Each year, businesses are generating more data than ever before, and this trend is set to continue into the future. Much of this data is essential for making informed decisions, improving operational efficiencies and reporting statutory requirements. It can be used for supporting finance function processes, identifying trends and updating stakeholders.
However, it can be difficult to manage without proper governance in place. It is essential to have a system in place to ensure that it is accurate, properly managed and monitored for compliance with regulations. Without this, organizations may struggle to compete with their competitors and face the risk of costly fines or penalties.
What is data governance?
Data governance is defined as the set of policies, procedures and processes that ensure the appropriate use of data within an organization. It is important because it helps to protect data integrity, security and accuracy. Without this governance in place, organizations are at risk of mismanagement or misuse of their data.
Data governance involves setting policies and procedures to ensure the accuracy, security, availability and timeliness of data. The person responsible for data governance will need to have a good understanding of the organisation’s data sources, how it is collected and stored. They will also work with teams across the business to help define appropriate measures for control and risk management.
The impact on finance functions
As data becomes more and more complex, data governance is becoming an increasingly important responsibility within finance functions. Many large companies have a dedicated Chief Data Officer (CDO) or a team responsible for ensuring data governance. Smaller companies may also benefit from these roles, but it is more likely that the responsibility will be delegated to someone within the finance function. These individuals must possess strong technology, data and analytical skills to ensure that they can deliver their role effectively. They will need to work closely with the wider company to ensure that data is captured throughout the business and flows efficiently between different departments.
Data governance also provides a way for finance departments to collaborate more effectively with other departments within the organization. By establishing data governance policies, it allows departments to easily share information and work together on projects. This ensures that all teams are working with the same set of facts, enabling them to make better decisions or reach conclusions faster.
With proper data governance in place, organizations are better equipped to manage their financial resources effectively and efficiently. It can help to improve accuracy in financial reports, reduce costs and enhance the overall performance of the organization. Data governance also ensures that all processes are compliant with regulatory requirements, minimizing the potential for costly fines or penalties.
Data governance is a critical component of any finance function and should be addressed as part of an organization’s overall strategy. Establishing a system of data governance can help to ensure that all financial data is accurate and secure, improve collaboration between departments, and reduce the risk of costly penalties or fines. By taking the time to implement proper data governance policies, organizations can better protect their financial resources and maximize organizational performance.
What could our next steps be?
This prediction may seem boring, but it’s critical. If you have less interest in this topic, then find someone in your team who is inspired and excited by data – these people do exist! Engage their initial interest in starting to think about what data governance is, why it matters, and how organizations can make progress from where they are currently. You can use this thinking to start building out your strategy.