advertisement
Personal Finance

Why data governance is key to restarting growth

data governance
Many businesses still do not have a data governance mechanism. FILE PHOTO | NMG 

World over, business executives are grappling with the onerous task of leading their organisations towards “Recovery, restoration and reopening” as summarised by Dr Lloyd Minor, Dean of Stanford University School of Medicine during an interview with MSNBC’s Brian Williams. In an April 2020 McKinsey & Company publication, “Restart”, the authors concluded that “The end of the lockdown will not spell a return to the old “normal”, nor will it be universal”.

The detailed 12-page piece sought to advise CEOs on how to relaunch economic activities in their organisations successfully as countries slowly reopen post the Covid-19 induced lockdowns. The authors called upon “executives to speed up their digitisation plans”.

Of course the speeding up comes with limitations, among them data privacy and security. I am also reminded of a 2015 EY Tax Insights (Issue 14) article that predicted, “All Companies are becoming tech companies.” Amazon, which started as an online bookstore is now in many other businesses among them that of lending money through Amazon Lending something that has long been done by the brick-and-mortar banks.

Back home Jumia is partnering with Vivo Energy where online shoppers are able to collect their orders from Shell Petrol stations. The bump in technology backed innovative solutions has been on the rise during the lockdown period especially in the ecommerce and healthcare sectors. In the UK, 100 percent of doctor-patient consultations were done over the phone and out of those only seven percent resulted in patients going to hospitals at the height of the Covid-19 pandemic.

Telkom, a telecommunications company here in Kenya, recently launched a telehealth solution vide a program dubbed, “Dial Daktari”, for its customers who will be able to access subsidised medical consultations in partnership with Valentis Health.

advertisement

The rise in non-technology companies becoming technology companies has been made possible by the availability of data but close to it is trust, as Juan Jiménez Zaballos, Head of Financial Industry Transformation, Santander Digital Platforms stated in a 2020 Finastra publication. He went on to note that customers require absolute confidence that their assets are safe.

The 2020 Deloitte Global Marketing Trends Report demonstrated to us that for businesses to gain trust from their customers in the digital age they need to think of and start “Building a structure that systematically builds trust by protecting customer data from both external cyber threats and unethical internal data misuse”.

The report resulted from a 2019 poll of 4000 global consumers with the aim of showing how critical trust is to consumers. Fifty-three percent of the consumers said they would never use a company’s product if found to have sold their data. To build this trust, customers not only need to know that their data is safe but also feel that it is being used for the right purposes. Organisations must therefore have proper data protection mechanisms through a well -thought -out data governance structure. They are leveraging on data to stay afloat and ahead. This has been achievable thanks to the deliberate steps by the organisations to have proper data governance mechanisms. The Data Governance Institute defines data governance in a nutshell as the exercise of decision-making and authority for data-related matters.

These decisions involve people and processes in an organisation. It ensures that important data assets are managed appropriately. Key principles of data governance are transparency and accountability and both are at the heart of the trust that consumers yearn for.

Apart from building trust with your organisation, data governance will help it automatically comply with most aspects of the Data Protection Act 2019 and the EU General Data Protection Regulation, GDPR. A core principle such as data minimisation will be met if at the onset of collecting any personal data, controllers are aware that they are only required to collect data that is adequate, relevant and limited to what is necessary in relation to the purpose for which it is processed. The mechanism will stop the habit of businesses collecting “just in case” data.

It will also avail an opportunity to businesses whose core activities require systemic and regular monitoring of data subjects to designate the role of the data protection officer as provided for under section 24 of the Data Protection Act.

Adobe’s 2020 Digital Trends Report that surveyed more than 75,000 senior executives in marketing, advertising, ecommerce, creative & technology, observed that most businesses in the study were encumbered “by outdated workflows and internal barriers to communication and collaboration”.

Many businesses still do not have a data governance mechanism. They are operating without being alive to the reality that we are in a digital age, them incorporating some form of technology in their operations notwithstanding.

Some of these businesses argue that, “we are fine without a data governance mechanism and after all, we are still profitable”.

The Adobe report calls for a “cultural transformation” in businesses and that consumer data management “defines our future”. The report notes that leading companies are working on a new marketing dynamic that calls for them to “lean into privacy, demonstrate transparency and continue to build trust with consumers”.

With the Data Protection Act 2019 in place and the continued consumer awareness on their rights, businesses urgently require a form of data governance mechanism before it is too late and expensive. Consumers will be keen to know how their personal data is being stored and used. When consumers have trust in an organisation and know that their assets, in this case, data, is safe, they are willing to stick and grow with it.

Embracing the new normal or returning to the new normal will only favour the resilient. An April 2020 McKinsey global survey on consumer sentiments during the coronavirus crisis showed that they were willing to reduce their discretionary spending in the coming weeks.

In France, during the survey, 44 percent of the consumers indicated that they were planning to reduce their discretionary spending. In China, 50 percent of scheduled purchases were cancelled. This shows how tough it is going to be if the Covid-19 pandemic persists and even after.

A proper data governance mechanism will help an organisation easily convert to a technology one and will be able to help it utilise its data assets legally and morally.

In the long run, there will be a number of benefits to the businesses that embrace data governance. They will make savings, have both efficiency and effectiveness. With the inaugural Office of the Data Protection Commissioner currently being set up, there is no better time to have a data governance mechanism in place.

The writer is Data Protection Compliance & Commercial Law Practitioner.

advertisement