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12/07/2021

In the “Consumer Products” area at msg, everything revolves around data-driven solutions for the consumer goods market. Data Governance is a key topic here. Dr. Christiana Klingenberg is a data governance expert and advises customers on their data governance strategy. Together with Prof. Dr. Kristin Weber, professor for information technology and business information technology at the University of Applied Sciences Würzburg-Schweinfurt, she has published a book on this topic. In this viewpoint interview, the authors talk about the importance of data governance today and tomorrow.

Klingenberg, in your job at msg, you deal with various topics related to data management. What prompted you to write a book about data governance?

Christiana Klingenberg: The idea of writing a book about data governance has grown in me over the last couple of years. My experience in the past has been that while there is a lot of talk about data governance, practical content dealing with actual implementation is hard to find. This is especially true in the German-speaking world. A lot of information comes from the USA or other Anglo-Saxon countries. Even today it is still the case that English-language books about data governance are published regularly, while there is still a lack of this kind of specialist literature in German. This is why we felt the need to write down and share our knowledge.

Is data governance still a Cinderella issue in Germany?

Christiana Klingenberg: I wouldn’t put it that way because a lot has been done in recent years. Companies have understood all too well that that they can no longer do without data and a great deal has been invested in providing a framework for data as an economic asset. This is then data governance, even if it isn’t always called this. Various activities are often anchored in individual projects. New roles with the necessary responsibilities have been created. This addresses requirements for transparency of corporate data. The are also some legal guidelines that make a certain degree of data governance necessary. Examples are BCBS 239 in the banking environment or GDPR for anyone working with personal data.

Thus, the term data governance is now well established in the German-speaking world.

Weber, why is data governance so important?

Kristin Weber: The importance of data and digitalization has increased enormously over the last few years – and this development is far from over. The greater the importance of data in companies, the more important it becomes to address the issue of how processes can be made more efficient on a data-driven basis. To achieve this, a high level of data quality is crucial and this in turn is heavily dependent on data governance . A high level of data quality can only be ensured if the company has a framework for handling data – this means, internal regulations, responsibilities and measurement options. Data governance is a prerequisite for successful data management.

Who is affected by data governance?

Christiana Klingenberg: In principle, data governance affects every company - albeit to a different extent and to different degrees. Small companies with only a few customers, products and employees do not need a large organizational structure with a Chief Data Officer, for example. Nevertheless, they also have to regulate responsibilities regarding data handling. In international, large companies, data governance can have country-specific features. On the one hand, there are national guidelines that must be adhered to. On the other hand, the subsidiaries may be of different sizes and have different requirements and needs. So when implementing data governance, the individual goals of the company must always be considered. And then data governance affects every employee in one way or another.

Kristin Weber: Basically, no organization that wants to use its data efficiently and profitably can avoid data governance. Data governance answers several questions about data management. It starts with strategic questions: Which data do we want or need to handle? To what extent does this data contribute to the company’s success? How can this success be measured?

What are the biggest challenges and obstacles regarding data governance?

Christiana Klingenberg: Often, only individual specialist departments or IT departments feel responsible for data governance. But data governance is a topic that is important and must be understood throughout the company. Support from top management is also essential. In the case of a purely bottom-up initiative, employees struggle and quickly lose motivation. For example, changes to data production processes can only be implemented effectively if all departments and employees involved in these processes, also participate. Here, coordination at a higher level becomes important. And this only exists if managers back the data governance initiative. If this isn't the case, employees may see the need for optimization, the possibilities and ways of optimization, but cannot easily put them into practice. This is frustrating for them. It is also still very difficult to define a business case for data governance. As a result, there are no arguments with hard figures to emphasize the importance of data governance for business success in the medium to long term.

Kristin Weber: The implementation of data governance requires staying power. Especially in large companies with many data-using applications, it takes several years to implement data governance comprehensively. But, that shouldn't stop anyone from starting the journey in the first place. For starters, it's important to support individual projects from specialist departments that quickly deliver highly visible success from the first data governance initiatives – the so-called quick wins. In our book, we describe how companies can get started with simple methods. It is then important to build on the initial successes, to stick with it and to advertise on your own behalf within the company.

What is decisive for the success of a data governance strategy?

Christiana Klingenberg: As already mentioned, data governance must be supported by the entire company and by top management. Team spirit and communication between the units also play just as decisive a role as having a good idea of the strategic direction of the company and company data. It is also important to bear in mind that data governance is neither a sure-fire success nor a self-contained project, but part of the corporate culture. This understanding must exist because otherwise a data governance strategy is doomed to fail.

Kristin Weber: We have found out that the implementation of data governance projects often works particularly well when it is linked to other strategic or special projects. For example, in the past, the topic of GDPR was a suitable driver: In the course of implementing GDPR in the company, various adaptations in data management were necessary – companies gradually completed their data governance strategy as a side effect. However, with this approach it is important that the target is in the focus from the start.

How can msg support companies when introducing a data governance strategy?

Christiana Klingenberg: First of all, it is always important to understand exactly what the company's objectives are. Only then we can offer tailored support. Here, we can help with deriving and wording a data strategy at strategic level. We also provide support in setting up a data management organization, for example by advising on defining and filling roles. We are also well positioned when it comes to implementing data management systems or migrating data. What is important here is that there is no blueprint that can be applied to all companies. That's what makes the projects always so interesting. Together with the companies, we identify the greatest need for action and consider how to take remedial action. Our experience helps to assess what might work and what does not. The great advantage of this approach is that we work in partnership and on equal terms with our customers right from the start and are happy to share our expertise.

One final glance into the crystal ball: Where will the journey take us and what trends are already emerging today?

Kristin Weber: It is becoming apparent that data governance is also playing an increasingly important role for data external to the company – for example, in supply chain management. The term “ecosystem data governance” already stands for initial approaches to creating a collaborative environment and simplifying data exchange between companies. Consequently, another buzzword will be gaining in importance in the future: data sovereignty.

Christiana Klingenberg: In addition, two other terms are increasingly being used in connection with data governance: data mesh and storytelling. Data mesh describes an organizational and technical context for handling data products provided by data producers from a variety sources, such as data lakes. This data can be used for specific analyses, even in real time. In the process, they are assigned a product owner who takes responsibility for his/her data package in the data mesh. This brings us back to the topic of data governance. Storytelling, on the other hand, is about understanding data and putting its information into the right context in an exciting way. Only those who achieve this can use data profitably.