What Is the True Value of a Data Catalog?

When considering implementing any new tool or software, the first thing many organisations will ask is what is the value add. And implementing a data catalog is no different. From helping analysts search and find the data they need to promoting data as an asset, there are many ways data catalogs can add value to your organisation.

But the actual value you can get out of a data catalog will depend somewhat on the reason you’re looking to implement one in the first place.

We’ll take a look at why companies want a data catalog, how a data catalog is defined and the value you can get out of it.

Three reasons companies adopt a data catalog

When looking at the value of a data catalog, starting with the ‘why’ is key. Companies looking to implement a data catalog usually fall into one of three archetypes, each with their own reason for employing a data catalog.

1. Upgrading an existing catalog

These are companies that use an existing data catalog but are experiencing some problems or recognize areas that can be improved.

2. Improving on a make-shift methodology

These are companies that have tried to make something resembling a data catalog themselves — e.g., using business glossaries, spreadsheets, and other systems — but they have recognized problems with this method.

3. Starting a data strategy journey

These are companies that have never used any form of data catalog, but recognize the benefits of one.

The value of a data catalog means something different to each of these companies — meaning they will each expect something different out of its implementation. In fact, they likely have different definitions of what a data catalog even is.

How do you define a data catalog?

A data catalog is a central repository for all knowledge about data — a system that provides people in an organization with a connection to their data, and therefore drives the value of their organization faster. Regardless of which archetype a customer falls into, they each have the common goal of driving value through data. A data catalog provides them with the tools to achieve this goal.

Alation’s enterprise data catalog improves the productivity of data analysts, increases the accuracy of analytics, and enables confident data-driven decision making whilst empowering everyone across the organization to connect with data.

The value that can be derived is ultimately based on the customers’ ability to make use of their data and also the manner in which they choose to do so.

Acting on and making use of data

Generally, an organization’s data activities are defined by their data strategy, namely, whether they pursue a more offensive or defensive focus. These focuses do not imply polar opposite mindsets but rather a spectrum that reflects a business’ unique regulatory landscape, business functions, and goals.

To put it simply, a defensive strategy prioritizes centralized, well governed data to conform to regulations and mitigate fines, both monetary and reputational.

On the other hand, an offensive strategy uses data automation to save time and accelerate informed decisions that optimize business outcomes; i.e., “How can we drive profits as a result of this?”

Whether an organization acts upon their data with an offensive or defensive focus depends on the individual organization but is certainly influenced by differences between industries and between regions.

For example, European organizations traditionally react to their data with a more defensive focus, whereas companies in America tend to act more offensively. This is likely a result of the many regulations regarding data in Europe — GDPR is just one example. However, we are beginning to see this divide flip on its head to some extent. European companies have largely adapted to regulations and are now willing to pursue more offensive data tactics while American businesses are starting to focus more on the defensive side of things as the country starts to employ more privacy regulations.

The differences in focus across industries are far more subtle and are largely due to the different regulations between these industries. For example, data regulations for the banking industry differ greatly from those for the retail and travel industries.

How do you derive value from a data catalog?

There is definitely clear value that can be derived from data catalogs and the information added to them. For example, they can help companies when executing processes that need data from a variety of areas, connect people with data quicker, and help businesses make decisions based on high-quality data.

Plus, for customers focusing on the defensive side of a catalog, having data that is centralized and well governed can help companies comply with regulations and avoid both reputational damage and financial risk from GDPR fines. Having more control over your company’s data means it can be protected, so the right data is accessed by the right person at the right time. This is particularly important in financial services and other regulated environments.

Whilst customers can be roughly categorized as one of three archetypes, each customer is entirely unique and what they will find valuable will be unique, too. So, the true value of a data catalog is difficult to quantify because there are many use cases that can’t be measured. But, Alation’s data catalog value index can help.

Using the index can help companies understand the value they are getting from their data catalog based on their actual usage. This includes analysts’ time saved from finding and understanding data, and from creating and executing queries.

Quantifying the value of a data catalog

But what is the Alation Data Catalog’s value in monetary terms? What impact do advancements in governance, collaboration, and productivity have on financial results?

Alation conducted a Total Economic Impact ™ (TEI) study to find the answer to those questions in collaboration with Forrester Consulting and seven of our production clients. The study looked at the possible ROI businesses may get from using Alation.

As part of the study, Forrester developed a strategy for assessing the Alation Data Catalog’s financial impact on client enterprises. After that, Forrester was able to quantify many of the advantages businesses experience with Alation.

Their research demonstrates that adopting data catalogues has both quantitative and qualitative advantages, including a 364% return on investment (ROI).

Shortening data discovery by at least 50% resulted in time savings of $2.7 million, productivity improvements for business users resulted in savings of $584,182, and the onboarding of new analysts took at least 50% less time, saving $286,085 in total.

Other significant advantages included preventing data lakes from becoming data swamps, enhancing the accuracy of analytics, and making it easier to record tribal knowledge.

However, for companies to gain real value from their data catalog ensuring everyone is onboarded is key. This means more data gets added from across the business, and as more data is added the catalog will become more and more valuable,

If you’d like to find out more about Alation’s data catalog and the value it can add to your business, learn more by requesting a demo today.