A data inventory is an important tool for identifying personal data in the data mapping process. Learn what it is and why it’s useful for regulatory compliance.
In recent decades, the role of data in business has become increasingly important. Data is often referred to as an organization’s most important asset because it can be used for purposes ranging from improving revenue and optimizing customer experiences to mitigating security risks.
SEE: Data governance checklist for your organization (Tech Republic Premium)
However, with the vast amounts of data now available and operationally used in the business world, it can be challenging for organizations to fully understand all of their data. For companies struggling to keep track of all their types of data assets, locations and usage scenarios, a data inventory becomes extremely useful.
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What is Data Inventory?
A data inventory is the catalog or map of an organization’s data assets. A typical data inventory has a comprehensive and up-to-date overview of all data assets and where they reside in business systems. Each entry in the data inventory often contains additional details about the data, such as its owner, name, source, format, access rights, frequency of use, and other properties.
The purpose of a data inventory is to help an organization understand its data or metadata and extract valuable insights from it. The data inventory illustrates important information about data and provides valuable information about how each data point interacts with other data. This helps the organization understand how data flows through the business, how to protect it, and how to extract the most value from it.
Why is a data inventory necessary?
Creating a data inventory helps organizations improve operational efficiency, meet compliance obligations, mitigate risk, and achieve data-driven business outcomes. The clearer view of data that a data inventory enables is a major benefit to organizations looking to identify high-risk or high-value data and develop strategies to manage that data throughout its lifecycle.
Operational efficiency is improved through better access to data that can aid decision making, analysis and productivity. Another important way that data inventory helps improve operational efficiency is by identifying obsolete, redundant, or trivial data that unnecessarily consumes organizational resources.
SEE: Top data quality tools (TechRepublic)
Several studies over the years have shown that most organizational data is “dark,” meaning it is either unknown or untapped. Dark data is a by-product of applications, data interactions, and devices that add to IT infrastructure maintenance costs. With a data inventory, organizations can better understand dark data, identifying where it comes from and how to use or dispose of it.
For example, an organization can identify and sort data into different categories, including unused data that must be retained for legal or compliance reasons, intellectual property, duplicate data, data under legal hold, or other business data. The data inventory process can help an organization remove unnecessary data during deployment data retention policy for sensitive or valuable data.
Common Data Inventory Challenges
Building a data inventory is more than just a one-time process: it requires coordination between different departments, an investment of resources and technical expertise. One of the challenges of building or maintaining a data inventory is identifying all the data sources an organization works with, especially as data sources and data set sizes change over time.
In today’s digital world, data resides in various applications, devices and formats. Involving business process owners is a good start; use, however data discovery software is an important next step. This software can help your team more effectively detect and identify the contents of datasets.
Another common challenge in a data inventory is keeping it up to date, not only in terms of data content but also in terms of data data quality. Since organizational data changes rapidly, it must be regularly reviewed for quality. Organizations can use continuous and automated data ingestion processes to keep the data inventory useful. This ensures that the data remains fully integrated with the organization’s technology stack.
Finally, a major challenge in creating a data inventory is making it usable. A well-maintained data inventory is less like storage and more like a resource that stakeholders can use to make business decisions. It’s important that your key stakeholders not only know that a data inventory exists, but that they use it to help themselves and their teams keep track of valuable business assets.
Data Inventory and GDPR
Data inventories help organizations comply with regulations such as General Data Protection Regulation, California Consumer Privacy Act and other regulatory authorities. However, since data resides within and between different departments of an organization, such as sales, IT, and finance, it can be challenging for an organization to ensure that all data complies with applicable laws and regulations.
SEE: GDPR resource kit: tools to become compliant (Tech Republic Premium)
A well-maintained data inventory helps organizations maintain privacy and protection wherever data resides. Some benefits of a data inventory for regulatory compliance include:
- Provides a support structure for data protection programs.
- Facilitates data protection efforts of data engineers and data protection officers.
- Provides information for teams to perform risk assessments.
- Provides a blueprint for managing data access, data sharing, and permissions.
- Creates a framework for more effective data breach notifications.
Meet the requirements for GDPR compliance can be challenging for organizations, especially if they don’t understand what type of data they have, how it is stored, and how it flows through the organization. Data inventories are simple yet highly effective support tools for teams tackling these kinds of compliance projects.
The use of data inventory will only increase as more data privacy protection programs are introduced. The need for data inventories will also increase the demand for technology that can make creating and managing data inventories easier for an organization.
Read more: Top data management tools (TechRepublic)
