Governance is a broad term that refers to the processes, policies, and controls that an organization puts in place to manage its operations and ensure compliance with internal and external regulations and standards.

The landscape of how data is viewed has completely changed; consumers are more in control of how their data is used and shared by companies, putting a lot of technical requirements on organizations who wish to have the privilege of using certain types of personal information for profit generation.

For example…

If a fintech company wants to collect your credit information to process an application for a loan, they can do so with that information. But credit report data is protected by the Fair Credit Reporting Act (FCRA), among other laws and industry requirements, so any organization who wants to use that data outside of their own first party business generation purposes has to put significant governance controls in place to make sure the data is being used within the parameters of the restrictions

Governance can encompass a wide range of activities, including:

Risk management
Compliance monitoring
Data management
Resource allocation

Simply put, governance is any activity that you do to make sure that you proactively handle any risks that your company will encounter using data you want to use.

So why should I care?

Effective governance is important because it allows an organization to manage its operations and resources in a way that aligns with its strategic goals and objectives. By putting in place clear policies and procedures, organizations can ensure that their activities are transparent, accountable, and compliant with industry and regulatory standards.

When it comes to data management, effective governance means that an organization can, at any given point in time, understand the who, what, when, where, and why of its data sets. This includes knowing who has access to data, what data is being stored and where, when data was last accessed or modified, and why certain data is being collected or analyzed.

Effective governance ensures that controls are in place to mitigate risk and keep enterprise risk within a tolerable threshold, reducing the likelihood of data breaches or other security incidents.

Cloud governance in the context of cloud computing

For a variety of efficiency, cost, and resource reasons (check out our posts about that here) computing has become a critical component of many organizations' technology stacks. However, with the benefits of cloud computing come unique challenges, particularly when it comes to ensuring security, compliance, and cost efficiency. This is where cloud governance comes in.

Cloud governance refers to the policies, procedures, and controls that organizations put in place to manage their use of cloud resources. An effective cloud governance program can help organizations ensure that their cloud environment is being used in a way that is both secure and compliant with industry and company standards. It can also help organizations optimize their cloud usage and costs, and enhance overall operational efficiency.

See below for AWS’s cloud governance framework.

Benefits of effective cloud governance

Regardless of the size of your organization, you can create an effective cloud governance that offers numerous benefits to your business.

Ensuring compliance with industry and company standards

One of the primary benefits of effective cloud governance is that it can help organizations ensure that their cloud environment is being used in a way that is both secure and compliant with industry and company standards.

For industries like finance or healthcare, which are heavily regulated, it’s that much more important to make sure that your cloud environment is secure. Having a cloud governance program allows you to answer questions about your data and its use when asked by regulators and auditors. Not having controls in place to monitor trends and governance of data usage over time can result in hefty fines and reputation damage from enforcement action.

*Source: CUBE Global,* *An Overview of Global Enforcement Trends in 2021*

Optimizing Cloud Usage and Costs

Another important benefit of cloud governance is that it can help organizations optimize their cloud usage and costs. By having a clear understanding of who is using what resources and for what purposes, organizations can identify areas where they can cut back on spending or reallocate resources to where they are needed most.

Cloud providers give you resources to effectively deploy monitoring of your cloud costs.

Amazon Web Services (AWS) Cost Management

Azure Cost Optimization Best Practices

Google Cloud Platform (GCP) Cost Management

Once you use these tools to set up thresholds for when someone gets alerted if spend gets too high - congratulations! You just set up your cloud governance program to manage your costs effectively.

What are the specific elements of effective cloud governance?

We mentioned cost monitoring and alerting above as one example of an element of your cloud governance program, but let’s talk about more specifics you generally need to have within your program.

To avoid being repetitive, keep this top of mind for each of these elements:

None of the things you set up matter unless you document the processes in place, and have someone consistently monitoring, updating, and alerting on them.

We can’t count the number of times we’ve worked with clients who have a lot of the right stuff in place, but get burned because they can’t explain it on paper when the time comes. For each of these elements, they must be backed up by regularly maintained documentation and evidence of ongoing monitoring.

Access controls and encryption

Access controls are essential for ensuring that only authorized users have access to cloud resources. Additionally, data encryption is an important step in protecting sensitive data and ensuring that it cannot be accessed by unauthorized users.

Monitoring and risk management strategy

Effective cloud governance requires ongoing monitoring of cloud resources to detect potential security incidents or other issues. Risk management strategies, such as disaster recovery and business continuity planning, can help organizations mitigate the impact of any incidents that do occur.

Compliance monitoring and reporting

So you’ve spent the resources and money putting all these controls in place and you’ll want to make sure it actually works.

Many industries have strict regulations around data privacy and security. Effective cloud governance requires ongoing compliance monitoring and reporting to ensure that organizations are meeting these regulations.

Most people want to know they’re meeting these regulations, or know what their opportunities to remediate are before auditors come knocking on your door. Proper monitoring and reporting gives you the ability to do that.

Cloud governance and size of organization

Effective cloud governance is important for organizations of all sizes, but small and large companies may face unique challenges.

Small companies:

For smaller companies, cloud governance may be less complex, but smaller organizations may also have fewer resources to devote to cloud governance. It’s important for company decision makers to provide clear direction on the rules, and empower a very small group of decision makers to implement proper strategy based on their guidance.

Large companies:

Larger organizations may have more complex governance requirements, particularly if they have affiliate arms or multiple subsidiaries. In these cases, it's important to have a centralized governance structure in place that can provide oversight and control over all of the organization's cloud resources.

Additionally with larger organizations, the opportunity for duplicative, siloed, or erroneous work to occur significantly increases. Not having automated logic and checks on your technology controls to conduct cloud governance monitoring and oversight will lead to many things falling through the cracks.

Startups:

Startups may face unique challenges when it comes to implementing cloud governance, as they may have limited resources and may be using newer cloud technologies that require different governance strategies.

Companies with extensive legacy or on-prem data being migrated to cloud:

Companies with decades of legacy data may also face challenges when it comes to migrating data to the cloud and ensuring that legacy data is secure and compliant with current standards, while prioritizing cleanup with any new business work coming at them.

Let’s wrap it up!

Effective cloud governance is essential for organizations of all sizes and types. By implementing a comprehensive governance program that includes access controls, data encryption, monitoring and risk management strategies, compliance monitoring, and disaster recovery and business continuity planning, organizations can ensure that their cloud resources are being used in a secure, compliant, and cost-effective manner.

Fortunately for you, everyone is trying to get up to speed together from our experience, and it’s much more the norm to still being figuring all of this out.

We can help you get these fast, and give you the comfort of knowing that your cloud governance program is operating effectively to reduce risk for your organization. Contact us today to learn more.

The Importance of Effective Cloud Governance