Business Glossary / Data Governance / Data Quality
Why the Same Terms Can Mean Different Things
In large enterprises, information discrepancies arise not only due to database errors or imperfect integration mechanisms.
Often, the cause of disagreements is a different understanding of the same business concepts. For example, the finance department defines an active customer as a counterparty with open business transactions. The sales department considers customers who have made a purchase within the last three months to be active. Marketing also includes potential clients who have interacted with the company in this category.
Each of these approaches can be justified for a specific business process. However, the problem arises when all three metrics use the same name – “Number of Active Customers”.
As a result, management receives several reports with different values, even though technically all of them can be generated without errors. Similar situations occur during the analysis of revenue, profitability, inventory, order fulfillment, and other corporate metrics.
It is impossible to solve this problem solely through DBMS modernization.
A unified approach is needed to define information content.
For this purpose, a Business Glossary is used – a corporate dictionary of business terms that establishes agreed-upon definitions of concepts, rules for their use, and connections with information systems.
Such a glossary becomes an important Data Governance tool and ensures a common language of interaction between business units and IT.
What is a corporate data glossary
A corporate glossary is a structured registry of business concepts used in information systems, documents, analytical reports, and enterprise management processes.
Unlike a regular list of terms, it should contain not only definitions but also information about responsibility, calculation rules, allowed values, and relationships between concepts. For example, an entry for the ‘Gross Margin’ indicator may include the name, description, formula, list of sources, responsible department, and approval date.
It is important for the enterprise that such definitions are formally agreed upon.
If the CFO has approved the methodology for calculating an indicator, analytical systems must use exactly that methodology for generating official reports.
At the same time, departments may have additional specialized indicators.
The main requirement is to clearly distinguish their names, purpose, and rules of use.
Business Glossary vs. Data Dictionary: Fundamental Differences
The terms Business Glossary and Data Dictionary are often confused, although they have different purposes. A Data Dictionary describes the technical structure of information: tables, columns, value types, keys, constraints, and other DBMS characteristics.
A Business Glossary describes the business meaning of information, independent of specific technological implementation.
For example:
| Characteristic | Data Dictionary | Business Glossary |
|---|---|---|
| Object | CUSTOMER_STATUS | Customer Status |
| Description | VARCHAR(20) | Category of the current state of customer relations |
| Allowed Values | ACTIVE, INACTIVE | Active, inactive |
| Primary User | Developer, DB Administrator | Business Analyst, Manager, Data Steward |
| Purpose | Technical Structure | Business Interpretation |
These descriptions should be linked. If the CUSTOMER_STATUS field implements the corporate business term “Customer Status”, it is desirable to maintain the corresponding link in the metadata management system.
Then, changing the business definition will allow to establish which software components and reports use the relevant information.
Similarly, technical changes can be assessed in terms of their impact on business terminology.
How to correctly describe business terms
For each important corporate concept, it is advisable to create a standardized card.
Name and definition
The name should be understandable to users and not allow for ambiguous interpretation.
The definition should explain the essence of the concept, not just repeat its name in other words.
For example, it is not enough to describe “Active Customer” as “a customer who is active”. It is more accurate to define a specific criterion: “A customer who has at least one confirmed order within the last 90 calendar days”.
This is a conditional definition that a specific company must approve according to its own business model.
Business Rules
For complex metrics, calculation rules must be documented. For example, for the number of active customers, it should be determined whether canceled orders, returns, and intercompany transactions are taken into account.
For financial metrics, it is important to separately describe the inclusion of taxes, discounts, and currency adjustments.
Responsible Persons
Each critical term must have a responsible owner. For financial metrics, this could be the Chief Financial Officer or an authorized representative of the relevant department.
For customer classification, it is the Head of Commercial Operations.
The Data Steward can provide support for description, change approval, and relevance control.
Links to Information Systems
The term card must contain information about where the corresponding indicator is used. For example, the concept ‘Goods Balance’ can be linked to ERP tables, ETL procedures, corporate DWH, and Business Intelligence reports.
This allows linking organizational definitions with technical architecture.
Hierarchies and Classification of Business Concepts
In a large organization, the number of terms can reach several thousand.
Therefore, a simple alphabetical list will not provide convenient use.
A category structure must be created. For example, the corporate glossary can contain sections such as ‘Finance’, ‘Sales’, ‘Customers’, ‘Procurement’, ‘Production’, ‘Personnel’, and ‘Logistics’.
The “Sales” section may include the terms “Orders”, “Revenue”, “Average Check”, “Sales Volume”, and “Returns”.
