Data Governance - Scope

When it comes to data governance we generally focus on the definitions, organizational structures and policies. However, it's important to make sure that we understand our scope. Scope tells us what we're going to govern. It tells us the limits of our governance for any particular asset to be managed. Most importantly, it tells others when they should consider working with us and when they can expect to be on their own.

The most common data assets that are formally governed are Customer and Product - in that order. However, some other common data assets that are often under the scope of the data governance office include:

• Employees
• Vendors 
• Sites, Locations, Plants, Warehouses, etc...
• General Ledger

These data assets are generally considered master data in the true (non-ERP) sense of the word. They are Key Corporate Assets. There are many questions to ask in a formal Master Data Management initiative to determine if a data asset should be considered "master data." The set of questions is the same but the answer is going to be different for every organization. In fact, it could be different for the same organization over a long enough period of time (although that would be well outside the scope of my conversation). The simplest way to describe the summation of questions to determine if something is master data or not is to ask, "Is this entity a core part of my business?" Customers are definitely a core part of most any business. Furniture is less likely for most business. Properties might be for some and not for others. The second question to ask is, "What happens to my business if this data were to disappear tomorrow?" If your answer is, "My business would shut down," or "My business would be severely impacted," then you may very well be dealing with master data.

Some other data assets that often come under the scope of data governance include:

• Industry classes
• Quotes and Contracts
• Install base
• Market segments (if complex and hierarchical)
• Routes (in ERP)
• Warehouses
• etc...

These are examples of reference data. if that reference data is sufficiently important that it could cause an critical system such as your main ERP system to become severely corrupted, then governing that data is important. However, it should not be confused with Master Data. This is often referred to as Master Reference Data and, while important, it is not Master Data.

One other important type of key data is Conditional master data. This is data that, under the right set of circumstances, may be considered master data. Under another set, however, it might not. Another time you may want to classify data as Conditional Master Data is when dealing with data that changes frequently at first and then, over time becomes stable. This data would also have to be critically important to the organization's well being and/or be integral in the operational processing of key transactions such as sales orders and invoices. Contracts might be a good example of this type of Conditional Master Data. This data is critically important. These contracts probably represent the totality of your customer's financial obligations. If you rely on those contracts for enforcing payment, this is a critically important data asset. however, it changes much more than most master data assets when it's first being created. However, when completed and signed, they usually change very little over time.

In conclusion, the scope document is one of the most important documents the Data Governance Office can have. It tells us and others what we’re supposed to be working to improve. Without defined scope, communications, processes and buy-in will not be consistent across the organization. There will always be argument and debate over which assets should and which should not be governed. Departments and business units may “opt-out” making data quality inconsistent. Without defined scope, you may not be managing all of the data assets that the business considers critical to its mission. If you don’t know that, you can’t show management that you are delivering reliable consistent value; they will lose confidence in you and in the data you govern. Know your scope!