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Software // Enterprise Applications
05:05 PM
Tony Kontzer
Tony Kontzer

A Better Way To Manage Customer Data

Messy, redundant, and insecure customer data has companies turning to data governance for a change.

The handling of customer data is one of the thorniest business issues of the 21st century. If companies aren't struggling to determine which versions of their customer records are accurate and up to date, they're scrambling to do damage control in the wake of security breaches that expose sensitive information to prying eyes.

And while there are countless software products designed to aid in tackling those issues, it may be the emerging business practice known as data governance that holds the most potential for companies to get a handle on their fast-growing pools of information.

Data governance is an idea that's gaining momentum among IT and security executives who are proclaiming that enough is enough. And with good reason: Companies estimate they're losing 6% of sales because of poor management of customer data, according to a recent survey conducted by data broker Experian's QAS division for data quality management.

At its most basic, data governance is a programmatic approach to managing information across an organization. It involves a formal set of business processes and policies designed to ensure that data is handled in a prescribed fashion, with any human intervention handled by trained data stewards. It's the opposite of what most companies have been doing until now, a more application-specific approach that only meets project-specific needs.

"You usually start data governance because there's a big problem," says Robert Garigue, VP of information integrity at Bell Canada. "If you don't have the right controls, you're going to have a business disaster when it spills out into the public." Just ask any of the dozens of companies that have been bitten by publicly disclosed customer data breaches over the past year. No wonder Garigue refers to customer data as potentially "toxic content."

Awash In Data, bar chartGarigue, who left his post as chief information security officer at Bank of Montreal to join Bell Canada earlier this year, is one of a handful of IT execs at the forefront of the data governance push. He got into this effort in 2004, when he entered into an ongoing dialogue with Bank of Montreal's chief privacy officer, senior VP of corporate resources, and others about the need to take a hard look at data management and security. The problem came to light, he says, when the company deduced that poor data was making it difficult to undertake application integration projects. Customer information was stored in 10 to 15 apps--each with its own distinct, often conflicting, data sets. There was no way to know which system had the most authoritative customer record, so integration efforts stalled.

Power In Numbers
All this led Garigue to become one of the early participants in a data governance council IBM formed in 2004. Chaired by Steve Adler, IBM's program director for data governance solutions, the council consists of about 50 IT and security execs from IBM customers. They gather quarterly to discuss data management challenges and share best practices. Garigue continues to participate in the council on behalf of Bell Canada, where he's spending his first months pushing the debate about data governance throughout the company.

Based on conversations with his peers, Garigue says IT execs have a growing awareness that the information management software they've been using is only as effective as the processes, policies, and people they support. "A lot of organizations are realizing they need to do something, but they're not exactly sure what that is," he says. "Technology is going to be an element of the solution, but you have to have a governance program around it."

As companies grapple with their first efforts at data governance, help from vendors is limited. Most of the big software vendors haven't established clear strategies for customer data governance and have focused instead on developing master data management tools designed for all types of corporate information, AMR Research analyst Rob Bois says.

Oracle may be headed in the right direction thanks to its acquisition of Siebel Systems, but it hasn't established a time line for converging its Customer Data Hub with Siebel's Universal Customer Master product, both of which could act as clearinghouses for definitive customer records.

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