Lean Governance: The Next Machine to Change the World

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Click to learn more about author Steve Zagoudis.

Lean GovernanceTM is the next machine to change the world of Data Governance and Enterprise Data Management. As proponents of lean thinking, we view corporations as data factories that produce information for operations, reporting, and financial modeling.

We were inspired by the 1990 groundbreaking book “The Machine that Changed the World” (Roos, Womack, and Jones). It’s based on a $5 million dollar study from the Massachusetts Institute of Technology undertaken to provide insight into the transformation from mass production to lean production in the automotive industry. The study set out to understand why the Japanese auto industry significantly outperformed their competition with groundbreaking methods of production. The rest of the world quickly became aware of the need to change and grow … or die.

The principles of lean production involve teamwork, communication, efficient use of resources, elimination of waste, and continuous improvement. In the automotive world, lean production was responsible for a 50% reduction in the areas of manual labor, manufacturing space, investment tooling, engineering hours, and time to new product development, according to the aforementioned book.

How did all this come about? Japanese engineers observed tremendous waste, termed muda, when visiting mass production facilities in the U.S. and Europe. They also found widespread inefficiencies and quality problems. Lean production was their solution. 

Today, we see similar problems when reviewing the state of client data and their reporting environments. The reliance on spreadsheets for data collection, reconciliation, and reporting creates a “perfect storm” for bad data. This also makes it nearly impossible to know the correct sources for all the data, compromising ownership and accountability. In theory, Data Governance implementations based on policies, procedures, and other governing documents are meant to ensure data integrity across the corporation. In reality, the best business processes, tools, and approaches to Data Management can still fail to meet that objective.

Lean Governance offers a fresh look at how data is used across the entire organization. The first step is to root out waste. This involves analyzing your data factory for bottlenecks, typically found among the use of spreadsheets in reporting, manual reconciliations, high data defect rates, data corrections outside of source systems, insufficient business glossaries, and limited awareness of correct data sources. We find that it’s impossible to achieve total Data Quality and operating efficiency unless you understand overall structures, patterns, and behaviors – and how they reinforce or hinder one another. The goal is to provide value to the end customers, both inside and outside of the company. 

Corporate waste is a growing problem across data and reporting platforms despite the huge sums of money spent on system improvements. If that wasn’t enough, where there is waste there is risk. We define it as zero defects. Lean governance is the next machine to change the world, one in which companies can operate their data and information assets with high reliability.

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