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Posts Tagged ‘Governance’

TITILE

Corporate governance: Indian perspective vis-à-vis international perspective.

The word ‘corporate governance’ has become a buzzword these days because of two factors. The first is that after the collapse of the Soviet Union and the end of the cold war in 1990, it has become the conventional wisdom all over the world that market dynamics must prevail in economic matters. The concept of government controlling the commanding heights of the economy has been given up. This, in turn, has made the market the most decisive factor in settling economic issues.

This has also coincided with the thrust given to globalisation because of the setting up of the WTO and every member of the WTO trying to bring down the tariff barriers. Globalisation involves the movement of four economic parameters namely, physical capital in terms of plant and machinery, financial capital in terms of money invested in capital markets or in FDI, technology, and labour moving across national borders. The pace of movement of financial capital has become greater because of the pervasive impact of information technology and the world having become a global village.

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It will sound almost a cliché if you say that companies thrive on information. If you go through the front page of any news paper, watch any weather channel, come across a press conference, or go over any annual report, you will witness how data dominates the organizations today. The importance has grown so large that companies have to scour for data of the previous years to ascertain their business efficiency. From marketing department to the operation department, organizations rely on the data of every segment to make smart predictions, store historical records, and read the consumer behavior.

The volume of data grows with the augmentation of customer information. Moreover, the amount of data captured at a particular point of time multiplies every second year. Packaged applications are the norms of the present world and external data is an indispensably important component of every organization. However, old tactics and processes have given way for new ones when it comes to managing data. While the boardrooms get abuzz with the vociferous discussions on data among the executives, companies wake up to the realities of upgrading their data management processes and systems

This quest for advanced data management has given rise to the concept of data stewardship and data governance. However, the chaos and confusion over the roles between business and Information Technology continues to take place. Customer data integration (CDI) and master data management (MDM) are two important initiatives which promise to relieve business experts from the labor of defining and maintaining customer data.  Read more...

Much is written about ‘outsourcing governance’ these days – specifically, that a lack thereof is causing a large percentage of companies to fail to fully realize the value of the outsourcing deal into which they entered.  As always, industry research varies as to the exact percentage of value lost, but most will agree that a company’s inability to manage governance has the potential to reduce business case realization by as much as 35-55%. 

So why aren’t companies paying more attention to outsourcing governance?  It is now widely recognized that standard procurement procedures do not apply to the selection of an outsourcing partner.  And further, that zero-sum negotiations will lead to a lose-lose deal for both parties in an outsourcing contract.  Why then do companies view outsourcing governance as simply an extension of their existing vendor management practices?  Or even worse ignore the need for it altogether?

Perhaps it’s because the term is bandied about so cavalierly with each person implying or inferring the meaning they like.  To some it’s a soft term implying touchy-feely relationship management and politely worded communications.  Others infer the hard line management of service level agreements (SLA’s) and the application of credits against invoices.  To others still it’s simply an afterthought once the “real work” of provider selection and contract negotiation has been completed. Whatever the reason, companies should be aware that the failure to plan for and execute a proper outsourcing governance function could cost them dearly.   Read more...

Who should be responsible for data governance? Data duties have traditionally fallen to IT, but the business is held accountable for problems arising from poor data quality, says Ian Rowlands, senior director of product management at ASG Software Solutions.  Ann recently interviewed Rowlands:

All: Why is data governance so important?
Rowlands: There are three main drivers: one highly tactical, one highly strategic and one kind of in between. The tactical one is data quality. I am starting to chant a little mantra: “Data dictates decisions.” If you have bad data, you make bad decisions. That can be hugely significant, of course. That’s a pointer to the fact that data governance is a framework that can encompass a wide variety of different projects.

The second big driver is compliance. We’re seeing things like Basel II, which was a driver for the project we did with HSBC. (Editor’s note: ASG and its client HSBC were named co-winners of The Data Warehousing Institute’s Best Practice Award in the category of Data Governance. HSBC uses ASG-Rochade, a metadata repository that is implemented in 10 of the world’s 20 largest banks and at other companies worldwide as an enabling technology that manages information about data and systems across the enterprise.) But compliance is now almost everywhere you turn. Every industry has its own multi-initial nightmare, HIPA in the health care space, etc. If you sign for data knowing it hasn’t been adequately derived, you can wind up in a nice, orange suit. That to me fits between the tactical and strategic.  Read more...

What is Governance?

Recently the terms “governance” and “good governance” are being increasingly used. Bad governance is being increasingly regarded as one of the root causes of all evil within our societies. Major donors and international financial institutions are increasingly basing their aid and loans on the condition that ensure “good governance”. The concept of “governance” is not new. It is as old as human civilization.

Simply put “governance” means the process of making-decision in advance and the methodology to assure that these decisions are implemented efficiently and effectively or not implemented.

People sometimes erroneously confuse the term governance with the term government.The word governance derived from Latin that suggest the notion of “steering”.

One can contrast this sense of “steering a group or society” with the traditional “top-down” approach of governments “driving society”. It distinguish between governance’s “power to” and governments “power over”.

The World Bank defines governance as the exercise of political authority and the use of institutional resources to effectively manage and control society’s problems and affairs.

1) the formal and informal actors involved in decision-making and implementing the decisions made, and

2) the formal and informal structures that have been set in place to arrive at and implement the decision

Actors are stakeholders, those include Government, Military, Police, NGO, Corporate, Public, Social, Religious, Media, Public/Private Co’s, Financial, Banks, Legal, or Educational organizations

Formal decision-making structures are the means by which the decisions are formally arrived at and implemented.  Read more...