News

posted on 08 July 2008 08:52

An IBM enterprise customer grouping, the Data Governance Council, reckons enterprise data will be treated as an asset on the balance sheet and reported by the chief financial officer.

The council, which met recently, identified five issues facing business:-

1. Data governance will become a regulatory requirement in an increasing number of countries and organizations with possible regular audits.

2. The value of data will be treated as an asset on the balance sheet and reported by the Chief Financial Officer while the quality of data will become a technical reporting metric and key IT performance indicator.

3. Calculating risk will be used more pervasively across enterprises for small and large decision-making and will be increasingly automated by information technology. Risk calculation will be automated providing greater transparency to more easily examine past exposure, forecast direct and indirect risk, and set aside capital to self-insure and cover risk.

4. The role of the Chief Information Officer (CIO) will change, making this corporate officer responsible for reporting on data quality and risk to the Board of Directors. The CIO will have the mandate to govern the use of information and report on the quality of the information provided to shareholders.

5. Individual employees will be required to take more responsibility for recognizing problems and participating in the governance process to facilitate greater operational transparency and the identification of risk. They will be aided by new categories of operational software that will demonstrate common data governance problems and allow employees to self-govern; sponsor and vote on new policies; provide feedback on existing ones and participate in dynamic data governance.

The IBM Data Governance Council is a group of 50 global companies, including American Express, Bank of America, Bank of Tokyo-Mitsubishi UFJ, Ltd, Bank of Montreal, Bell Canada, BMO Financial Group, Citibank, Deutsche Bank, and the World Bank, among others, that have, IBM says, pioneered best practices around risk assessment and data governance to help the business world take a more disciplined approach to how companies handle data.

Richard Livesley, head of information governance and quality at BMO Financial Group, said: "Data has become the new currency in today's information economy, but many businesses make the wrong decisions by not using the right information. There is no one-size-fits-all approach to data governance. Every company must configure their own data governance program based on their individual needs. Likewise, there are different levels of data governance maturity and different ways of attaining it. In just a few years, data governance will become a key benchmark as boards of directors recognize their fiduciary responsibility to enhance and protect data, and markets measure business performance by looking at data value and risk on the balance sheet."

According to the Council, investors and consumers alike will benefit as data governance emerges as a required discipline for organizations, giving rise to greater trust, better transparency and reduced risk. Data governance today is at a crossroads, creating the opportunity for a marked change over the next four years as data quality evolves into a key performance indicator for businesses worldwide.

The Council plans to build an Information Governance Framework based on its existing Data Governance Maturity Model that will define standards and best practices. This new framework will provide guidance for organizations to execute data governance at a granular level with defined roles, tasks, activities and a broad set of data governance procedures to make data governance a part of business operations.

For more information on the Data Governance Council, click here.

^{[Paul Roberts, news editor.]}