How to build a business glossary

A business glossary is more than just a list of terms and definitions. The real benefit of a business glossary is that it can provide all the context around an asset so any user can understand what the asset is, who owns it, and how it has changed over time. By incorporating data governance into building a business glossary, organizations can create a common business language and give users the context they need to efficiently use data.

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What are the challenges of building out a business glossary?

When rolling out a business glossary, organizations need the right tools to capture relevant definitions and relationships. They also need the right people, including subject matter experts who can contribute their tribal knowledge into a system of record. It’s about bringing all the context around the data and terminology into the business glossary, so employees can use it effectively.

Building out a business glossary requires a range of skills. An understanding of key business terms and processes is crucial. It is also vital to understand how those business terms are mapped to individual data elements, and which policies are applicable. It is therefore important that organizations draw on expertise from a range of functions to support their business glossary initiatives.

Because this process is so convoluted and requires involvement from so many different stakeholders, the biggest challenge that organizations face when building a business glossary is finding a place to start. 

More often than not, organizations will try to tackle too much right from the beginning (for example, creating glossaries for multiple departments or addressing several use cases at first), but this just makes the process more complex and less scalable. The best way to address this challenge is to start small. Prioritize one use case at a time. And don’t reinvent the wheel; consider using standards such as ISO 27001 as a foundation for the business glossary.

Basics of a business glossary

Before building a business glossary, it is important to understand what it is and why organizations use them. Below are basic components of a enterprise business glossary:

  • Business terms and definitionsA list of data terms and their definitions. This may sound simple, but actually can become quite complex when different departments use the same terms to describe different concepts or different terms to describe the same concept. Having the terms clearly listed and accessible to all will facilitate communication and collaboration.
  • Reference data assets and data modelsReference data is data used to categorize other data, so it’s crucial to have reference data tied to business terms to provide context on its meaning.
  • Data governance policiesIt is indispensable to have sufficient governance around a business glossary. This will ensure that assets in the business glossary meet organizational, industry, and regulatory standards.
  • Classifications – Categories for data (such as restricted or sensitive data for personally identifiable information) that help organize terms and structure the business glossary.
  • Data lineage – Maps that delineate what data is available, where it resides, how it flows, and who uses it.

Business glossary benefits

Business glossaries are a fundamental component of data governance programs and offer a range of benefits:

Improved understanding

Probably the clearest benefit of a business glossary is that it promotes understanding by ensuring everyone within an organization has access to clear, unambiguous definitions of business terms. In addition to business terms, business glossaries can also be expanded to include:

  • Acronyms
  • Key performance indicators (KPIs)
  • Objectives and key results (OKRs)
  • Other analytics relevant to the business.

Common business language

In addition to aiding understanding, business glossaries can drive consistency in interpretations, particularly when it comes to analytical business terms. For example, a term such as “customer churn” needs to be interpreted consistently for an organization to make valid comparisons across business units.


In building out a business glossary, organizations need to find the right subject matter experts to accurately define each business term. In doing so, questions of ownership can also be answered concurrently, ensuring the right individuals are accountable for their specific domains.

Policy administration

For any large organization, it is vital to be able to set data policies at a logical level, and have those policies applied consistently across disparate physical data stores. A business glossary serves a key role within that abstraction. It allows specific business terms to be ascribed different levels of sensitivity – for example, classifying all ‘customer’ data as confidential – and ensures those properties can be applied consistently to all physical representations of those assets. 

Steps for building a business glossary

Now that you understand the basics of a business glossary, here are the steps for actually building this glossary:

1. Identify critical data elements 

A business glossary that goes across the enterprise can house thousands of elements and terms, but there is no need to boil the ocean when you are first building a business glossary. The first step of building a business glossary is identifying critical data elements. Consider using industry standards such as ISO 27001 and 11179 to identify and prioritize these elements.

2. Identify the owners and link those to the policies and criteria

Once you have identified these elements, you need to assign ownership to them. Who creates these elements? Who approves them? Who uses them and why?

3. Build out standard operating procedures

Next, you must create policies and standards around the elements. Here you should build and document processes to assure the quality and integrity of your data. At this point, you’ll see why ownership, roles and responsibilities are critical in establishing controls. Having the right experts in the room who can define appropriate thresholds allows you to avoid a “one-size-fits-all” approach that often dooms governance programs.

4. Drive adoption among the line of business (LOB)

The fourth step is driving adoption among the business users. The business glossary is only effective if people actually use it. In order to drive adoption, you must inform business users about the business glossary’s availability, educate them on how to find it and maximize its availability, and train them to follow the standards you put in place.

The purpose of a business glossary for your organization

A business glossary’s purpose is to define terminology and provide an authoritative source for the organization. All in all, organizations use business glossaries to

  • Create a shared language – Define and standardize roles, responsibilities and terms to facilitate a common understanding within and across teams
  • Promote visibility and transparency – make it easy for everyone to discover how data is used, how it’s transformed, and how to access it
  • Ensure consistency – Get everyone on the same page to facilitate collaboration

A business glossary helps organizations create a business ontology, allowing employees to understand various business terms and how they relate to each other. Organizations should build a business glossary to create a shared language around data and, therefore, enable employees to communicate, collaborate, and make meaningful data-driven decisions.

Related resources


What is a business glossary: definitions and examples


What is data governance and why does it matter?

View all resources

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