How to Use Taxonomies and Ontologies to Improve Data Governance and Compliance

Have you ever wondered how some companies manage to keep their vast amount of data organized and compliant with regulations? As data grows in size and complexity, managing it can become a Herculean task, especially for companies with various data sources.

Fortunately, taxonomies and ontologies can help you categorize, store, and manage data in a way that improves governance and ensures compliance. In this article, we’ll dive deeper into what these two terms mean and learn how you can apply them to your data management strategy.

What are Taxonomies?

Have you ever used a library catalog or a classification system in a retail store to navigate their products? That’s an example of a taxonomy in action. In simple terms, a taxonomy is a hierarchical classification system used to organize and group objects or concepts.

In the context of data management, taxonomies are used to categorize data by assigning it to pre-determined categories or classes. They help create a common language and structure that everyone in an organization can understand and use when working with data.

For instance, a company dealing with customer data might create a taxonomy that classifies customers based on their location, age, gender, and other demographics. This classification system will help the company organize data in a way that is useful for business decisions and extract insights from it.

What are Ontologies?

Ontologies are similar to taxonomies, but they take things a bit further. While taxonomies classify data into categories, ontologies describe how those categories are related to each other. They define the relationships between various elements in a classification system.

To create an ontology, you need to define a set of rules that describe how different entities in the system are connected. This includes the activities, properties, and relationships.

For example, let’s say you are building a knowledge management system for a company. You could create a taxonomy that classifies all documents based on their type, format, and date created. However, this wouldn’t give you much insight into the content of each document.

An ontology, on the other hand, would allow you to capture the relationships between various documents. You could define a rule that links similar documents or those that have been edited by the same person. With this information, you can start identifying patterns and making better decisions.

What are the Benefits of Using Taxonomies and Ontologies?

Now that we know what taxonomies and ontologies are, let's see how they can benefit your organization.

Improved Data Quality

When you use taxonomies and ontologies, you create a standardized way of organizing data. This improves data quality because everyone in the organization speaks the same language and understands where each data piece belongs.

Enhanced Data Governance

Taxonomies and ontologies also help to enhance data governance. With clearly defined categories and relationships, it is easier to track data changes and make sure that each data point is accurate and relevant to your use case.

Better Compliance

For companies dealing with sensitive data, compliance is essential. Taxonomies and ontologies help achieve compliance by ensuring that data is properly classified and that access controls and policies are enforced.

Improved Business Decisions

By organizing data into categories and defining relationships between elements, taxonomies and ontologies provide a framework for data analysis. This makes it easier to extract insights and make better business decisions.

How to Use Taxonomies and Ontologies to Improve Data Governance and Compliance

Hopefully, by now, you are convinced that taxonomies and ontologies are useful tools for organizing and managing data. Let's see how you can use them to improve data governance and compliance.

Step 1: Define Your Taxonomy and Ontology

The first step in using taxonomies and ontologies is to define what they will look like for your organization. This involves identifying the categories and relationships that will govern your data management.

If you already have an existing taxonomy or ontology, you can evaluate it to ensure it aligns with your organization’s current needs. Otherwise, you can start from scratch.

Step 2: Assign Data to Categories

The next step is to start assigning your existing data to the categories you have defined. This could be a manual process or involve automated tools, depending on the size of your data collection.

While assigning data, make sure that each data point maps to a specific category and that you are not creating overlaps. For example, if you have a customer who is both a “Premium” and a “V.I.P.” customer, you need to decide on one category to avoid future confusion.

Step 3: Define Relationships

After you have assigned data to categories, it’s time to define relationships. This involves establishing the connections and rules around how the categories are interrelated.

For instance, you can define that a “Premium” customer spends more than $10,000 per year and that a “V.I.P.” customer is a “Premium” customer who has been with the company for more than five years. With these rules in place, you can use them to make better business decisions.

Step 4: Enforce Access Controls

With your taxonomy and ontology in place, it’s time to enforce access controls. This means ensuring that only authorized personnel have access to each category of data.

By restricting access to certain categories, you can prevent unauthorized personnel from changing the data or using it in unintended ways. This helps to ensure compliance with data protection laws and regulations.

Step 5: Maintain Accuracy and Relevance

Lastly, it's essential to maintain the accuracy and relevance of your data. Taxonomies and ontologies are not set in stone and need to be updated when necessary. This means that you should review your existing classification system regularly and make changes as needed.

You should also ensure that you are using the categories and relationships for their intended purposes. Don't let data accumulate in categories that are no longer relevant to your business needs.


In conclusion, taxonomies and ontologies are powerful tools for improving data governance and compliance. By organizing and categorizing data into defined categories and relationships, you can ensure that you are using the right data for business decisions while keeping it secure.

If you are struggling to manage your organization's data or want to improve your data governance strategy, consider using taxonomies and ontologies. With these tools, you can make more informed decisions, ensure compliance, and stay on top of your data management needs.

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