what are the benefits of business glossary

In the competitive world today, clearly defining and understanding business terms is the first step to guaranteed success. Incorrect interpretation is causing misunderstandings and increase the risk of having bad information and bad decisions. These, in turn, lead to expensive operational, marketing, sales, procurement mistakes and so on. When employees misinterpret business terms, like when they have their own different takes on the organization-wide terms such as “customer” and “product”, these misinterpretations can distort the meaning of information found in reports, data analytics results, and in the end, any business decision process. So what are the benefits of a Business Glossary? As you might imagine, there are a lot of Business Glossary benefits and reasons why an organization should invest in one, but here are 6 of them:

1. Facilitating understanding

We all carry our own assumptions on business terms based on our life and work experience and inadvertently bring them into the workplace. Maybe that’s not a problem, though. The problem is that we are not always validating these assumptions. We all think we know what a customer is, but do we really? How an organization defines “customer“, might not not be applicable for another. A Business Glossary provides a common understanding of the proper meaning and usage of business terms and even data associated with them.

2. Improving communication

The Business Glossary enables consistent communication between employees and different business units. Even between the organization and 3rd party providers of data, products, and services. Again, the term “customer” is a perfect example of this because most of the time it does not mean the same thing for Procurement, as it does for Supply Chain Management, for Sales, for Marketing, for the IT department, etc. “Employee“, “student“, “alumnus/a“, “patient“, all these words that are quite common and a natural part of our vocabulary can actually have different definitions between business units.

To give you an example from my current workplace, an alumnus/a is an “individual that graduated from a senate approved program” – That’s not the full definition, but you get the idea. So if you just finished one course or attended a few classes, you’re not considered an alumnus/a, but if you graduated from a Bachelor of Arts degree program, Medical degree program, Master of Business Administration (MBA) program,  etc., then you are one. At the same time, the Athletics department considers anyone that participated in their varsity team to be an alumnus/a, regardless if they graduated from a senate approved program or not. So if you were part of the swimming, basketball, hockey, football team, and so on, but did not graduate from a senate approved program, from Athletics’ point of view, you are their alumnus/a.  As you can imagine, without a Business Glossary, there can be some confusion when Athletics communicates with Faculty of Arts, Faculty of Medicine, Commerce, etc.

Same with “patient”. Let’s not even worry about the different medical units, but what if someone comes in for medical attention into a medical clinic and they are not being helped? While they are waiting are they considered a “patient”? There are usually metrics on “Patient Waiting Time“, so maybe yes?! What about those being treated that do not have any paperwork, nor do they exist in the clinic’s database, but they are being treated. Is that a “patient.”?

These are just some high level examples, but I think the point comes across. A Business Glossary offers the necessary information to improve communication within the organization and even outside of it.

3. Enhancing training

This is a short, but quick and fruitful benefit. Having this artifact can expedite training of new and existing employees.  Just imagine that you have a common place for trusted and curated information that any employee can refer to. Not only it is accessible, but also it is a self-serve resource.

4. Establishing ownership

When one is building the Business Glossary, or to be more exact, when one is adding content to it, establishing ownership becomes part of the process. This is one of those desired side-effects of having this artifact. How so? Well, as terms, their definitions and associated attributes are being added to the Business Glossary, someone needs to sign-off on them. Someone needs to not just verify the legitimacy of the terms and their meanings, but also approve them. That someone is probably their owner. This can be a business area lead, for example the Sales and Marketing Director that approves the entry of the term “Sale Conversion Rate“, or the Data Governance lead or an executive body such as the Data Governance Council that approves the entry for “Customer“.

Checkout the Ultimate Guide and Course on How to Create an Award-Winning Business Glossary

5. Increasing trust

One of my favorite Business Glossary benefits is that it increases trust and confidence in information. Not only that, but it reduces misuse of data due to inaccurate understanding of the business concepts and terms. How many times have you encountered the following? A programmer develops a report, then tests it (many times and different types of testing occurs), and then deploys it. The report is now launched and ready for the business to use. One end user would complain about what the data shows. There are usually 3 main reasons why the end user is complaining.

  1.  The report developer did something wrong – So there is some sort of a bug/ error in the calculations, master data matching algorithm, data conversion, data transformation, etc. It should be unlikely after different testing iterations, but it can happen. We are all humans, after all
  2. There’s a data issue – Much more likely. We all have some sort of a data quality issue, even if it’s under %0.5 error rate. 
  3.  The end user is making some wrong assumptions

Believe it or not, most of the time, the third reason occurs very often in the absence of the Business Glossary. Perhaps when the end user sees the report on “Patient Waiting Time” and doesn’t agree with the metric’s value, is because they believe it would include only those patients that already had their medical pre-check, and not also those that are just signed in. This is just an example, of course, but I am sure you can think of several others.

6. Improving productivity

Another strong benefit is that it improves productivity and timeliness of the decision-making processes.

Just think of a time when you’ve contributed to the development of a report that had some sort of metrics on “customer“. Regardless if you are a decision maker and the main user of the report, a subject matter expert, a report developer, a business analyst, and so on, I am sure you have to take part in quite a few meetings until there is clarity on what a term means, let’s say “customer“, and what those business requirements are that determine how to pull the data and represent in the report. Then the Business Intelligence team builds the report and everyone is happy (unless there’s one of those 3 issues I’ve outlined in the previous benefit). But, after 6 months, or after 12 months, when you will revisit the report or when another report needs to outline other metrics on “customer“, one needs to revisit some of the same meetings. And/ or, one needs to go through meeting notes, report requirements documents, emails, and jog their memory on what that definition for “customer” is.

Worse case scenario, another definition comes to be and now you have 2 different reports about “customer” that mean different things. Again, having a Business Glossary in place would reduce all that time spent scouring though documentation and cut back on hours of meetings in order to decide again on what a “customer” means.


It is obvious that any organization needs to clearly define this business terms as it is an important step to take on its way to success. What other Business Glossary benefits do you think it brings to the organization? If you’d like to learn more about Business Glossaries and everything these is to know about best practices in implementing, deploying, and maintaining them, check out this Business Glossary Online Course.

  • Great presentation. Perhaps you should end by saying that the data glossary alone is not sufficient for effective Data Governance but is a great first step. 🙂

    • Absolutely not sufficient, but definitely a must-have artifact to have for any data governance program.

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    About the author 

    George Firican

    George Firican is the Director of Data Governance and Business Intelligence at the University of British Columbia, which is ranked among the top 20 public universities in the world. His passion for data led him towards award-winning program implementations in the data governance, data quality, and business intelligence fields. Due to his desire for continuous improvement and knowledge sharing, he founded LightsOnData, a website which offers free templates, definitions, best practices, articles and other useful resources to help with data governance and data management questions and challenges. He also has over twelve years of project management and business/technical analysis experience in the higher education, fundraising, software and web development, and e-commerce industries.

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