pictures can be used to provide value back to the business almost immediately.

How does each model add value?
Again, the four elements you will model are:

• The business itself
• Its processes
• Its resources
• And its information

Business Model
Your business model describes the essentials, the nature and motivation of your approach to market. It includes your strategies for competing, your specific goals against which you measure progress, and the basic parts such as product or service lines which deliver value to the market. This can be diagramed in any way that makes sense to you, and each element of your diagram can be drilled into for further detail such as additional diagram depth along with textual descriptions, definitions, policy statements and principles.

Include detail on the specific external drivers, such as regulatory requirements, and map them to the policies which interpret them and define how your business will respond. These policies become the common reference points against which all specific governance processes are defined. This allows you to quickly spot redundant processes and those which exist but which are no longer mapped to a policy. Great news, that process can probably be eliminated.

Don’t forget to consider establishing a new point in your overall business strategy which states that governance will be leveraged to improve your bottom line. You can define specific goals around how you expect that to happen. You may be surprised at what you discover.

Process Model
Every business acts through process. Identify your key processes and map them to your business products and services. This automatically links your key processes with the strategy points and goals which those products and services support, much like identifying your parent leads to identifying your grandparent.

You can also diagram how and where each process interacts with others. As we have seen, governance introduces processes which are intended primarily to improve other processes. You assure this happens by mapping processes to each other to identify impacts, and to specific business goals to measure those impacts.

Resource Model
Next you describe your resources in the form of people, physical assets and technology. Each process requires a blend of resources which can be mapped from this model. This allows you to quickly identify that relationship and, again, to understand impacts when either changes.

Resources interact with each other just as processes do and they support processes. Your model can illustrate this in such a way that you will identify gaps and redundancies in resource allocation, one of the chief goals of good governance.

Of course, this also establishes the basis for showing who is responsible for what. This is critical for understanding where governance is already occurring within your organization. The opportunity here would be to improve coordination with the existing process rather than creating it from scratch. You also know who can probably make that happen.

Information Model
Information is the lifeblood of any business. Accurately identifying which information is most critical allows you to create transparency into how your business works. You also need to know when changes in either process or resources will impact the availability of that information. Mapping your information needs to both business and process models makes this possible.

And don’t forget, governance processes also produce valuable information that can often be leveraged for a wide range of other purposes. You enjoy a surprise increase in your return on investment.

How do I get the most value out of models?
Business capability is founded on a blend of process, resources and information. Governance is, of course, simply another capability, but one which can actually drive crucial improvements to others.

Models add the most value when they accurately represent something specific while also interacting with other models representing other specific parts of the whole picture. Moreover, if one model changes, you should be able to quickly see if that change impacted any of the other models.

Think of a common roadmap. Two towns are linked by a line representing a roadway. Roadways can form simple or complex networks connecting towns in a variety of combinations, and even intersect with each other.

Where the towns exist in two different counties, the line representing a roadway will pass over a line representing the boundary between the two counties. And that boundary line extends to fully outline the county in relationship to all other counties.

Today, tools support interactive models by drawing those lines as dynamic links that can stretch and flow to adjust to changes to objects they connect. If the objects change, the lines can change automatically. This allows for very dynamic mapping between models.

One such critical interaction is the association of people to processes and resources. This lies at the core to understanding and managing governance over time by knowing exactly who has been assigned responsibility for what process.

And just as two diagramed objects can be “mapped” to one another, you should be able to map any object to supporting detailed information and artifacts such a documents.

How do I get meaningful results quickly?
The key to quick and meaningful results lies in an incremental approach that delivers early results of value. This will consist of a combination of tools and practices that allow you to start with those simple but illuminating pictures, deepening detail as needed, while using them immediately in some meaningful fashion. Taken together, this becomes your solution to guiding governance efforts.

Start by expecting early results. Even a high-level picture of your business would allow you to clearly associate a new regulation to a policy that interprets the essential points. Then find the key processes that are impacted. And perhaps even more important, identify those that are not and immediately begin lowering the cost of governance by avoiding effort that is not needed.

