14.3 C
New York
Thursday, October 6, 2022

Buy now

The basics of data governance in e-commerce

Enterprises use data governance to improve their operations, support compliance and create competitive advantage. This cheat sheet explains what it is and how it works.

Shopping bags in shopping cart and credit card on laptop with paper boxes on table and sales data economic growth chart on screen, online buying and selling services on network, online shopping and e-commerce concept
Image: ipopba/Adobe Stock

Today’s big data boom means that the e-commerce industry relies more than ever on data to develop customer relationships and improve revenue. However, data must be secure, reliable, compliant and ready to use. This is where data governance comes in.

Jump to:

What is data management?

Data management outlines a consistent approach for ecommerce businesses to collect and use data. It describes the accuracy and quality of the data, how it should be used and who can use it. Through automated and intelligent data governance tools, data governance starts with inventorying and classifying available data.

TO SEE: Hiring Kit: Database Engineer (Tech Republic Premium)

Once data is selected, organized, and presented, the focus shifts to creating policies to manage data usage and establish data administrators. These data stewards provide hands-on governance of particular data sets and become the subject matter experts to be consulted when questions about data arise. The data governance initiative will then monitor data quality to uncover gaps in ecommerce coverage. Data quality metrics also help identify and catalog new data sources and inform data administrators and other stakeholders about changing data usage patterns.

How does data governance work in e-commerce?

Today, data determines the success of both online retail and e-commerce. High quality data is required to enable these industries to make critical and accurate decisions quickly. Ecommerce companies also capture a lot of sensitive consumer data, from payments to patterns, reiterating the importance of data governance in terms of regulation and compliance.

Ecommerce companies collect data from many sources, including web analytics, email and marketing tools, online transactions, surveys, and more. This information is consolidated and consumed by the relevant stakeholders. Properly implemented data governance initiatives ensure that these stakeholders have access to data and that the data is of high quality.

By managing and integrating these data sources into e-commerce, teams can generate actionable insights about customers, trends, products, regions, and more. These insights play a major role in:

  • Informing gaps to adapt to consumer and market trends
  • More effective customer loyalty and engagement
  • Optimization of price, inventory and labor allocations
  • Informing innovation and new and untapped market opportunities

Why is data governance important for e-commerce companies?

Visibility, relevance and consistency

Digital outlets have a huge impact on today’s customer. Online reviews, for example, go a long way toward convincing customers. Customer journeys have also progressed over time. There is more data for ecommerce businesses to capture.

Data such as customer purchases, shipping details, inventory and more are interconnected and must be seamlessly updated across multiple platforms and systems. This responsibility is placed on different teams who may eventually introduce data silos or irrelevant and outdated data.

An efficient and unified data management system helps e-commerce companies to efficiently manage such distributed data. Such a system ensures that data remains relevant and consistent across all platforms and prevents data silos. This gives these companies more visibility to escalate their operations.

Limit data exposure

Data must circulate seamlessly across the entire ecosystem of e-commerce and retail stakeholders. While restricting data can limit the effectiveness of most industries today, the proliferation of such data can give rise to safety and security concerns. Security breaches involving sensitive customer data often destroy customer-brand relationships.

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

Dealing with inconsistencies in the data

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

Inconsistent data impacts sales, revenue, productivity, and overall strategy. However, a robust data management system uses data pipelines to manage, modify, and thoroughly validate raw data. As a result, e-commerce businesses benefit from better data visualization and easier, faster and more accurate data analysis.

What are the benefits of data governance for e-commerce?

Overall performance

By improving efficiency and saving time, data governance increases the overall efficiency of ecommerce businesses. Different teams can easily find the right data and generate insights faster. They can also get much more accurate answers faster.

Data quality

Data management consistently tracks data quality and usage statistics. These metrics help ecommerce businesses understand how different teams and stakeholders are using data.

Better business insights

Ecommerce teams can use analytics to identify areas of underperformance, gain a competitive advantage, and discover new revenue streams.

Improved decision making

With data governance, companies can quickly make accurate decisions using high-quality data. Employees have access to the right data under the right controls to ensure privacy and compliance are maintained.

Ownership, responsibility and liability of data

To enable teams to use data assets effectively and appropriately, they need data governance to help them capture and share ownership, responsibility, and accountability of data. In addition, the employees know who the experts are to contact if there are questions and problems.

Data management is proving to be a necessary part of e-commerce today. Properly implementing a robust data management solution will position ecommerce businesses for new opportunities, increased security and customer trust, increased revenue and ecommerce growth.

Source link

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
3,517FollowersFollow
0SubscribersSubscribe

Latest Articles