The Data Governance Challenge in CRM: Compliance, Quality and Risk

Information in customer relationship management (CRM) systems can be compliant, useful, trustworthy and secure —but only if organizations govern it properly. Yet 91% of tech leaders across organizations still struggle with data governance, according to PwC’s 2024 report. 

To help you manage CRM information effectively and safely, this guide defines data governance and explains what makes it challenging in CRM. You can also discover how to implement governance effectively in your CRM solutions. 

What Is Data Governance in Customer Relationship Management? 

CRM data governance refers to the policies and procedures that ensure customer data in CRM systems is accurate, secure, consistent and compliant throughout its lifecycle. It determines how people manage and access CRM information throughout your organization. 

CRM data governance focuses specifically on customer-related information. Examples include:

• Leads or potential customers
• Contact details
• Customer relationship data, including current and previous interactions 
• Purchase records and customer loyalty scores
• Customer satisfaction surveys

Key Elements of Effective Data Governance in CRM

Successful data governance typically focuses on four main components. Together, they help organizations maintain accurate and compliant customer data while reducing regulatory and cyber risks.

1. Data Quality

Data quality involves making sure CRM information is accurate, complete, consistent and up to date. Issues with the quality of data can cost organizations millions every year. 

2. Data Security 

Sensitive customer information in CRM systems, such as contact details, makes data security a top priority in governance. This component of governance helps you protect confidential CRM data from unauthorized access. 

3. Data Compliance

Organizations must manage customer data in accordance with applicable regulations. Typical compliance requirements are related to: 

• Data privacy
• Consent management
• Customer data access requests
• Retention and deletion timeframes

With CRM data governance, you establish internal controls necessary to meet legal obligations. As a result, you can avoid regulatory fines, which cost U.S. organizations over $50 billion annually, according to Good Jobs First. 

4. Data Ownership

Data ownership is about assigning roles and responsibilities for managing and protecting customer data. The goal is to promote accountability in data governance. 

Common Challenges in CRM Data Governance

Data quality and compliance issues are the main governance challenges in customer relationship management. By addressing them, you can manage your CRM information more effectively.

Inconsistent Data Entry Standards

Multiple teams, including sales and customer service, often handle customer data using department-specific tools and workflows. Without organization-wide data entry standards, teams may use varying formats for names, dates, addresses and abbreviations to record data in their tools. 

These inconsistencies make it difficult to retrieve and sort customer information across systems. And extensive data cleaning, which involves fixing inaccuracies and inconsistencies, becomes necessary before integrating information from different teams into the CRM platform. 

Undefined Data Ownership

An organization that lacks clear data ownership fails to assign individuals or teams data management responsibilities. That means no one is accountable for: 

• Enforcing data quality standards, such as accuracy and completeness
• Controlling access to sensitive CRM information
• Resolving conflicting versions of the same CRM data
• Ensuring compliance with data privacy and security regulations

Unlimited or Unauthorized Access to Sensitive Customer Information

If you don’t control access to sensitive CRM data, some employees may view confidential customer information you don’t want them to see or that they don’t need to do their job. Excessive, unauthorized access increases the risk of insider-related security incidents and can compromise the entire customer journey across touchpoints.. 

Weak Compliance Controls

Modern organizations must comply with a growing number of privacy and data protection obligations. Staying compliant is difficult if organizations fail to: 

• Document compliance policies comprehensively and make them readily accessible to all relevant parties in CRM
• Implement internal controls consistently across departments that handle customer data
• Stay on top of regulatory changes and adjust internal controls 

Incomplete or Missing Audit Trails

Audit trails record user actions in CRM systems for accountability. They show you: 

• Who accessed customer records
• What changes they made or actions they took
• When they made those changes

Without clear audit trails, it’s difficult to investigate data breaches and demonstrate compliance during regulatory audits. It’s also hard to track CRM user activities and customer interactions in real time. 

Poor Balance Between Personalization and Privacy Requirements

BCG’s research found that four-fifths of customers are comfortable with and often expect a personalized experience when interacting with brands. Delivering a tailored customer experience requires organizations to collect, store and use personal data. However, it’s important that customer information is used to support personalization without violating privacy expectations, consent agreements or regulatory obligations. 

How to Implement a Data Governance Framework Effectively in Your CRM Software

A data governance framework is a set of best practices for setting up and improving information management in your organization. Popular frameworks include: 

• DAMA Data Management Body of Knowledge (DAMA-DMBOK)
• DGI Data Governance Framework
• Data Management Capability Assessment Model (DCAM)

Regardless of the model you use, the implementation process is largely the same. Here are the main steps to follow. 

1. Establish Data Standards

Create rules that determine how teams in your organization format and record information in the CRM system. These standards promote consistency and accuracy in data entry. Examples include: 

• Standardized date formats, such as DD-MM-YYYY
• Mandatory fields to create a record in the CRM system, such as email address and customer name
• Official abbreviation rules to promote consistency
• Validation rules that minimize data entry errors (e.g., email addresses must contain @, postal codes must match country format)

2. Define Roles and Responsibilities

Determine who’s responsible for data governance tasks. You can assign roles to individuals or departments to promote accountability. Key roles include: 

• Data owners are usually senior leaders in specific departments, such as the VP of Sales or the Chief Marketing Officer. Their responsibilities include determining who can access data and how the information must be used to ensure compliance. 
• Data stewards are technical or operational subject-matter experts. Operational stewards, such as data analysts and business analytics specialists, ensure CRM data meets quality standards. Technical stewards, such as IT specialists, enforce rules governing how data can be used. 
• Data users are authorized individuals granted access to CRM data to perform their jobs within their departments, such as a representative managing your sales pipeline.  

3. Implement Access Controls

Make sure CRM data users interact only with the information they need for their roles to prevent unauthorized access and comply with data security requirements. Common access control approaches include: 

• Role-based access control: Granting CRM system permissions based on job function
• Least-privilege access: Giving users the minimum access permissions required for their responsibilities

4. Create Data Retention and Deletion Policies

Establish data retention and deletion rules based on applicable regulations. For example, the General Data Protection Regulation (GDPR) requires organizations to retain personal customer data only for as long as it’s needed to fulfill its original purpose. The California Consumer Privacy Act (CCPA), on the other hand, requires businesses to delete personal information upon a customer’s request. 

5. Monitor and Audit Internal Controls Continuously

Track your compliance policies and procedures continuously to assess their effectiveness over time and make any necessary adjustments. Most importantly, update them to meet any applicable regulatory changes. 

Improving Governance and Compliance With Onspring

Onspring’s governance, risk and compliance (GRC) platform can make CRM data management more manageable. Having a centralized location for mapping governance policies and regulatory requirements makes it easier to stay on top of compliance. 

The software’s artificial intelligence capabilities and automation tools reduce manual effort and entry errors in data management. You can also track user activities in the platform with detailed audit trails. 

Ready to strengthen your CRM governance? Onspring’s GRC platform centralizes policy mapping and regulatory requirements tracking to support continuous compliance. Book a demo today.