A typical ‘one-size-fits-all,’ command-and-control-based IT governance capability has neither the scope nor the agility to meet the needs of digital business. Responding to varying levels of uncertainty in today’s world requires speed and agility, and traditional approaches to data governance are becoming obsolete.
Traditional command-and-control-based IT governance is obsolete as it fails to meet the needs of digital business. Adaptive data governance allows organizations the flexibility to apply different governance approaches to specific business scenarios.
Unprecedented disruptions, such as the COVID-19 pandemic or political and economic conflict, expose enterprise fragility and demonstrate that being robust or resilient, while vital, is not enough.
Data and analytics governance specifies decision rights and accountability to ensure appropriate behavior as organizations seek to value, create, consume, and control their data, analytics and information assets. It’s critical to link data governance to overall business strategy and to anchor it to those data and analytics (D&A) assets that organizational stakeholders consider critical.
But whether D&A governance initiatives are IT-led or business-led, they are falling well short of expectations. In a Gartner D&A governance survey conducted in 2021, 61% of respondents said their governance objectives included optimization of data for business processes and productivity, but only 42% of that group believed that they were on track to meet that goal.
Adaptive governance enables flexible and nimble decision-making processes that help an organization respond quickly to opportunities, while continuously addressing investments, risk and value.
Gartner estimate that through 2025, 80% of organizations seeking to scale digital business will fail because they do not take a modern approach to data governance.
How to start adaptive governance
Before implementing an adaptive data governance strategy, four steps are required:
1. Define a clear set of adaptive data governance principles. For example: treating information assets in accordance with their value and sensitivity by partnering with business stakeholders and enterprise leaders. Align principles with your organization’s dynamics, culture and leadership style.
2. Establish accountability decision rights across organizational areas, such as business operations, data and technology teams, and analytics centers of excellence, and assign their role in achieving specific business outcomes.
3. Apply the right adaptive governance style to your business scenario, so that the correct levels of governance oversight and governance instruments are used to achieve your business outcomes.
4. Sustain adaptive governance by basing your governance operating model on it. Ensure that the impact of data and analytics governance decisions is understood across the organization.
Adaptive data governance includes multiple styles
Using adaptive governance or a multistyle approach means that business and IT leaders can use one or a combination of four governance styles to meet the demands of existing use cases, as well as the emerging requirements of digital business.
1. Control: When making decisions according to rules, policies, standards and directives, think master data management (MDM) or compliance with requirements such as GDPR.
2. Outcomes: When trying to achieve business outcomes while balancing risk, return and performance on investments.
3. Agility: When empowering roles and teams with authority to make distributed and/or mandated decisions that create value for their stakeholders.
4. Autonomous: When decisions are made in real time by people and “things.” In gas fracking, for example, prescriptive analytics uses real-time data to make governance decisions based on economic algorithms.
Moving to adaptive governance takes time
The shift from a single-style governance approach to adaptive governance cannot happen overnight. It requires planning and coordination with business stakeholders — both internal and external. Maturity is also key. Unless an organization is mature enough to undertake adaptive governance, they shouldn’t. To succeed, you will likely need to reassess your organization’s D&A strategy, employ careful design and testing, and invest in skills and competencies, such as operating your data governance in an open and transparent manner.
Saul Judah, VP Analyst at Gartner