How to craft the ultimate business case for data governance - Part 2

Silencing the skeptics with fast, powerful impact metrics

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Oct 31, 2024

As a data leader, you’ve probably faced the challenge of keeping stakeholders on board with a data governance project. It’s not just about getting their initial support — it’s about proving value quickly when results take time. How do you show impact fast when everyone’s looking for wins?

That’s where this series, all about how to sell data governance to stakeholders, comes in. My co-author Austin Kronz and I have created a toolkit to help you advocate for the resources you need to make your governance initiative a success.

In Part 1, we explored how to highlight the risks of ignoring data governance for different types of stakeholders. Now, in Part 2, we’ll focus on how to demonstrate the different types of data governance value once you have your governance initiative up and running.

Missed the first part of this series? Go back and read it here!

📊 Metrics to show the impact of governance

There are lots of different ways that governance can help an organization — make data teams’ lives easier and more efficient, improve processes across the company, and even directly increase revenue or reduce risk.

Different stakeholders care about different types of impact, so it’s good to track a range of metrics about your data governance efforts. That way you won’t get caught off guard when someone asks how the new governance initiative is going.

A good way to think of measuring data governance impact is from the lens of progress and value. There are many different metrics that can help you when building a great business case for governance. Check out the examples below, and keep in mind you'll need to have both progress and value metrics covered, but you might not need to share every bit of information, every step of the way, with every stakeholder.

Progress — show me how we’re doing with governance

Improving the user experience

Any great initiative starts with the right baseline. Capturing the sentiment and experiences of the people who deal with data governance inside of your organization day to day is crucial. How do your data stakeholders feel about your new data governance project? Showing user love and saved time/effort is a great way to quickly demonstrate wins.

A good place to start is data from simple pulse surveys:

Are you able to find the data you’re looking for when a new business question arises? (1-10 scale)
How much time do you spend per day/week on task XYZ?
How has your time spent on XYZ changed since we made ABC changes?
How satisfied are you with the response time of the data team? (1-10 scale)

You can also directly utilize usage and system metrics from your data stack or IT services software:

Percentage of data assets that are certified, documented, and trusted by teams
Percentage of company data that is accessible for analysis
Percentage of automated governance tasks (e.g. data classification).
Number of data issues identified by business users
Monthly active users (MAU) of the data platforms (e.g., data catalog, BI tools, etc)

Streamlining internal operations

Getting more practical – data governance can dramatically improve the quality and accessibility of data, which affects every team, project, and vertical that works with data. Show this off with a range of metrics around business operations.

Use a more focused survey to capture specific data points about the day in the life of a producer and consumer:

What percentage of your time is spent on the following? Discovering data, accessing data, preparing data, building dashboards, etc.
Time spent on manual governance tasks, such as root cause analysis or compliance checks
How would you attempt to resolve an issue with data or insights today?
On average, how many questions/requests/issues do you file each week?

Other operational efficiency metrics you should track:

Usage of existing data assets across domains
Number of tickets submitted per month
Average time to complete data projects
Average time to ship new queries/dashboards/models
Average number of story points or projects shipped per month

Value — show me the money!

This next step is all about investigating the numbers that matter most to your company — cost, revenue, risk, etc. Going beyond progress metrics to show tangible impact is one of the best ways to solidify your business case for governance.

Cost is usually the first target. Start with any of the internal operations metrics from the previous section and apply dollar amounts to them — this shows the value of improving those metrics. You can use this process to calculate the cost savings from a new tool, dollar value of fines or audits mitigated by a new process, money saved on a new cloud contract by optimizing services, and so on.

Let’s walk through an example: “What percentage of your time is spent discovering data?”

Establish a baseline metric: We used to spend 5 hours per week, on average, on discovering data.

Compute the prior cost: We have 100 analysts, so we spent 500 hours per week just finding the right data. At an average salary of $50 per hour per analyst, data discovery was costing us $25,000 per week.
Update the metric: After 1 quarter of improving data governance, analysts now only spend 2 hours per week, on average, discovering data.
Calculate the new cost: We are saving 300 hours per week across all of our 100 analysts. This equates to a savings of $15,000 per week, or an annualized savings of around $780,000.

Some data leaders tend to stop at reporting like “Data discovery effort decreased from 5 to 2 hours per week”. However, it’s important to use this information to claim your piece of the pie! If customer retention is worth $50 million to your company, and your governance initiative helped your company exceed retention goals, then make that known to stakeholders.

Estimated time savings may be helpful, but sometimes it gives relatively small-scale dollar amounts that don’t pack the punch you need. This is where the next strategy comes into play, showing the role of governance in making better business decisions.

This is perhaps one of the biggest “sells” you can make — if you can prove that governance drives business value, your initiative is secure. Lean into ongoing key business priorities and connect your proposed investment to the impacts associated with achieving these business goals. Strong business alignment, supporting data, and great storytelling are key here.

A great way to link data work to business goals is to ensure that any data requests have an associated business objective. For example, requests for data or insights can be tagged with goals like identifying risk, reducing customer churn, identifying new customer segments, A/B testing new product features, or recommending cross-sell/up-sell opportunities. You can then sum up the work done across projects for the same business objective to show its value.

🤔 How to uplevel your conversations so business value is always top of mind

As you start a governance project, people within your organization will likely have never-ending ideas and suggestions for new features, changes, or priorities. While it can be a lot to handle, these requests are a great way to get people to think about the value of governance.

Try out this simple exercise in your next conversation with your stakeholder(s). For any suggestion you get, ask people to write down the details of what they want to do. Then ask them “why”, and get them to write down that answer as well. Repeat this a few more times — in most cases, three whys should get people to the core principle of what it is they want to do what they want to do.

Here’s an example:

Suggestion: Our governance program should include a data catalog.
Why? We need to have a complete picture of what data is out there. We want end users to be able to self-serve from a single source of truth, and we want our data teams to be more efficient when faced with a new request.
Why? Sales analysts need to quickly find trusted data for their analyses, metrics, or dashboards that business stakeholders rely on. For example, they need to know where deals are in the sales funnel and how many total deals there are for the Customer 360 dashboard.
Why? Our company is seeking to double revenue over the next year. To do this, we need a 360-degree view of our customers to drive the rollout of our new online sales channel.

Notice how this quickly forces someone to look beyond their immediate team, link daily tasks to stakeholder needs, and explain the role of governance in broader company goals. This is a great way to create an effective story about what governance really does at your organization, whether it’s through prompting others or helping you clarify your own thoughts.

📚 More from my reading list

The future of lineage by Julien Le Dem
Quality vs quantity with data requests by Madison Mae
KPIs done wrong: fixing common reporting mistakes by Olga Berezovsky
The rise of the declarative data stack by Simon Späti
How to run data science projects by Dzidas Martinaitis
Good questions bad questions by Ergest Xheblati
You don’t have a “data problem” by Barbara Galiza
The curse of Conway and the data space by Jack Vanlightly
No learning without randomness by Christoph Molnar

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