Data lineage, a vital cog in the wheel of today’s data-centric world, offers myriad benefits to organisations, from ensuring data accuracy and compliance to facilitating discovery and more. This blog delves into the concept, its importance for businesses and the rewards and hurdles associated with it.
What is Data Lineage?
Data lineage offers a comprehensive view of data’s journey from inception to the final state, encapsulating all stops and alterations en route. This crucial mechanism equips businesses with a complete picture of their data’s lifecycle, fortifying accuracy, reliability and regulatory compliance.
Imagine data lineage as a map of a city’s roads. It outlines where different locations (data points) are and the routes (transformations) to navigate between them. It’s then up to organisations to choose the optimal path – the fastest, shortest, or toll-free. Similarly, data lineage outlines the data’s journey and organisations determine the best route forward, given their unique needs and constraints.
By identifying bottlenecks and high-risk areas in the data journey, and with the aid of the right software assigning personnel responsible for managing the process, businesses can optimise their data flow, enhancing productivity and risk management.
Benefits of Data Lineage
Ensures Data Accuracy and Trustworthiness
It helps organisations pinpoint and rectify potential issues leading to inaccuracies or errors, thereby ensuring data reliability.
For example, a retail company analysing sales data to optimise inventory management must ensure that data from multiple sources, such as their point of sale (POS) system, is accurate. If there’s an error in the data from the POS system, such as a missing decimal point or a misplaced zero, it can cause the sales figures to be wildly inaccurate. Using data lineage, the retail company can track the path of their data from its origin (the POS system) to its destination (the sales analysis report) and identify any potential errors or inconsistencies along the way.
Helps With Compliance and Regulations
It aids organisations in meeting regulatory requirements by maintaining a transparent record of data’s journey. This is particularly valuable in industries such as healthcare, where stringent regulations govern data privacy and security.
For example, the healthcare industry is required to comply with strict regulations that govern the privacy and security of patient data. Data lineage helps organisations comply with these regulations by providing a clear record of how patient data has been used, moved and transformed.
Strengthens Data Governance
Data lineage can reinforce data governance by offering insights into data usage and identifying areas needing policy and practice improvement.
For example, a bank could track the flow of customer data from its origin (customer account opening) to its destination (data storage), ensuring that data is being handled according to established governance policies and practices. This helps the bank avoid data breaches and other security issues and maintain compliance with regulations such as the Australian Prudential Regulation Authority (APRA) guidelines.
Facilitates Data Discovery
By mapping data’s journey, data lineage facilitates data discovery, allowing organisations to identify new data applications and gain a competitive edge. This deeper understanding of data enables improved business outcomes.
For example, a marketing company can track the path of their customer data from its origin (customer interactions) to its destination (marketing campaigns) and gain insights into which marketing campaigns are most effective and which customer segments respond best to certain types of messaging.
When employing the right tools, data lineage can also lead to robust impact analysis. By using diagrams users can understand the ripple effects of changes both upstream and downstream and delve into the impact at granular levels such as tables, columns, or business reports.
For example, in the retail space, if a customer address is used in the shipping address for all open orders, and that changing the address will require updates to the order table. You might also discover that the customer’s address is used in a business report that tracks customer demographics, and that changing the address will affect the accuracy of this report. With this level of granularity, it’s possible to make more informed decisions about how to proceed with the update and ensure that all relevant parties are aware of the impact of the change.
Challenges and Limitations
Complexity of Data Architecture: In large and complex data architectures, tracking data lineage can be difficult. It requires a detailed understanding of how data flows through different systems and processes, which can be challenging to establish and maintain.
Time and Resources: Implementing a data lineage process requires time and resources. It involves defining data models, mapping data flows and establishing governance policies and practices to ensure the success of the initiative.
Data Governance Policies and Practices: Data lineage is an important component of data governance, but it cannot be effective without proper data governance policies and practices in place. Organisations need to establish clear policies and practices for data management, including data quality, data security and data privacy.
Data lineage is a powerful tool, guiding businesses in tracking their data’s journey, fortifying its accuracy, reliability and regulatory compliance. Although the journey towards implementing it may pose challenges, its ability to improve data governance, facilitate data discovery and enable informed decision-making makes it an investment worth making for the long-term.
Not sure where to start with your data lineage? Get in contact below, our Data Governance experts are here to help.