Individual concepts may have hierarchical relationships. For example, “Client” can be a general concept, and “Corporate Client” and “Retail Client” can be its specialized categories.
However, the classification must comply with actual business rules.
An excessively complex terminological structure that becomes incomprehensible to end-users should not be created.
Synonyms and Alternative Names
It is important to consider that departments may historically use different names for the same concept.
For example, the terms “Counterparty”, “Partner”, and “Customer” may overlap partially but are not always synonyms.
The enterprise must determine whether they describe one business object or different roles.
If synonymy is confirmed, the glossary can store alternative names.
This facilitates the search and gradual implementation of unified terminology.
Harmonization of Terms Across Departments
The most challenging part of creating a Business Glossary is often not the software, but the organizational agreement on definitions.
Different departments may have their own historically established approaches.
For example, accounting uses legal counterparty identifiers, sales uses customer groups, and marketing uses contact profiles.
Imposing a single definition on all departments is not always correct.
It is necessary to determine which concepts truly need to be corporate-wide, and which have specialized purposes.
Role of the Data Governance Council
In large organizations, disputed issues can be considered by a collegial body composed of representatives from business units and IT.
Such a committee sets standardization priorities and approves changes affecting multiple functional areas.
For example, if a company implements a unified management reporting system, it is necessary to approve common definitions for revenue, gross profit, and operating expenses indicators.
In this case, the terms must comply with the current accounting policy and corporate rules.
Role of the Data Steward
The Data Steward coordinates the support of the glossary.
They collect proposals for new terms, check for duplicates, organize approvals, and ensure documentation of changes.
It is important that this role does not turn into a formal directory administrator.
For effective work, the Data Steward must understand the subject area and have access to responsible business specialists.
Corporate Glossary in Business Intelligence Systems
The Business Glossary is particularly useful during the development of corporate analytics.
Self-Service BI allows users to independently create reports and analyze data.
However, without general definitions of indicators, the company may obtain numerous contradictory analytical models.
Semantic Models
Corporate BI platforms use semantic or business models that represent technical structures in a user-friendly language.
For example, instead of technical fields AMT_NET, ORD_DATE, and CUST_ID, an analyst works with the concepts of ‘Net Revenue’, ‘Order Date’, and ‘Customer’.
However, replacing technical names with understandable ones does not guarantee the correctness of the content by itself.
Calculation formulas and rules for using indicators must comply with the approved glossary.
Consistent Dimensions
For corporate analytics, it is important to use the same classification categories.
For example, the finance department and the sales department must be able to compare results for the same regions and organizational units.
For this purpose, consistent DWH dimensions can be used.
The corporate glossary defines the business meaning of relevant categories, while the information architecture ensures their technical implementation.
Standards for Describing Information Elements
The principles of ISO/IEC 11179 can be used to formalize corporate terminology.
The ISO/IEC 11179-3:2013 edition defines the conceptual model of a metadata registry, as well as the attributes necessary for describing information elements.
This approach allows for the separation of a concept from its specific technical representation.
For example, the business concept “Contract Signing Date” can be implemented in different systems through fields with different names and formats.
In CRM, it might be CONTRACT_DATE, in a document management system, it could be SIGN_DATE, and in an ERP system, it would be another relevant attribute.
If all these fields have the same business purpose, the corporate registry can establish links between them.
However, such correspondences cannot be determined solely based on name similarity.
For example, the document creation date and the document signing date can be different legally and operationally significant events.
Therefore, it is necessary to document the exact meaning of each attribute.
Business Glossary Support Tools
To create a corporate glossary, both specialized platforms and simpler technological tools can be used.
IBM InfoSphere Business Glossary
IBM InfoSphere Business Glossary allows you to create business terms, organize them into categories, and link them to technical information resources.
The platform supports searching and navigating between concepts.
IBM’s metadata management materials describe the use of a business glossary as a collaborative environment for aligning terminology and information responsibility.
This is useful for enterprises that use IBM InfoSphere Information Server for data integration and processing.
Informatica Business Glossary
Informatica offers tools for supporting enterprise business terminology and establishing connections with technical metadata.
Using these capabilities along with Informatica Metadata Manager allows for the combination of business term definitions with information assets and integration processes.
This is especially important for companies with a complex ETL architecture.
Custom Corporate Glossary
A small organization can start with a structured registry in a regular database or collaboration system.
For example, for each term, you can store the name, definition, responsible person, category, associated information systems, and approval status.
However, version control and change management must be ensured.
