Guide: Data Management

What is a Data Inventory and Why is It Important?

In the past decade or two, business and successful strategies have changed significantly, but the one constant is that data continues to be a major player in determining the success and failure of any organization. 

Data is often touted as the most valuable resource for any business, which they can leverage in order to serve their customers better and also enhance their revenue. Managing this data helps businesses to further optimize operations.

Successful data management is key to any thriving business, and it can only be done with the help of a data inventory. This article covers:

What is a Data Inventory?

A data inventory, also known as a data map, is an extensive catalog of the company’s data assets. In other words, it maintains a comprehensive record of the information resources in an organization, and it helps organizations understand the data they have stored, while also identifying any loopholes or risks. By eliminating the risks, companies can actually comply with the General Data Protection Regulation (GDPR), as well as other regulations.

Data inventory also involves the collection of essential data, including its name, address, email address, and other key data. If set up and managed properly, a data inventory offers valuable insights regarding the data collected by an organization, as well as its location, access, and use.

Moreover, the data inventory also stores details about how the data is used with regards to other data, i.e. the type of data being used, who is using it, and how it is being used throughout the company. The collection of data is also known as metadata.

For more information:

Data Inventory vs. Data Catalog

Most of the time data inventory and data catalog are interchangeable terms, and they appear to be quite similar. However, they are fundamentally different.

  •  A data inventory is a technical collection of metadata that is relevant to the data storage and also specifies columns where certain data types are held.
  • A data catalog, on the other hand, is fairly less technical, and it works like a directory for data inside the company. Moreover, it outlines the people within the organization who have access to the data.


The relationship between both of these terminologies is such that a singular data point in the data inventory can be referenced in various sections of the data catalog. Apart from this, they also differ in terms of data architecture, and the way data is stored by different organizations.

Data Inventory vs. Data Dictionary

Similar to a data catalog, a data dictionary is also different from a data inventory, although the two are often used interchangeably.

A data dictionary refers to a collection of names and attributes of data elements within a database. It highlights the purposes and applications of data elements relevant to a specific project, and also offers guidance on interpretation and representation. Moreover, the data dictionary also provides metadata regarding data elements.

Data dictionaries can avoid any inconsistencies in the data elements, and also define conventions for use within a project. Most importantly, they help make it easier to analyze and enforce stronger standards on the data.

Why is a Data Inventory Important?

There are several reasons why companies need to perform and maintain a data inventory.

  • For starters, it offers data scientists, analysts and other potential data consumers a reference point for accessing and leveraging data.
  • It also allows for broad and streamlined data, and it facilitates data usage and operations.
  • A data inventory is also integral for compliance with privacy regulations. Most importantly, the GDPR requires companies to know where their critical data is stored, which in turn requires a data inventory.
  • A data inventory is also important for organizations to understand the data they collect.
  • It helps in enhancing the efficiency and accountability for all stakeholders within the organization.
  • The output from the data inventory can also facilitate better reporting and decision making.
  • Without having an accurate inventory, companies won’t be able to identify and mitigate any risks within their operations and systems.


Therefore, maintaining a data inventory strategy is highly important to gauge and reduce risk and uncertainty, by developing a checklist for compliance with security and regulation requirements. In essence, it is used to protect your data assets.

How to Build a Data Inventory?

By now, you must have gauged that building a data inventory is the next wise step for your organization, and you would want to start right away.

First, you need to conduct a deep data discovery of all your data assets or elements. This includes all data sources, including structured, unstructured, physical, and cloud data storage. This way, you will have a comprehensive picture of your data, including personal, public, and sensitive data.

If you start with data discovery, you will develop an efficient and accurate inventory of your entire data across the organization. Once complete, you can use the data inventory tool to classify and catalog sensitive data, by using data relationships, inferred data, and associated data. The resultant inventory offers a complete view of the data, as well as its ownership and attributes.

Best Practices for Building a Data Inventory

Here are some of the best practices associated with building a data inventory.

1. Inventory All Data

Make sure to inventory all of your data, regardless of where it is stored or who owns it.

2. Scan the Data

Make use of auditable data scans in order to scour the entire data and generate accurate data maps, and also validate any existing inventories in the organization.

3. Think About Scaling

From time to time, your data will continue to grow at an exponential rate, which means that your data inventory solution can handle large volumes of data, including both structured and unstructured data.

4. Increase Data Visibility

A data inventory can help you define different types of data to perform analysis and provide insights. Your data management solution should be able to provide greater visibility into the data, thus helping you leverage the data for better operations.

By now, you have a better idea of why a data inventory is important and how it can help organizations find out more about their data. If created and maintained properly, you will be able to enhance your operations and also ensure compliance, privacy, and governance.

An Effortless Continuously Updated Data Inventory With Satori

Satori provides you with a continuously updated data inventory, which is updated as data is being accessed. In addition to the data locations, the data is automatically classified, and sensitive data is discovered on an on-going basis. To learn more, read about our continuous data discovery & classification capability.

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Last updated on

February 7, 2022

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