In my decades of experience with data management and governance across large mature companies, I have realized that demonstrating consistent value from data governance investments has been challenging. Most business partners are aware of the data quality issues and, as a result, the value of data governance programs. However, a missing piece is the lack of a framework for business partners to articulate the value unlocked from data governance programs.

There have been concepts of economies of scale and scope in economics that companies have leveraged for years to reduce cost per unit as well as diversify their product portfolio. The three basic pillars of the framework, Economies of Scale, Economies of Scope, and Economies of Learning can also form a powerful way of demonstrating the value of data governance investments.

Economies of Scale:

Generally, economies of scale enable per-unit cost reduction. In the context of data governance, more and more business units on-boarded to a data governance platform over time resonate well and the new ways of working will lead to lowering the cost of searching for the right data. This can reduce reworking and improve productivity across the enterprise.

The line of business (LoB) data stewards will become specialized and very efficient in performing data governance activities increasing efficiency. In essence, similar to lowering the cost of manufacturing, lowering the cost of searching for the right data is a competitive advantage.

Economies of Scope:

In economies of scope, the average costs are reduced by introducing another product into a portfolio that can share some of the infrastructure or know-how, reducing the overall average cost per product.

In the context of data governance, building data lineage is an activity that will cost resources once but going forward, impact analysis will become easy reducing the average cost of both lineage and impact analysis services.

So, in essence, like lowering the average cost of each product, lowering the cost of multiple data governance capabilities becomes a competitive advantage.

Economies of Learning:

In economies of learning, a deep experiential learning curve leads to delivering a greater cumulative amount of the same product. In the context of data governance, communities of practice (CoP) from various lines of business (LOBs) sharing knowledge and learning gata governance practices together bring out new requirements and new governance activities.

In essence, like delivering a greater cumulative product, economies of learning enrich data governance platform features with new requirements to solve business challenges.

As a part of data governance, program metrics are a big part of tracking program success. The pictures below provide many metric ideas to capture data for this framework.

In conclusion, leveraging the framework of economies of scale and learning will start to get data stewards thinking about how to share their success stories via this framework. This is a simple yet powerful framework that provides a mechanism for business partners to understand and operationalize data governance in their business.

About the Author

Sarang Bapat is Director of Data Governance at Mitsubishi Electric Trane USA. A data management executive with expertise in information-based strategy and international management, Bapat has over 25 years of experience in technology and data in financial services, supply chain, and financial crimes domains.

Bapat has always enjoyed hybrid roles delivering Value Added Data Solutions to business stakeholders and has held senior management roles in companies like Wachovia, Wells Fargo, USAA, and Truist Financial.

He has strong executive experience in managing various data teams like data modeling, records management, and data management operations across multiple continents. Bapat was privileged to be part of customer advisory boards for Adobe-Workfront as well as the VIT School of Management in India. He has presented at data governance conferences and enjoys collaborating with other practitioners from the industry through web shows and podcasts.