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Archive for February 8th, 2011

Year 2011 has been somewhat different for data management field in terms of manifestos and predictions about what the future holds. At least in the field of data management (DQ/DG etc…) there have been predictions about what features will not hold. In her blog “Jills anti-predictions of 2011”, Jill Dyche identifies what will not happen in 2011 as far as data management /data governance/MDM is concerned within organizations, Dylan Jones in his blog What is or (anti) Data Quality Manifesto? suggest creating anti-manifesto as a viral (anonymous) marketing to force the awareness around perception of the data with management ranks.  This trend has been purely based on many of our collective experience when it comes to management’s lack of commitment and sponsorship (over the years)  to support, plan and execute holistic data governance strategies for supporting high quality data throughout organization for decision-making and operations.

More I think about it, more I feel that (in many instances) ignorance about the state of the data (or data quality) is by design rather than being out of ignorance or lack of understanding. Businesses often hires smart people (most of the cases) in the executive management roles because of their capabilities and the smarts they bring to the table. Many of these executives probably have MBAs and have gone through course work which highlights importance of using accurate data in decision-making. Many of these executives have worked (probably) in some capacities with data throughout their careers and have learned the importance of fact based rather than gut feel based decision-making.

Unwillingness to commit to data management strategies might be stemming from factors which have to do with how success of the executives is evaluated and rewarded.

1.       Pressure to perform on quarterly basis (managing expenses). Many public companies provide their financial results on quarterly basis; every executives focus is to maximize sales profitability in these 90 days. Every attempt is made to curb any unwarranted (in executive’s minds) expenses.

2.       Short term contracts CEO’s (and other executives) have with the board are not conducive for finding long-term solutions. Executives have to prove their worth and short period of time. (In the paper titled “CEO EMPLOYMENT CONTRACT HORIZON AND MYOPIC BEHAVIOR” by Moqui Xu, author concludes that CEO’s with short term contract invest less than their peers. CEO’s with short term contract tend to sacrifice long-term investments for short term value maximization)

3.       Attitude “If I can get “my” numbers and (correct?) data without investing more, Why spend money and efforts on it?”. Little do they know about the manual efforts involved in getting this accurate data, day in and day out to them.

So how can we make a case for investments in Data Management initiatives?

It’s human nature to work hard to avoid pain and/or negative outcome. As human beings, we will do more to avoid pain and negative outcome than to ensure positive results. Executive management will pay more attention to your proposals and business cases for data management when they are faced with situations which are somewhat negative in nature to the performance of overall business. Situations like a restatement of financial results, fines by governing bodies, de-certification or refusal by auditors to sign on compliance, introduction of new legislation around compliance and regulations(it’s no coincidence that many of highly regulated industries like insurance, health care are farther ahead when it comes to data quality/data governance initiatives implementation and adoption) are some of the examples of major negative events (I call them compelling events)within organizational operations which can be effectively used to get executives to listen to the business case for data management. Be ready with your business case, proposal all the time. And when the time is right, present this business case to executive management for their approval and sponsorship. Highlight how initiatives you are proposing will either help avoid these negative situations or help lessen the impact of those negative situations and as a bonus help with the strategic goals of the organization.

For example, recently in their blog, Utopia, Inc. highlighted how inaccurate statement of revenues to their executive rekindled the focus on the data quality/governance initiative within their organization. This is not to say that they were not committed to the data governance or data management initiatives, in fact, they had some of that already in place. This incident provided executive sponsorship and visibility to the data issues and hence commitment from executives for data governance/management initiatives.

I’m not saying that this is the only way to get executive management sponsorship to data management initiatives. There are instances, and there are organizations which will proactively adopt the data management initiatives. Many CEOs will understand strategic inflection points (Only the paranoid survive: Andy Grove) in their industry and would realize importance of effective data management in navigating through changing business conditions. This almost always results in proactively investing and adopting data management business cases.

In ideal world, if businesses adopt best practices for data management ground up, it will help businesses in leveraging data as an asset. Effective data management would help organizations potentially avoid getting into unfavorable situation in first place. Sometimes, though to make a business case one has to choose appropriate timing even though it seems counter intuitive to do so. Sometimes it has to be that way…..

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