Most companies understand the consequences of poorly planned ERP projects. Schedule overruns and low benefits realization are just two.
However, an often-overlooked consequence is data governance and compliance issues. If you botch any aspect of your project, whether the technology, process, people, or data, it can have a direct impact on your ability to adhere to data governance principles and regulations.
The consequences of these data governance issues can be severe. Organizations may face legal penalties, regulatory investigations involving software development expert witnesses, reputational damage, and more.
Today, we’ll be discussing how to build data governance into your ERP implementation.
Missteps That Lead to Poor Data Governance
ERP implementation is complex. Problems arise when implementation practices don’t support good data governance.
You can hire a software expert if you believe your system integrator is at fault, but it’s better to avoid these missteps to begin with.
1. Inadequate Data Classification and Handling
Data classification is a requirement for effective data security, regulatory compliance, and risk management. It helps you understand what types of data your business stores and where the data is located. Inadequate classification can lead to data mishandling or improper storage and sharing.
A Failed Payroll System Implementation
Panorama’s Expert Witness team was retained to provide a forensic analysis and written report to the court regarding the failed implementation of a major software developer’s ERP/payroll system.
2. Lack of Data Privacy Controls
Your ERP implementation framework should include data privacy controls, including:
• Protecting data from unauthorized access and loss
• Maintaining confidentiality
• Simplifying data management
• Facilitating data protection strategies
Ineffective data privacy controls can make your organization non-compliant with data protection laws.
3. Insufficient Data Security Measures
ERP software is a prime target for hackers. Poor data security controls put your organization at risk. During your implementation, you can put measures in place to avoid the following missteps:
• Weak access controls
• Lack of encryption
• Insufficient data backup and recovery processes
4. Poor Data Documentation
Documenting your data assets is one major challenge of ERP implementations. You need to document your data sources and models from the beginning using data dictionaries, metadata, and data lineage. Inadequate documentation can make data discovery and auditing more difficult.
5. Unresolved Data Quality Issues
Controlling data quality doesn’t stop with go-live. Monitoring and improving data quality must be an ongoing effort.
Failing to address quality issues can lead to inaccurate, inconsistent, or outdated data. This then leads to poor business decisions and an inability to meet compliance requirements.
5 Implementation Activities That Support Data Governance
1. Establish a Robust Data Governance Framework
A strong data governance framework is the first step to avoiding data governance issues. This blueprint should include guidelines around:
• Data scope
• Organizational structure
• Data standards and policies
• Monitoring and metrics
The framework helps you set implementation priorities, which helps you measure the success of your data governance strategy.
2. Implement Proper Policies and Controls
Establishing the right policies and controls is essential for good data governance. Robust access control is key. It should regulate how and when your organization grants access to specific data.
Access control considers factors such as:
• User identification
• Authentication
• Authorization
The access control policy should specify the enforcement mechanism for these controls and cover how your organization will evaluate, monitor, and update access controls.
You may need to start with an employee assessment to determine whether your employees have the right levels of access. Users should have only the minimum access necessary to do their jobs.
3. Conduct Regular Audits
You can conduct internal audits or hire an outside auditor. A data governance checklist should address several factors, such as:
• Decision-making authority
• Policies and procedures
• Data inventories
• Data content management
• Data records management
• Data quality
• Data access
• Data security and risk management
Finding weaknesses during an audit is much better than finding them after a data breach. You can make any necessary adjustments in your data governance procedures before it’s too late.
4. Invest in Data Management Tools and Training
A variety of data management tools can support your data governance policies. Data management software integrates all aspects of the information lifecycle:
• Generation
• Collection
• Processing
• Storage
• Management
• Analysis
• Interpretation
The right tools can help your organization handle data more efficiently and securely.
You want ERP software with a range of modeling options. It should be able to cleanse data and link it to your models, while integrating data from disparate systems into centralized dashboards and reports.
Data management tools are only as effective as the people using them. Ongoing training is important for anyone who creates, captures, or analyzes data.
5. Design an Effective Change Management Strategy
Organizational change can provoke resistance which may limit the effectiveness of your data governance policies and procedures.
Effective change management starts with communication. You need to build the case for the ERP implementation and any changes in your data governance.
You need support from all levels of the organization. Executive support helps get the project moving. Support from managers sets the tone for employees.
You can help employees understand the importance of new ERP software by focusing on the benefits they’ll see on a daily basis.
Avoid Data Governance Issues in Your ERP Implementation
Your ERP implementation strategy can help your organization avoid data governance issues. A robust data governance framework with the proper controls is key. Regular audits tell you whether your data governance is on track.
Panorama Consulting Group can help you avoid ERP data governance issues. Contact one of our ERP consultants below to discuss how we can help you improve your data governance.
