Top Reasons Why Data Lineage Is Important For A Business

What is data lineage and why does it matter?

17May

What is data lineage?

Put simply, it is the origins and transformation that data goes through with time. The best way to understand the concept of data lineage is to think about a family tree. Having a family tree means that you know family relationships. You need to know where you come from and who your ancestors are really. A person’s family lineage can prove to be a source of valuable information for you. How? Not only does it provide you with more knowledge about your origin, it contributes to genealogy, helps you discover the death and birth rates in the family and can also be useful in identifying your medical history. While the latter is a secondary benefit of knowing your family lineage, it can have huge benefits.

The same rules apply to data lineage. Data lineage is actually a store of a wealth of information, but it can be difficult to find at times. It is an arduous task to trace data sources. Large businesses were created with systems a few years ago and in their desire to keep up with technology, they rapidly continued to acquire data sources. Now, the different sources of data have interacted with each other and the systems are now bound together. The problem is that it is difficult to understand the complicated data maze and get a simple visual flow. This is where data lineage has to be tracked and it can play a vital role in a business’s operation. Why? Here are the top reasons:

1. The first area where data lineage has its impact is the existence of the business itself. This is because data is crucial for an organization’s survival ability. The individual departments and functions of a business work with the fuel that is data. For instance, the marketing department considers the demographics and customer behavior for setting sales forecasts and the CEO also makes decisions based on the growth and performance statistics of a business. If there is no data, all these functions are rendered irrelevant. Therefore, it makes sense for a business to have a clear understanding of where the data is coming from, who is using it and how it is transformed.

2. Data lineage is also important because specific sources of data can have prominent implications. For instance, when IT teams are starting a new software development process, they will need to understand the requirements. This means they have to know about the data sources they will have access to. Locating data sources can be immensely difficult without data lineage. Therefore, a lot of businesses often use a data lineage tool for extracting data. If they don’t, they have to create new data, which doesn’t just need extra time but also leads to added expense. 

3. Last, but not the least, data lineage is important because of the data for most organizations changes on a yearly basis. One way that it can change is that you have begun to accumulate different types of data, either in the form of product or customer data that hasn’t been collected previously or in the form of data you have bought from other sources. It is also possible that your internal data analysts have come up with ways of deriving new insights from the data you already have. This innovation could be helpful for management in making decisions or for generating a new revenue stream.

Thus, when a business gets insight into data lineage, it is able to stay updated with the changing data environment that has a lot of impact on its operations and can practice data governance

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