As the world awakes to more news each day about COVID-19, businesses are focused on sustaining operations and remaining profitable throughout this, and other, periods of unrest. While the main focus for companies is simply existing, it could also be a valuable time to consider new markets and new risk management strategies. Considering a decade of digital disruption and the unrelenting growth which is expected to continue for the next decade ‚Äì digitisation may play some small part in protecting your organisation from the current volatile business environment.
The increasing digitisation of companies has been coined industry 4.0, or the fourth industrial revolution. It covers the digitisation and integration of processes, procedures and supply chains, of products and services, digital business models and customer access. But Industry 4.0 is not without its challenges which include the rate of change, the constant demand for innovation, the impact on culture, and the need to increase the digital skills of employees. It’s understandable that priorities might be constantly shifting, resulting in a less than effective allocation of resources throughout the organisation.
At the heart of this new industrial revolution is data. Data and analytics are the core capabilities that organisations will need to harness if they’ve not already begun to do so. As the OECD reports in Data in the Digital Age, data will be a critical resource in the digital economy with its interaction with algorithms, big data, data analytics, and the connectedness of things and people. Data, and the sheer volume of data capable of being produced, provides boundless opportunities for creating and improving products and services.
For data to be a valuable resource, it’s necessary to implement a company-wide approach to its management. This includes its collection, use, availability, access, security, storage and value. At the most fundamental level, an organisation and its people need to trust in their data. Identifying the role of trusted data within an organisation, the role it could play and the way it’s governed will provide a solid foundation for handling the demands of Industry 4.0.
There is a lot of conjecture as to whether the oversight of data rests within the ambit of the IT Department or that of the CFO. While IT might be responsible for the day-to-day management of data, creating the governance processes around the data may be better placed within the realm of the CFO. If the CFO is tasked with ensuring that the assets of the organisation are delivering long-term economic benefit then monitoring the integrity of the data and ensuring it maintains value would be well placed under the jurisdiction of the CFO. In the next decade, data will be as common and crucial to a company as it’s tangible assets and similar steps will need to be taken to ensure that it is protected and used efficiently within the organisation.
‚ÄòData Governance’ is one way the CFO can obtain oversight. Within a data governance framework, the data’s capabilities and potential would be documented, monitored, adequately resourced and audited. While no means an exhaustive list, the framework could include the management of:
- The quality and integrity of the data being collected
- The skills required by employees both now and in the future to work with data
- The ability for the data to be efficiently shared across business divisions
- The use of data to identify changes in customer needs or demands and to determine new services/products
- The security, back-up, recovery and storage of data
- That the use of data complies with various legislation
- The value of the data to the organisation
- The ways that the organisation can take advantage of ‚Äòopen government data’ initiatives
- The ownership of data, including rights to access
- The ethical use of data
- The monitoring of cross border transactions to ensure regulatory compliance with different jurisdictions
- The alignment of data use with the organisation’s strategic goals
These are only a few of the myriad issues concerning data integrity, capability and protection. The essence of all good data governance is trust and ensuring that the organisation takes advantage of the resulting opportunities. With each organisation having different demands and approaches to handling and dealing with data, a rigorous governance framework will prepare a company for Industry 4.0 ‚Äì the challenges and the opportunities. So, what’s the ‚Äòsomething’ about data ‚Äì it starts with the governance!