Data Strategy
May 1, 2024
Can you put a price on data governance? It turns out, you can. In the case of Australian health insurer, Medibank, market capitalization dropped by a whopping $1.75 billion in 2022 after poor data governance & controls led to a well-documented hack. Medibank represents an extreme case of governance consequences, but the problem remains that most organizations are simply wasting time with inefficient data practices. According to Mckinsey, 30-36% of organizations spend a significant amount of time on non-value-adding tasks due to poor data quality or lack of data availability. This not only diverts employees from other (more valuable) tasks, but costs organizations countless dollars.
Governance is important to implement on data before it enters your organization, because once it does, you are the custodian for the data’s cleanliness, usability and compliance. The saying, “rubbish in = rubbish out”, still holds true. Additionally, the ever-expanding breadth of customer touch points and the difficulty in harnessing the data (in real-time) is increasing… A new channel = a new data source = a new data silo + a new or existing team to manage it. Your strategy needs to be flexible enough to account for new channels, ownership, and value to the existing customer and the data you have available.
When we think about governance, we can think of it through two lenses – data governance and organizational governance.
Organizational governance refers to the framework of rules, practices, and processes by which a company is directed and controlled. The framework ensures accountability, fairness, and transparency in its relationship with all stakeholders, including shareholders, management, employees, customers, and the community. Though this blog focuses primarily on data governance, our Org of the Future whitepaper explores our observations on the optimal organizational structure.
A well-governed foundation will best prepare organizations to build a long-term, sustainable data asset. We see many organizations accelerating results and working within the guidelines of privacy principles by adopting a Data Center of Excellence. This framework helps build expertise in an organization and ensures there are strict controls around the use of customer data. A new addition to these conversations are Privacy & Legal teams, which are becoming embedded into the center of excellence model. Because guess what? Data privacy is pretty important!
Data governance is the focus on ensuring the availability, quality, and security of data within an organization. The key to data governance is making sure data is secure, private, accurate, available and usable. Data is critical for business decision-making. If you want to truly understand your customers, you can use data-fueled insights to create more valuable experiences for customers. On the flip side, poor governance of customer data can cost your organization dearly, both in financial penalties & loss of trust (and therefore trade) from your customer base.
Data governance is a relevant conversation now more than ever due to the financial penalties for the incorrect use of customer data that are becoming commonplace. By the end of 2023, GDPR cumulative fines were almost $4.75 billion dollars. Additionally, a bad approach to data governance can lead to eroding customer trust, and increased customer churn. Data governance is a big deal, so let’s discuss the methods to support your organization’s approach to it.
It’s important to have a general understanding of the 5 priorities of data governance: usability, accuracy, availability, privacy, and security. Depending on your role within an organization you’ll gravitate towards one or more of these data governance priorities. For more details, we have a blog post that gets into all the details you’ll want to know. This is an important piece of the puzzle you won’t want to miss!
In today’s world, data privacy regulations are becoming commonplace, driven by consumer (and government) demand, economic factors, and a growing understanding of the dangers of playing fast and loose with customer data. Organizations will need to take an intentional approach to capturing, evaluating, managing, and activating data. So, how can help operationalize your data governance approach? Tealium’s Customer Data Hub provides organizations with the technology foundation that underpins their data governance strategy. Let’s look at a 3 step framework that helps simplify how a CDP supports your data governance efforts:
Before customer data is collected, organizations are typically required to gain the consent of the consumer to share their data… Meaning the consumer agrees there is enough perceived value to warrant them offering up their personal information. For example, if a real estate company asks for your borrowing budget so they only show you properties in your price range, the perceived value of the exchange is beneficial enough that you share your information. This ‘value exchange’ is crucial in taking your prospects and customers on a journey of personalization and relevance.
Consent Management Platforms (CMPs) – either bought ‘off the shelf’, or custom-built, enabling organizations to describe to individuals the various ways their data will be collected (using consent preferences) and used. Upfront collection is paramount but the enforcement of those preferences across all of the possible data destinations of that data (analytics, display, email, SMS, etc.), and its real-time orchestration can be a challenge. (We discuss this more in Step 3).
Now, start to identify the intent of this ‘trusted’ data because it informs the context of more engagement or analysis. For any business, the only way to scale & meet guiding governance principles is to standardize this data on its inbound journey. This allows for data from all sources to be used consistently & accurately, whilst transformation & encryption provide security & reinforce privacy. To meet the needs of this initial step, Tealium provides the capability to:
At this stage, customer data is well and truly within the organization so it’s imperative to not only abide by regulations (such as CCPA & GDPR) but to understand that your business does not ‘own’ customer data; you are the custodian of it. For example, if an individual can request the deletion of their data, your organization must respect that wish and comply.
The ability to store an auditable, historical log of the base-level event & customer data provides your organization with the capability to respond to data requests, report on that data & delete data when needed. All of these are key requirements under various data privacy regulations.
Tealium assists organizations in creating real-time customer intelligence and value whilst operating within privacy regulations:
To activate your customer data to multiple destinations in real-time starts means you’ll need to ensure only those downstream platforms consented to get access to customer data receive it. And doing this in real-time means that customer data is up to date, consented, and relevant!
Ok, so your consented, enriched, and real-time data is now available to leverage across customer experiences, digital advertising, business intelligence, and machine learning recommendation engines… Now what? Consumers interact with these experiences, interactions are captured, insights are gleaned, new experiences are created & the whole process begins again!
What is Tealium doing to support real-time, consented activation?
Welcome to managing the modern buyer’s journey built on data, trust, experiences & privacy! At Tealium we partner with organizations that put data & customers at the heart of their business. We help organizations like yours to create real-time experiences to amaze your customers; we now do this with a focus on intentional data governance and privacy as a foundation in this evolving world of privacy.
