On top of the AI wave and with organisations rapidly becoming more data-driven, the data foundation of organisations is becoming ever more important. To build, maintain and safeguard this foundation, effective data governance is one of the highest leverage initiatives organisations can employ.

But effective data governance is hard, as data governance is both tech- and process driven. An important aid to effectively merge these perspectives is data contracts: concrete agreements to govern data usage that are both machine readable (to implement at scale) and the outcome of a collaboration between the wide set of stakeholders in organizations.

Thus, data contracts serve as the linchpin of effective data governance, providing a framework that ensures data is handled responsibly, securely, and ethically.

What is a data contract?

A data contract simply is an agreement between those using data (data consumers) and those producing data (data producers). Similar to regular contracts, data contracts define the input, output and exchange between different parties that exchange data. And it's the exchange that drives the overarching feature of data contracts: they are the outcome of a collaboration between different stakeholders in organizations.

Data Contracts for Data Governance

Data governance, at its core, aims to maximize the value of data while minimizing risk. By implementing robust data contracts, organizations can enjoy a wide range of benefits:

Enhanced Data Security and Privacy: With data breaches becoming increasingly prevalent, data contracts provide a layer of protection by outlining security protocols, access controls, and privacy measures to safeguard sensitive information.

Regulatory Compliance: Data contracts help organizations stay compliant with relevant regulations and standards, mitigating the risk of non-compliance and potential legal consequences.

Data Contracts enable Policy Enforcement

When including the governance angle (and not just the quality and technical perspective) in data contracts, they can serve as a guidebook for policy enforcement. They lay out the rules and guidelines for data usage, defining access and sharing permissions, and outlining responsibilities and expectations.

The data contract then acts as a compass and acces key, ensuring that everyone within the organization understands their roles and obligations when it comes to data management. Through their programmatic nature, when implemented via a Policy Enforcement Engine, data contracts can help to scale the definition and implementation of data policies at much lower cost and effort.

Conclusion

Data contracts are an essential component of effective data governance. They provide a blueprint for responsible data management, one data product at a time, and ensuring compliance, enhancing security, and improving data quality. Organizations should consider implementing data contracts alongside policy enforcement engines to maximize the value of their data assets while minimizing risk.

By leveraging technology solutions and fostering a culture that embraces data contracts, organizations can navigate the complexities of data management with confidence. Let us embrace data contracts as a cornerstone of responsible and ethical data governance, paving the way for a future where data is valued, protected, and leveraged to its fullest potential.