The True Cost of Building a Data Governance Consulting Team
With the amount of data being created by organizations like never before, the ability to manage, secure, and trust this data is now a top business imperative.
This is why many businesses are turning to data governance consulting services to develop effective governance structures and avoid costly implementation mistakes.
The problem, however, is that many businesses are unaware of the true cost of implementing effective data governance solutions, whether it is staff, technology, process, or change management costs.
What Does a Data Governance Consulting Team Do?
A data governance consulting team is used by organizations to create structured processes that can be used to manage the data as an asset. This is different from the usual approach that focuses on the infrastructure and the technical aspects.
The data governance consulting team works with the organizations and the stakeholders to create governance structures that can be used to manage the data and align it with the objectives and the goals of the organizations.
Some of the common objectives that can be achieved by the data governance consulting team include:
Designing governance structures and policies that can be used to manage the data within the organizations
Improving the quality and the reliability of the data
Compliance with the data privacy regulations, such as the GDPR
However, without the governance structures, the organizations can struggle with the initiatives because of the lack of definitions and the reliability of the data.
Key Roles in a Data Governance Consulting Team
Data Governance Manager
Data governance managers are tasked with the operationalization of data governance frameworks, policies, and governance committees.
Data Architects
Data architects lay the foundation for the technical infrastructure that is required to support governance initiatives.
Compliance and Security Specialists
Compliance is one of the biggest reasons that governance is being implemented. Security specialists and compliance specialists ensure that the governance process is aligned with privacy regulations and security policies.
These individuals represent a multidisciplinary set that is required to handle the strategic and operational aspects of governance initiatives.
Salary and Talent Costs
One of the biggest parts of the cost of governance implementation is the cost of acquiring the right talent. Data professionals with expertise in governance, regulation, and data architecture are in huge demand.
Based on the data provided by Glassdoor and other sources, it is safe to conclude that professionals with expertise in governance can draw huge salaries, especially in key markets across the world. Chief Data Officers in big organizations can draw six-figure salaries annually, and governance managers and data architects can be significant investments.
The lack of such talents has also made it difficult for organizations to hire the right talent to form an internal governance team. In such cases, organizations can turn to data governance consulting service providers to gain the benefits of the expertise offered by such service providers.
Organizations that work with the right engineering partners, such as N-iX, can gain the benefits offered by the expertise and knowledge of the best data teams.
Technology and Infrastructure Costs
While talent is a costly endeavor, governance initiatives also need to be supported by solid technology platforms to monitor data quality and data lineage and implement governance rules in data environments.
Typically, any governance environment will have several different platforms.
Data Catalog Systems
Data catalog systems assist organizations in the creation of a centralized catalog of data from various systems. This includes metadata management, search functionality, and ownership management.
Data Quality Platforms
Automated data quality tools assist in the monitoring and management of data for any inconsistencies and errors. This helps organizations maintain high-quality data.
Metadata and Lineage Management
Metadata management systems assist in the management and monitoring of the flow of data through various systems. This is vital in ensuring compliance and troubleshooting.
The cost of technology depends on the size and complexity of the company's infrastructure. Most technology systems in large companies are subscription-based, and this creates an operational cost.
Operational Costs Beyond Salaries
Aside from talent and technology, operational costs associated with various initiatives in governance include several aspects that need to be considered by the organization. Operational aspects in governance include continuous interaction among departments within the organization, training programs, and internal communication strategies.
For instance, all departments within an organization need to be aware of data policies in governance and their roles in maintaining data quality. Therefore, training programs need to be conducted within the organization.
Additionally, operational aspects in governance include forming a committee or a body in charge of outlining how data policies within the organization will be implemented. In this case, representatives from different departments within the organization need to be appointed.
Some operational aspects of governance include internal audits, documentation strategies, and reviewing policies within the organization. In this case, a data governance consultant can be very instrumental in managing operational aspects of governance within an organization.
In-House vs. Consulting Team: Cost Comparison
Typically, organizations looking to implement a governance program will consider two main routes:
One route is building an internal team to handle the governance initiatives. The advantage of this route is control and internal expertise. However, recruiting internal team members who are experts in governance can take months and requires a substantial financial outlay.
The other route is working with external consulting firms. This route has the advantage of speed and eliminates the risk associated with recruiting the right internal team members. Consulting firms bring best practices and tools, and are knowledgeable in the industry and the specific needs and pitfalls to avoid in building effective governance programs.
Many organizations end up going the route of a hybrid model, where they use internal team members and external consulting firms. Engineering companies like N-iX are often involved in working with organizations in designing effective governance programs while working closely with internal data teams.
How Companies Optimize Data Governance Costs
There are a variety of approaches that can be taken to ensure that governance investments are optimized, such as:
Implementing pilot governance projects to test frameworks and tools
Focusing on critical data sets that are most closely aligned with key business decisions
Blending internal leadership with external consulting expertise
By using incremental governance approaches, businesses can prove their success and gradually expand their governance efforts throughout the organization.
Conclusion
Data governance consulting teams, from chief data officers to data experts who are responsible for data stewardship and architecture, are a costly investment, but the price of poor data governance could be much more costly.
A study done by IBM revealed that the US economy loses over $3 trillion annually due to poor data quality, highlighting the financial risks associated with poor data governance.
For organizations seeking to create a solid foundation of analytics, regulatory compliance, and AI innovation, investing in a solid data governance team is no longer a choice but a necessity, as proper planning, technology, and partners can turn data governance into a force to be reckoned with as a competitive advantage.
