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UNDERSTAND THE BASICS OF DATA GOVERNANCE IN E-COMMERCE

   
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by Collins Ayuya in Big Data
on October 12, 2023, 10:02 AM EDT


UNDERSTAND THE BASICS OF DATA GOVERNANCE IN E-COMMERCE

Data governance is necessary in e-commerce as it ensures that decisions are
based on quality data while simultaneously managing risk and upholding
compliance standards.

Data governance serves as the backbone for businesses to manage and utilize data
effectively. It begins with the inventory and classification of available data,
guided by automated and intelligent data governance tools. Once data is
organized, policies are created to manage its usage, and data stewards are
appointed as subject-matter experts.

In the realm of e-commerce, data governance takes on added significance.
High-quality data is not just a requirement but a critical asset for making
timely and accurate decisions. Moreover, with e-commerce platforms capturing
sensitive consumer data, governance becomes crucial for ensuring compliance and
security.

Jump to:

 * How data governance works in e-commerce
 * Why is data governance important for e-commerce companies?
 * What are the benefits of data governance for e-commerce?
 * Employing data governance in e-commerce


HOW DATA GOVERNANCE WORKS IN E-COMMERCE

E-commerce businesses collect data from many sources, including web analytics,
email and marketing tools, online transactions, surveys and more. This
information is consolidated and consumed by relevant stakeholders. Correctly
implemented data governance initiatives ensure these stakeholders have access to
data and that the data is of high quality (Figure A).

Figure A

Data governance dashboard in Tableau. Image: Tableau

Governing and integrating these data sources in e-commerce means teams can
generate actionable insights on customers, trends, products, regions and more.
These insights have a huge part to play in:

 * Informing gaps to adapt to consumer and market trends.
 * More effective customer retention and engagement.
 * Optimization of pricing, inventory and labor allocations.
 * Informing innovation as well as new and untapped market opportunities.

SEE: For a broader picture of the workings of data governance, read our guide on
how data governance works.


WHY IS DATA GOVERNANCE IMPORTANT FOR E-COMMERCE COMPANIES?

E-commerce businesses that lack a clear data governance strategy open themselves
up to challenges like data breaches and regulatory fines, which can ultimately
result in loss of customer trust. Business growth and brand reputation can also
take a hit. As a result, the importance of data governance should not be
understated in e-commerce.


IMPROVING VISIBILITY, RELEVANCE AND CONSISTENCY

Digital outlets and advanced customer journeys have led to an influx of diverse
data for e-commerce companies. This data, ranging from customer purchases to
inventory, needs seamless updating across multiple platforms. However, the
responsibility often falls on various teams, risking the introduction of data
silos and obsolete data.

An efficient and unified data governance system helps e-commerce companies
efficiently manage such distributed data (Figure B). Such a system guarantees
that data remains relevant and consistent across platforms and prevents data
silos. This gives these companies greater visibility to escalate their
operations.

Figure B

Dashboard of consolidating data in SAP. Image: SAP


LIMITING DATA EXPOSURE


MORE ABOUT DATA CENTERS

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   Mitigation
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Data should seamlessly circulate throughout the ecosystem of stakeholders in
e-commerce and retail. While unrestricted data flow can improve workflow
efficiency by preventing data silos, its circulation may pose safety and
security concerns. However, the flip side is that security breaches involving
sensitive customer data often destroy relationships between customers and
brands.

SEE: Check out this IT staff systems and data access policy from TechRepublic
Premium.

What data governance systems give e-commerce brands are security features such
as two-factor authentication, data encryption and tokenization to limit access
to sensitive data.


DEALING WITH DATA INCONSISTENCIES

The data repositories and warehouses kept by e-commerce companies may suffer
from data inconsistencies. A change in one repository means that all the other
repositories need to be updated to reflect the same change, which may become
complex and overwhelming over time.

Inconsistent data impacts sales, revenues, productivity and overall strategy.
However, a robust data governance system takes advantage of data pipelines to
help curate, modify and thoroughly validate raw data. E-commerce businesses
resultantly enjoy better data visualization and easier, faster and more accurate
data analysis.


WHAT ARE THE BENEFITS OF DATA GOVERNANCE FOR E-COMMERCE?

While the importance of data governance focuses on the necessity and the
challenges it solves, the benefits point to the positive impacts and the value
it adds to e-commerce businesses. Data governance frameworks benefit e-commerce
businesses in areas like:

 * Overall performance: Data governance enhances efficiency, enabling teams to
   quickly find accurate data and generate insights.
 * Data quality: Consistent tracking of data quality metrics provides visibility
   into team and stakeholder data usage.
 * Better business insights: E-commerce businesses can identify weak performance
   areas, gain a competitive edge and discover new revenue streams.
 * Improved decision-making: High-quality data under proper controls facilitates
   quick and accurate decision-making while maintaining privacy and compliance.
 * Data ownership, responsibility and accountability: Data governance
   establishes clear ownership and accountability, guiding e-commerce teams on
   who to consult for data-related issues.


EMPLOYING DATA GOVERNANCE IN E-COMMERCE

Data governance is proving to be a necessary component of e-commerce. Correctly
implementing a robust data governance solution will position e-commerce
companies for new opportunities, greater security and customer confidence, more
sales and e-commerce growth.

Employing data governance best practices will allow e-commerce businesses to
understand how to establish and maintain data governance and position themselves
for growth.

SEE: Explore our data governance overview to learn more.


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Collins Ayuya
Published:  October 12, 2023, 10:02 AM EDT Modified:  October 12, 2023, 10:00 AM
EDT See more Big Data articles


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By Collins Ayuya
Collins Ayuya is pursuing his Master's in Computer Science and is passionate
about technology. He loves sharing his experience in Artificial Intelligence,
Telecommunications, IT, and emerging technologies through his writing. He is
passionate about startups, innovation, new technology, and developing new
products as he is also a startup founder. Collins enjoys doing pencil and
graphite art and is also a sportsman and gamer during his downtime.
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