With data growing exponentially in volume and technology continuously evolving, organizations are now finding themselves inundated with an overwhelming amount of information to manage. Without an effective data management solution in place, this situation often leads to countless hours spent trying to reconcile pervasive poor-quality data, inaccurate reporting and lack of compliance for many organizations. Business leaders are now recognizing just how significant the issue of data can be for a business’s operations. As a result, the global data visualization market size is projected to more than double over the next six years.
In today’s digital world, the issue of data lineage and the broader implications of its role within the enterprise are quickly becoming critical issues. Understanding and tracing the flow of a single set of information from its source, through potentially numerous processing points within a company’s structure enables businesses to evidence control and understand that data. Without clear visibility into the lifecycle or journey of said data, it’s impossible to guarantee if any resulting insights will be accurate.
While effective lineage can yield significant operational benefits, its application is much easier said than done. It’s now imperative that businesses overcome these hurdles and effectively integrate processes that can map and harness a highly complex set of data flows within a business into their IT strategies before they drown in information. But what makes lineage so hard to handle, and how can organizations leverage it for significant and long-lasting business benefits?
Moving on from laborious lineage
In a recent CDO Trends roundtable, participants noted that despite lineage becoming an important discussion point, multiple businesses in a range of sectors faced practical difficulties in cracking its complexities - especially in larger organizations. This challenge frequently stems from having multiple systems and a myriad of legacy technologies, all with varying data entry points. This complexity makes it extremely difficult to understand the data which may not even be expressed in similar ways across these systems, can be time-consuming to analyze, and therefore is also a costly endeavor.
Adding to the lineage burden, a recent study into the evolving role of CDOs within the financial industry highlighted that part of the problem is that many companies still risk attempting their data aggregation manually. In fact, some 54 percent of business leaders revealed that at least half of compliance functions are still performed manually within their organizations. All too often, results are stored in spreadsheets of considerable complexity. These are frequently manually updated and difficult to maintain and, consequently, soon become out-of-date and unreliable. This is where the new breed of RegTech platforms can come in. To regain control of their data estates, organizations need to adopt an over-arching and holistic strategy using a data management tool that has the ability to ingest data easily across a variety of different systems. By providing a comprehensive understanding of data flows across the entire organization, data citizens in all departments and roles can therefore make accurate and timely decisions.
With an effective lineage management tool, teams can automate and track the movement of information through an organization using a one-easy-to-understand map. At a glance, it becomes easy to see where compliance and regulatory errors may be lurking and fix them accordingly. It can also allow businesses to test and adjust models for new changes both internally and to account for external factors, such as changing legislation – without live training in the real business first. The modeling aspect of tools like Solidatus makes it easy to test new processes and check that solutions are solid. Since data flows, changes and processes are carefully and visually mapped out and easy to follow, fixing any issues or reversing a wrong turn becomes a lot more straightforward.
Cracking the lineage issue is also essential for traceability and compliance. Increasing regulatory oversight in all areas of the business means that organizations face ever-growing demands to provide data demonstrating compliance. When it comes to regulators, businesses must be seen as being proactive rather than reactive to regulatory requirements. Yet, staying on top of regulation is no easy task. According to a Thomson Reuters report, there were over 56,000 new updates from regulatory bodies in 2019 alone – that’s a staggering rate of 217 per day. This, combined with strict timelines set by regulators, has resulted in many companies having to invest heavily in tactical fixes to avoid hefty fines and aggressive consent orders. Regulators now stress the importance of accurate compliance reporting and highlight how data lineage is necessary for promoting transparency.
Lineage as a long-term commitment for tangible business benefits
Think of data management and data lineage as the foundations of a house. Solid foundations are critical to be in place first, before additional structures can be built on top. While these processes are now being grafted into existing business infrastructures, the foundational nature of getting to grips with data management has become just as critical to understand and get right. Without good data management practices and an accurate understanding of the data that sits within your organization – you are essentially running that business on potentially shaky ground. Once implemented effectively, it will provide the operational certainty needed to future-proof the organization’s entire digital framework, while staying on top of increasing volumes of data input and a constantly changing legislative landscape. As such, it is vital for businesses to recognize data lineage as a long-term commitment and make it part of the company’s DNA. From unlocking new business opportunities, to better-informed decisions based on quality data, to faster time to market, right the way through to a competitive advantage – data lineage’s business benefits are two-fold.
A fundamental rethink
Data is utterly fundamental to business success, and understanding it is vital to gain true value from it. Yet, according to a NewVantage Partner’s survey, 53 percent of organizations admit that they do not yet treat data as a business asset. Whatever the reasons for the failure to achieve transformational results from data initiatives, the amount of data will only continue to rapidly grow. Unless business leaders get a handle on their internal lineage systems and processes, they will soon drown in information, not to mention the risk of huge financial damage from legislative fines. Optimized data architecture is now a key differentiator between a successful enterprise and a failed one, and it’s those that have a deep understanding of their data and its impact who will be the ones to thrive.
Philip Dutton, Co-CEO & Co-Founder, Solidatus