Before we can answer the question of what is Electronic Transaction Governance lets define the term Governance. According to Wikipedia (http://en.wikipedia.org/wiki/Governance) , Governance is “the act of governing. It relates to decisions that define expectations, grant power, or verify performance. In the case of a business or of a non-profit organization, governance relates to consistent management, cohesive policies, guidance, processes and decision-rights for a given area of responsibility.”. Basically for business, Governance is a set of processes and best practices that assure consistent optimal operational results.
Electronic Transaction Governance deals exclusively with the processing and management of all electronic transactions (e.g. electronic payments, electronic claims, purchase orders, etc.) be it standards based (e.g. EDI ASC X12, HL7, EDIFACT, NIEM, etc.) or custom developed. The goal of Electronic Transaction Governance is to assure the proper handling, processing, and management of all electronic transactions while mitigating the risks associated with electronic commerce. Electronic Transaction Governance is composed of the following five areas:
- Standard Compliance
- Data Quality
- Risk Management
- Security Management
- Audit Trails
Standard Compliance is the first area of Electronic Transaction Governance that must be implemented in order to mitigate any processing risks and assure proper handling of all electronic interaction. Before an electronic transaction is exchanged between two parties a communication layout (message rules) must be agreed upon. Standard Compliance is the process of verifying that each electronic transaction conforms to the adopted communication layout thus assuring proper handling of all electronic transactions.
Data Quality is the area of Electronic Transaction Governance that deals with the quality of the data in the electronic transactions. It is a process where the data in the electronic transaction is verified to ensure it contains valid data. The process should verify all the fields contained in the electronic message and confirm that the data contained in them correspond to the expected values. For example, if a field should contain a contract number the Data Quality process should verify the value in the transaction corresponds to a valid contract number.
Risk Management is the area of Electronic Transaction Governance that helps minimize and deal with risk events in electronic transaction handling and processing. Electronic transaction handling and processing tasks have a large number of known and unknown risks. Some of the known risks are unavailability of satellite and core system for transaction processing. The Risk Management process should handle all known electronic transaction handling and processing risks, thus minimizing the possibility of lost electronic transactions. For unknown risks, the Risk Management process should alert of the unknown risks event immediately.
Security Management is the area of Electronic Transaction Governance that secures the electronic transaction handling and processing activities. All areas of the electronic transaction handling and processing must be secure. The electronic transaction data repositories, communication channels, and processing agents must be secure to only allow access to vetted individuals.
Audit Trail is the area of Electronic Transaction Governance that permits accountability and reporting of the complete electronic transaction process. All steps and interactions of the electronic transaction handling and processing must be saved into a central repository. These audit trails will include all necessary information to recreate the electronic transactions through each step of its processing. Detailed reports can then be prepared from the audit trail data.
If you implement all the areas of Electronic Transaction Governance into your electronic transaction processing engines you will assure no more lost electronic transactions. All electronic transactions will be properly handled, processed, and managed, while mitigating and managing the risks associated with these processes.