Data breaches make the headlines on a regular basis nowadays. Though the figure will vary by country and industry, Digital Guardian places the average cost of a data breach at $3.9 million. It follows that data security is a growing public concern and a financial drain on breached organizations.
Companies are therefore revising privacy policies to appease customer concerns. Organizations are investing heavily in cybersecurity measures to prevent data breaches. Plus, regulations on data privacy and security have been introduced in various domestic and foreign jurisdictions, requiring companies to comply with such regulations or face significant fines and litigation. Growing public awareness and concern along with business interests in regulated markets are necessitating data governance regulations.
Analytics professionals must develop an in-depth understanding of data governance. Accordingly, the Master of Business Administration (MBA) with a Business Analytics specialization online degree program from Southern Illinois University Edwardsville (SIUE) is designed to provide students with the knowledge and skills necessary to effectively design and manage an organization’s data-governance structure.
How Is Data Governance Defined?
“Data governance is a collection of practices and processes which help to ensure the formal management of data assets within an organization,” says Dataversity.
It represents the entire framework or foundation upon which all data management protocols and procedures are built, including policies and processes surrounding data stewardship, data quality, data integrity, compliance, and the roles and responsibilities for those making decisions regarding data assets.
Data governance may be designed and implemented internally by data management personnel in conjunction with other top level management and organizational stakeholders. There are also many external companies now offering assistance, consulting, and design and management services.
What Are the Benefits of Good Data Governance for Modern Business?
Implementing well-designed data governance can protect a company against cybersecurity threats, build customer trust and loyalty, and ensure compliance with changing regulations. All of these factors help increase profit margins in target markets. Moreover, the proper management and effective application of data assets and analytics can inform strategic decision-making across functions, further improving a company’s profit potential.
Information and big data are increasingly treated as a form of monetizable currency and are among the most important of an organization’s resources. Thus, optimizing resource management involves implementing effective data governance structures.
What Are the Dangers of Poor Data Governance?
The lack of data governance can impact a business on a broad scope. Lack of strong cybersecurity protocol can increase the risk of data breaches and result in a loss of customer trust and loyalty. Inefficient or ineffective data management procedures on the operational side can lower a company’s competitive advantage and profit building.
Data privacy policies without transparency can result in customer dissatisfaction and market share losses. In addition, data governance that lacks procedures for constant, iterative revision to meet and comply with ever-changing and varying regulations worldwide puts an organization at risk of litigation and steep fines.
What Is the State of Law and Regulation Concerning Data Privacy?
Regulation of data privacy in the United States lags behind that of many other countries. U.S. regulations take a sectoral approach, with various laws and legislative acts protecting certain types of data within specified industries or population subgroups. In general, data governance in the U.S. has been left for private sector organizations to set as they choose, creating variable, market-driven privacy policies. The increased scrutiny of large tech companies by the public and legislators alike is forcing the development of data privacy regulations and their enactment.
Specifically, the California Consumer Privacy Act (CCPA) went into effect in January 2020. It includes data privacy regulations aimed at mid- to large-sized companies which deal in the consumer data of California residents. This affects companies that gather, analyze and sell data and analytics services as well as those that purchase and make use of data and data services.
Under protection of the CCPA, individuals have a number or rights: They can give or withhold consent for use of personal data by a business and demand cessation of data use or deletion of data. The CCPA also mandates that much of a company’s services offered to an individual are not contingent upon consent to data sale and disclosure.
The European Union’s General Data Protection Regulation (GDPR) went into effect in May 2018. The GDPR is a comprehensive reform of data privacy laws. Importantly, it is international in scope, meaning that companies in other countries are held accountable and subject to potential fines up to 20 million euros or 4% of a company’s annual global revenue, whichever is greater.
The GDPR paved the way for a number of other countries to follow suit and create similar laws. It presents major ramifications for any American business that deals with data of foreign citizens in the regulated countries. American companies large and small are rushing to ensure their data privacy policies and data governance procedures are in compliance with international and domestic privacy laws.
Although such regulations may limit the potential gains from dealing in data, they can help businesses avoid the dangers of poor data governance. Maintaining current knowledge of best practices in data governance and privacy laws is essential to a successful career for data management and analytics professionals.
Learn more about SIUE’s online MBA program with a Business Analytics Specialization.