Monday, October 2, 2023

Why Data Inventory Is Important

By Nikhil Sonawane - July 14, 2023 6 Mins Read

Why Data Inventory Is Important

Data is the foundation of every business, irrespective of its size, industry, or type. The size of the data sphere continues to scale. Hence, it has become crucial for all businesses to track the data they gather and store. Additionally, enterprises need to know where they store data and who has access to it.

What is Data Inventory?

A data inventory is also known as a data map. It is a holistic catalog of the entire data assets the business owns. A well-maintained data inventory has updated and in-depth information about the data. It includes the details of the source within the organization.

If organizations develop a robust data inventory, they can get valuable insights into the data types they gather. They will also get a holistic view of the repository it is stored in, who has access to it, and its purpose. The best data maps will have information about the data and its dependency on other data.

The Use of Data Mapping 

The Use of Data Mapping 

Enterprises that maintain an inventory of their data can operate efficiently. Data mapping is an effective approach to optimize reporting and eliminate risk. Moreover, it also helps businesses to adhere to privacy and compliance requirements. Data maps enable businesses to identify where the data is in the data repositories.

Businesses based on their demographics have to comply with the following privacy regulations:

  • California Consumer Privacy Act (CCPA),
  • California Privacy Rights Act (CPRA),
  • General Data Protection Regulation (GDPR)

These data privacy regulations strengthen users’ data privacy laws. They govern rights on collecting, sharing, and using users’ personally identifiable information (PII).

To comply with these data privacy laws, businesses need to identify individuals’ PII. Businesses should be able to offer, remediate, or erase the user’s data on demand. Additionally, enterprises that share data with third-party vendors should be able to vouch for them.

An efficient data inventory is essential for businesses to achieve compliance with the laws. 

The Importance of Data Inventory

Today data lives across all the verticals throughout the organizations. With the humungous amount of data generated daily, there is always the risk of dark data creation. It is challenging for the data Ops teams to identify and segment dark data.

Without updated and well-maintained data inventory, businesses will struggle to understand if they meet all the compliance requirements.

Decision-makers can consider data maps as a top priority. Doing so will help to identify the risks in the organization’s data storage practices. It would also highlight the potential new risks.

Other than compliance, a data inventory will be valuable in multiple ways. The following is the reason why a data map is important:

  • It shows data types. It also would highlightdark data that might have gone unidentified.
  • It helps to determine the data sources and whether they are trustworthy.
  • Allows decision-makers to see where sensitive data is stored.
  • Data maps enable decision-makers to determine the data value. It will also highlight whether the data is being utilized or monetized well.
  • Data Ops teams can identify the risks associated with the data. As a result, data inventory will reduce the associated risks.
  • It highlights whether data is subjected to legal or compliance policies.
  • Developing a data inventory enables organizations to set clear data sets and responsibilities. Data decision-makers can make more informed decisions to increase the data value.
  • Tracking a data inventory helps to reduce risks without compromising on any regulation.
  • Data inventory adds efficiency and accountability to an organization.

This can result in data-driven decision-making to optimize operational performance optimization.

Organizations cannot detect and fix operational issues without an effective data inventory. These gaps can result in increased data breaches and non-compliance with regulations.

Data Inventory Types 

There are multiple data inventory types that data leaders can embrace. Every data maps have its specific purpose and focus. Following are a few common types of data inventory:

  • Physical Data Inventory

Such data inventory types concentrate on the physical location of data. Physical Data Inventory will have information about servers, hard drives, and storage devices. It will have data on every storage device’s capacity, usage, and status.

  • Logical Data Inventory

Logical Data Inventory is A data map based on how the information is logically structured or formatted. It will have data related to the schema, tables, fields, and interdependencies of the data sets.

  • Data Privacy Inventory

Data Inventory that concentrates on data privacy and compliance are data privacy maps. They offer businesses the capability to provide, fix, or erase personal data on demand.

  • Functional Data Inventory

This inventory type concentrates on the functions and workflows that data supports. Such data inventories store information about the data’s purpose, usage, and business value.

  • Technical Data Inventory

Businesses must have a Technical Data Inventory to get a technical view of the data’s format, quality, and integrity.

  • Data Governance Inventory

Data maps that focus on data governance and management are data governance inventories. They overlook the adherence of data with policies, procedures, and standards. Maintaining a data governance inventory is crucial to ensure data quality, security, and compliance.

 Steps to Create a Data Inventory

Developing an effective data inventory needs a strategic approach. Following are a few ways that data decision-makers can consider creating a data map for their organization:

  • Establish a Data Inventory Team

Organizations need to set roles and responsibilities to gather data from multiple departments.

  • Determine the Scope of the Data Map

Data inventory teams should work cohesively to define the project’s goals, deadlines, resources, and other guidelines. The data map should have parameters to define what kind and how much data businesses should gather for their inventory.

Also Read: Data Privacy: Key Developments for Organizations to Watch for in 2023

  • Segment Data Assets

Every department leader should be responsible for defining and cataloging their department’s data. After gathering data from all the departments, the data inventory teams can compile data in one inventory.

  • Execute Quality Checks

The data teams can execute quality checks once the businesses clean and structure data. Data quality checks will reduce duplication, inconsistent and incomplete information. This step is essential to maintain the quality of the data sets.

Data decision-makers need to be vigilant about the data they collect, its storage, and how they will use it. Maintaining a data inventory will help maximize its value and reduce associated risks.

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Nikhil Sonawane

Nikhil Sonawane is a Tech Journalist with OnDot Media. He has 4+ years of technical expertise in drafting content strategies for Blockchain, Supply Chain Management, Artificial Intelligence, and IoT. His Commitment to ongoing learning and improvement helps him to deliver thought-provoking insights and analysis on complex technologies and tools that are revolutionizing modern enterprises. He brings his eye for editorial detail and keen sense of language skills to every article he writes. If he is not working, he will be found on treks, walking in forests, or swimming in the ocean.

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