It looks like the egg comes second in one “Which came first?” argument. At least, that’s our read on a recent report by Celent, based on a survey of insurance companies on the topic of data governance. It seems that the Data chicken precedes the Governance egg by a long stretch.
Our question to you: Will we ever see a perfect omelet before the landscape is overrun by clucking birds?
What’s what and who’s who…
The report: The Importance of Data Governance: Current Practices, authored by Celent research director Karlyn Carnahan, sought to understand how insurance carriers viewed the value data governance in a world that is becoming increasingly data driven. Forty one carriers, including 28 P&C and 13 Life and Annuity were included. The results were differentiated between large and midsize, with the line drawn at US$1bn premium.
We are calling the Data initiatives the Chickens with the Egg representing the Governance. Our view is that, in the perfect world, the governance egg will contain the DNA and fundamental energy required for healthy chicken data projects. (It’s just an analogy, so we won’t go deeper than that.)
Theory, Meet Reality…
Let’s cut to the chase. The majority of companies see data initiatives as “mission critical”, with all of the remainder scoring them as “highly important”. Enough said.
When it comes to data governance, the report says, “although more than half of the carriers report governance as mission-critical or highly important, fewer than half have formal data governance initiatives in place.” Actions do speak volumes.
Is data governance required?
The Celent report provides some important information about the requirements for governance.
When asked what the biggest challenges are with data, number 1 is “collecting and analyzing it quickly enough.” Time to market is a critical success factor for many, right?
However we see the 2nd and 3rd biggest challenges reported rest squarely in the governance wheelhouse:
- A fragmented data environment (e.g., multiple definitions of the same thing in different systems)
- Poor data quality
When asked why carriers undertake data governance initiatives, the top 3 reasons are clearly strategic:
- Improve the decision-making
- Gain unique insights
- Improved management planning
We’d say these sound like important requirements, so …
Why is governance playing second fiddle?
The Celent report indicates that data governance is an emerging discipline. Rules of engagement are not yet mature for:
- who should be responsible,
- what the ownership model should be,
- which stakeholders are required to come to the table, and
- how much data can, or should be governed.
This begs for more time to resolve these issues. In this rapidly changing world, however, do we have the luxury of time?
The Celent report captures the conundrum well: “As the insurance industry moves into a more data-centric world, data governance becomes more critical for assuring the data is consistent, reliable, and usable for analysis.”
The risk is that the data themselves will lose credibility.
Who needs to do what to whom?
Without saying that the CIO is responsible for plowing this field, the report outlines four steps for that office to undertake, to drive consensus and move towards informal and formal governance protocols that will address the organizations priorities:
- Keep it realistic.
- Develop a cross-functional approach to data governance.
- Gain support by communicating the benefits of data governance.
- Prioritize the development of formal data governance initiatives.
What do you think?
We found this report (which has more detailed analysis than we are able to outline here) to be an important contribution to an important topic. But we’d like your thoughts.
- Is data taking precedence over governance in your world? If so, is this a bad thing?
- Have you any governance principles that work in your environment that you can share?
- What would help you in your role with data and their governance?
Don’t be chicken … share your thoughts.