Traditionally management of data has been ended up with organisations’ IT departments because they have been responsible for delivery.
Traditionally management of data has been ended up with organisations’ IT departments because they have been responsible for delivery. However, says Cadis Software director Stuart Plane, the involvement of business users is also vital to a governance structure that ensures the delivery of the right data to the right people at the right time.
If you ask a trader or a fund manager about data governance, you will most likely get a blank look and see them swiftly walk away, pretending they never heard you. This will probably always be the case, as the people that generate the profits within the majority of buy-side institutions are focused solely on doing exactly that – generating profits, not governing data.
When it comes to data, all they really care about is that the correct data is delivered at the correct time to the correct place. Furthermore, they will probably assume that complying with all the appropriate client mandates and regulatory bodies, as well as handling all the different instrument types, is a given.
Many people in the data space often lose focus on the reason for our existence – to deliver the right data, to the right people, at the right time. If you miss any one of these three elements there will be trouble. But does data governance really deliver these three elements? For most people the jury is out. Data governance will only matter when it achieves all the elements, and we are not quite there yet. Why is that?
Data and the IT department are always going to be dependant on each other. The transport and delivery element of data will continue to be handled by the IT department. However, the management of reference data is also still predominantly handled by the department, which is probably because it has always been responsible for delivery.
As a result, management functions tended to land in the IT department too. Currently within most organisations the IT staff are often the only ones who can actually see how data has been manipulated, where it has moved, and even who last touched it. Consequently, the true ‘data governor’ is in many cases the IT department.
The IT team are crucial players in all things data-related. However, when they are the only players involved with the data, organisations often struggle to create a strong data governance structure.
It has become standard best practice for most organisations to have a data management and governance function. However, so far it has proven difficult truly to empower business users to attain control and visualisation over the actual data flowing around the organisation.
These users are usually given exception reports, from which they can manually adjust the source and destination systems if they are able to. They are often sitting on the sidelines – watching the game, as opposed to being active players, or, as they should be, referees.
This is now starting to change. The products and tools available are becoming increasingly powerful and easy to use, enabling greater control and audit capabilities over all the data flowing through the organisation. Undoubtedly this is a step in the right direction.
However, this new-found power also presents a challenge because the skills set required for using these tools is often slightly more IT-focused than operations-focused. It is very similar to the challenge we saw in the late 1990s with the rise of the compliance engine. Coding compliance rules was not something most compliance departments had ever considered. They were typically more focused on activities such as the legalities of drawing up client mandates rather than coding.
When it comes to best practice data governance, without the business users being empowered truly to manage the data, organisations may have difficulty in creating a strong data governance structure.
We have seen the fastest implementations (typically in under three months) of a data governance infrastructure that has real power to influence the flow of the data in organisations that have created hybrid departments. This involves IT and business teams working closely together and acknowledging that each area has significant value to add.
Often, such organisations will have invested time in the initial implementation, by having both the business and IT teams sit in the same room for the duration of the project. These organisations are most commonly the best equipped to handle ever-evolving challenges, including new feeds, new security types and new regulations.
For data governance really to matter and become a core function within any organisation, it’s vital to deliver the right data to the right people at the right time. When this has been achieved we will see significantly more people and more firms focused on true data governance, and subsequently reaping its benefits.