Developing governance processes is most effective when driven by the business side rather than technology. Select tools and practices based first and foremost on ease of use, and which offer views based on familiar business terms and concepts.

Pick a solution that can guide you through the process of creating good models, and even suggest where you can improve them. This might take the form of wizards or a knowledge base of good practices and principles. Regardless, the terms used should again be familiar and understandable from a business perspective so that you can use the tool without too much help from specialists.

Make sure that your solution allows you to preserve the simplicity of your original pictures and return to them when you need to refresh your understanding of high-level context. You should be able to “drill in” for that additional detail, such as who has responsibility for a particular governance process. But you should also be able “drill out” and return to the original simple picture. Don’t accept a model tool, for example, that requires you to layer detail on in such a way that it permanently obscures your original vision.

Avoid the costly loss of intellectual property which occurs when the knowledge evaporates or goes stale between the inevitable bursts of governance activity. A good solution should allow all of the models to be captured and preserved as versions over time. Adopting an incremental approach means that your tool must be able to accumulate and deepen detail over time. Make sure you can look back to previous versions to see how things have changed.

Your solution must be robust, reliable, and scalable. It must be manageable as a technology and fit reasonably well within your existing (and hopefully increasingly standardized) IT infrastructure. In addition to your financial capital investment, you will also be investing significant intellectual capital in your governance processes. A well-built, manageable tool is essential to protecting both. Be sure to include your IT team in the selection process on this point.

Ask about support for open standards, especially how data can be exchanged between this tool and others. Those which rely on highly proprietary storage and cannot exchange data freely may trap you into using a tool which you have outgrown, or which has fallen behind its competition. Don’t become hostage to a particular vendor simply because it becomes too difficult or costly to switch without losing your critical intellectual capital investment.

This doesn’t mean that you, as the business manager, can simply turn the whole selection over to your IT organization. Avoid this common mistake. Too often IT teams are left to select solutions in a vacuum. This inevitably leads to IT centric solutions which require IT involvement to work. Business involvement soon drops off, leading to a loss of alignment.

Whatever tool you select, remember that it is only as useful as it is current and accurate in the models it displays. Nothing impacts confidence more quickly than discovering that your view is out of date.

Periodically refresh your models to ensure they stay accurate and immediately useful over the lifecycle of your governance processes. You will be able to respond instantly, accurately and knowledgably to an emerging governance issue without suffering the paralyzing delays required to update your view of your business. Time is money; information is power. Your tool should maximize benefits in both.

What’s the bottom line?
Successfully governing the various aspects of your business, be it data, infrastructure, financial reporting, or otherwise, requires clear alignment. Accomplish this through simple, clear pictures of your business plan, key processes, critical resources and information needs.

Deepen each picture as needed, where needed into four basic models which when combined create an effective map to guide governance. Focus precisely on those critical aspects of your business which require it. By doing so, you can avoid months of wasted effort and delay and you will achieve surprising benefits of a more mature and capable organization. Key points to remember are:

• Governance can actually boost your business
• Use it to drive general process improvement for competitive advantage
• Align to business strategy and goals for maximum benefit
• Translate four simple pictures of your business into useful models that interact
• Defer costly detailed analysis until actually needed, and only if needed

The good news is that the bad news of an audit finding or a lapse in customer privacy can actually result in huge benefits to the business. Look at it as not just another burden, but an opportunity to tidy up the books, get your business tuned up, and gain both a better bottom line and a competitive advantage by getting there before your competition. Don’t dread governance; welcome and nurture it gradually and steadily. You’ll see value that adds up to tangible business results.

1. Gartner Says Start Managing Information, Not Just Technology, Resnumerica 2.0, October 26th, 2007

About the author
Max Gano, a 15-year data and governance expert, is VP and General Manager of Information Delivery at Adaptive, Inc. – a leading provider of Metadata Repository solutions headquartered in Arlington, Virginia. More information is available at www.adaptive.com.