The Mission-Critical Impact of Data Governance on Your Corporate Assets

In the mid-1990s, NASA began a series of ambitious missions to explore Earth’s close interstellar neighbor, Mars. On Dec. 11, 1998, the space agency launched the $193 million research spacecraft the Mars Climate Orbiter—the first interplanetary weather satellite and a vital component of the years-long Martian exploration program involving thousands of man hours.

But less than a year later, on Sept. 23, 1999, the Mars Climate Orbiter came to a premature and mysterious demise. It either disintegrated after a too-low entry into the Martian atmosphere, smashing into the surface of the Red Planet, or it spun off on an unknown trajectory.

Months of investigation pointed to an incredibly simple, and almost unbelievable, reason for the mishap. Engineers had designed the orbiter using English units of measurement while the flight-management team used the more conventional metric system for a key spacecraft operation. The mismatch of units in navigation information led to the craft’s fatal demise.

Simple data, dreadful error.

The loss of the Mars Climate Orbiter presents a strong case for data governance, illustrating the mission-critical nature of systems information. Data uncontrolled and unexamined—ungoverned—can lead to business tribulations ranging from elevated costs to disastrous business failure.

Data governance is key when a company begins to regard its information as a corporate asset. It involves the people and methods required to create a consistent, composite, holistic view of an organization’s accumulated and dynamic information. To govern effectively, organizations are challenged to balance protection with production, essentially weighing effective information access against appropriate data use, across diverse organizations in various geographies. This requires active coordination of complex and interrelated skills, domains and structures.

As guardians, manipulators, evaluators and analyzers of an organization’s data, IT professionals and the companies they serve rely on data governance for three important, yet simple reasons:

1. To reconcile the different views of a customer
2. To gain confidence in regulatory filings
3. To ensure information security

When related companies merge or co-brand, each company comes with its own array of data and, more importantly, data metrics. Inevitably, the information presents dissimilar views of similar content. Likewise, various company entities may offer the same challenges; what R&D refers to as a “thingamabob,” marketing labels a “widget.” Same gadget, different name and, therefore, divergent data.

No IT professional would be surprised by this occurrence. A 2002 survey by The Data Warehousing Institute estimates that businesses in the United States annually lose more than $600 billion in postage, printing and staff time as a result of incorrect customer name and address data. Amazingly, that’s nearly 5 percent of the annual U.S. gross domestic product from something as simple as a wrong address. Data governance yields precision.

The U.S. Securities and Exchange Commission (SEC) mandates that public companies file an accurate view of their business dealings, and it is incumbent upon a company to comply.

In 2005, the SEC stepped in when Instinet and INET ATS were found to have repeatedly provided inaccurate information regarding management of investor orders by their electronic ordering systems. Each company was handed a $2.5 million fine. The SEC recounted that, among other mistakes, the companies’ published data misclassified/miscounted shares, improperly categorized orders and erroneously reported times of transactions. Data debility degrades corporate compliance—sometimes with costly results.

Because they value their information and recognize its power, companies ranging from MasterCard and Wal-Mart to Google and Exxon-Mobil have made data governance a priority. Regarding information as a corporate asset nets operational and capital rewards.

In investigating the loss of the Mars orbiter, a project leader made the case for data governance when he said the team would look at how the data got into the system in English units, how the data was transferred and why the conflicting data wasn’t discovered during the mission.

His assessment: “People make errors. The problem here was not the error. It was the failure of us to look at it end to end and find it.”

Robert Reeg, CTO, is responsible for all computer operations, network engineering, technology architecture, database management, program management, testing/software quality and information security at MasterCard Worldwide.