Using independent Excel files without centralized management can lead to the appearance of several incompatible dictionary copies.
Practical Example: Standardizing Metrics in a Trading Holding
Let’s consider a hypothetical holding company that unites several trading companies.
Each company uses its own ERP and management reporting system.
Management plans to implement a centralized DWH and consolidated analytics.
Discrepancy Detection
During the survey, it is found that the term “Revenue” is used with different meanings. One company includes certain tax amounts in the indicator, another uses values without them, and a third additionally considers returns according to separate rules.
Technical merging of tables will not solve the problem.
If all values are simply added, the consolidated indicator may be economically incorrect.
Definition Alignment
Financial departments agree on a single definition of corporate revenue.
A card is created for it in the Business Glossary. It documents the rules for calculation, inclusion, and exclusion of specific categories of operations.
An responsible person is also identified.
DWH Implementation
After the term is approved, data architects define the necessary transformations. For each ERP, a corresponding mapping rule is created from local metrics to the corporate model.
ETL processes perform the transformations, and the DWH stores the consistent results.
Usage in Business Intelligence
Analytical reports use the approved metric. If a user needs revenue according to the local methodology of a specific company, it must have a separate name and definition.
Thus, the enterprise gains the ability to simultaneously support corporate consolidation and specialized local calculations without mixing their content.
Corporate Terminology Change Management
Business concepts do not remain unchanged.
The enterprise can change its organizational structure, enter new markets, implement different sales models, or revise planning methodologies.
Therefore, the Business Glossary must support managed changes. For example, if the enterprise decides to change the criteria for customer activity, the new definition should not subtly alter the results of historical reports.
It is necessary to define the effective date of the new rule, the list of dependent indicators, and the procedure for recalculating historical information.
Definition Versioning
For critical terms, it is advisable to keep previous versions. For example, it can be recorded that until a certain date, a customer was considered active with a purchase within six months, and after the methodology change, within three months.
This will allow explaining discrepancies between reports from different periods.
Change Impact Analysis
Before approving a new definition, it is necessary to determine which ETL processes, analytical models, and reports use the corresponding term.
It is advisable to link the corporate glossary to the technical metadata management system.
As a result, changing a business rule will be accompanied by a planned update of software components.
Organizational Model for Glossary Support
The corporate glossary requires ongoing maintenance.
For each subject area, a terminology owner must be identified. The finance department is responsible for financial indicators, the commercial department for sales and customer activity concepts, and the production department for technological characteristics.
The Data Steward coordinates documentation and approval.
The IT department ensures the linkage of business concepts with technical structures.
It is also important to implement a procedure for approving new terms. If a department proposes a new indicator, it is necessary to check whether a similar concept already exists under a different name.
This avoids duplication of corporate terminology.
Integration of Business Glossary with BPM and Document Management
Corporate terms are used not only in reports but also in business processes.
For example, the term ‘Approved Contract’ must have an unambiguous definition. For one department, approval may mean the completion of an internal review process.
For another, it may mean the signing of the document by authorized parties.
If these concepts are not differentiated, an automated process may incorrectly determine the document’s status.
Therefore, it is advisable to link the business glossary with BPMN models, document management regulations, and descriptions of corporate operations.
This allows for the use of consistent terminology at all stages of automation.
Intecracy Group Competencies in Corporate Data Standardization
The creation of a Business Glossary is a task at the intersection of corporate governance, analytics, and system integration. IQusion IT’s focus areas in system integration, electronic document management, and BPM are important for using unified terminology in business process descriptions and application systems.
The reliable operation of the central registry and related information systems depends on server infrastructure, storage systems, and network resources – areas of Softline IT’s expertise.
Geographically distributed enterprises can use cloud or hybrid models to access information resources.
However, the definition of corporate terminology remains the responsibility of the business.
Technological tools can provide storage, approval, and dissemination of definitions, but they cannot replace the organizational decision regarding their content.
Practical Implementation Guidelines
A corporate data dictionary is an important tool for ensuring information consistency across departments. It allows for the formal definition of business concepts, documentation of metric calculation rules, and assignment of responsibility for their accuracy.
Business Glossary is particularly useful during information system integration, corporate data warehouse construction, and Self-Service BI implementation.
However, the creation of a glossary should not be limited to preparing a document with a list of terms.
For effective use, it is necessary to link business definitions with technical metadata, maintain version control, and ensure change approval procedures.
A unified corporate information architecture begins not with identical tables in different systems, but with a common understanding of what exactly the data that the company uses for decision-making means.
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