Why is Data Inventory Important?
Data has become an asset for organizations, with McKinsey research showing that enterprises that are “datafied” are 23 times more likely to acquire customers, 6 times as likely to retain customers, and 19 times more likely to be profitable (ref here). With the growing number of IT systems, companies may have a low level of awareness about where they house sensitive information. Compiling a data inventory is essential for comprehending the value and whereabouts of an organization's data resources and metadata, which can aid in decreasing risk and guaranteeing conformity with privacy and regulatory requirements.
Data inventory is an important aspect of an organization's data management that provides immediate visibility into all its data sources, the information they acquire, where the data is stored, and what happens to it in the end. In addition to the benefits mentioned earlier, a comprehensive data inventory also helps organizations comply with regulations such as GDPR and CCPA, which require them to know what personal data they hold and how it's being processed.
Data inventory can also help organizations manage risks associated with unauthorized access, data breaches, or data loss by identifying and mitigating potential risks. It is an essential part of data governance, which involves managing data to ensure its accuracy, completeness, consistency, and security. With a data inventory, organizations can ensure that their data is managed according to their data governance policies and standards.