What is a Business Glossary? Definition, Examples, Template

What is a Business Glossary? Definition, Examples, Template

Before I dive into what a business glossary is and how best you can develop one for your organization, I want to use a famous example that shows the consequences of what happens when terms and definitions aren’t universally understood.

When Elon Musk decided to proceed with his plan to acquire Twitter for $44 billion, the deal almost fell apart because of a single metric. When examining monetizable daily active users (mDAUs), Musk questioned Twitter's calculations that claimed just 5% percent of users represented fake accounts—which couldn't be monetized. Musk predicted this number to be much higher.

When Twitter provided information regarding the methodology they used to calculate this metric, it transpired that the company was using survey data from just 100 respondents, five of which turned out to be fraudulent accounts. So what went wrong? While the term mDAU was standardized, the definition needed to be clarified, not every party concerned had a say in how the metrics were calculated, and at least one concerned party felt the methods for obtaining the data needed to be revised.

Organizing business terms and establishing a standardized model for how business users reference and define them can be a significant pain point for companies. A business glossary is an efficient, scalable, and reliable way of curating and standardizing critical business terminology for every stakeholder in an organization. That's why it has become crucial to every comprehensive data governance strategy. 

Definition of a Business Glossary

Non-standardized business terms are a huge problem for companies, especially as the number of data sources and applications used by different departments grows. Business users can't work independently or collaborate on analytics tasks when there is no cohesion because the risk of flawed data is too high. And the fallout from skewed data can significantly impact brand integrity, data adoption, and compliance commitments.

A business glossary is a tool for curating your business terms and providing standardized definitions. With this authoritative source, users can rest assured that they have the right business terminology at their disposal. Curating a business glossary has become an essential part of every forward-thinking data governance strategy, and as such, there are a series of tried and tested steps that lead to the development of a reliable business glossary framework.

Simplified business glossary example in OvalEdgeSimplified business glossary example in OvalEdge

Related Short Video: How Business Glossary Works?

Why Do You Need One?

Standardized business terms enable communication and collaboration within an organization. When communication channels are lacking in breadth and accessibility, the results can be damaging, especially if you are committed to developing a data-driven culture in your company. I recently read a 2018 report by The Economist that found that 44% of respondents cited communication barriers as leading to delayed or failed projects, 31% said it led to low morale, 25% said it caused them to miss performance goals, and 18% lost sales.

When everybody in an organization uses the same terms and definitions determined by a business glossary, analytics are streamlined and trustworthy, helping to drive successful innovations and consequently boost data literacy. Furthermore, users have the exact source of reference so they can communicate more efficiently about business matters and collaborate on data assets with confidence.

Related Video: How a Business Glossary can help with Data Literacy

Beyond this, a business glossary enables control over high-risk business processes, such as regulatory reporting or profit and loss statements. In practice, if one department is using the term “paid” to describe a fulfilled invoice while another uses “PD,” it would be impossible for that organization to accurately determine profits based on the raw data.

I’ve seen first-hand how pressure on data teams and the complexity of data management tasks are alleviated when an active business glossary is in place because users have direct access to a trusted source and can independently search for business terms. Furthermore, the process of building a business glossary establishes ownership of data assets, a key function of data governance. When you know who owns the data in your organization, it's easy to coordinate updates when any changes are made to it, helping to ensure ongoing data quality.

Related: Building a Business Glossary 

Business Glossary vs Data Catalog

A data catalog pulls in all your metadata so you can quickly find, explore, and utilize data assets, regardless of where they originate from in your data ecosystem. Conversely, a business glossary contains critical information about how the terms that describe this data should be understood. While these are two fundamental differences, there are some similarities.

Both a business glossary and a data catalog facilitate collaboration. While a business glossary enables this by ensuring everyone is on the same page, a data catalog makes data from every department universally available dependent on access permissions. Furthermore, both data governance tools enable self-service, an important outcome of the data governance process that alleviates IT and Data teams' financial and time burdens.

Simplified depiction of the OvalEdge data catalogSimplified depiction of the OvalEdge data catalog

Business Glossary vs Data Dictionary

It's easy to confuse a business glossary with a data dictionary, but they are two different data governance tools with unique use cases. The easiest way to separate them is by their intended audience and function in your wider data governance and management strategy.

While a business glossary is designed to support user understanding of business terms in a business context, a data dictionary is built to provide databases with specific definitions to understand and organize data assets. A data dictionary ensures data collection is consistent, regardless of where the data originates from, and supports various data processes like lineage building, access management, and data mapping.

Who is Responsible for Building a Business Glossary

The responsibility of building a business glossary is one that spans the breadth of the organization. While at the top of the pyramid, your data governance group, who is also a key part of your overall data governance framework, will be responsible for the process. Regular business users are required to provide the answers to survey questions and determine which business terms are in use.

This collaborative effort is crucial to understanding the terms in your organization that have the most significant impact. This terminology will characteristically include terms most often used, terms that are used for regulatory reporting, and terms that are most frequently cited in business operations.

Business Glossary Template

It's important to have a business glossary template when building a business glossary for your organization. In the template, various fields constitute a full, standardized view of your business terms. These fields should include business definitions, related or associated objects, detailed descriptions, origin, data ownership, and more.

However, this is just the basic framework required. Beyond this, a template should include the necessary actions to develop a business glossary inclusively and acknowledge the requirements of all stakeholders. Organizations must consider the users impacted by the term and consult them in deciding how the term is defined, the formulas used to calculate it, and methodologies for incorporating changes.

Business Glossary Template

Need help building a business glossary? Download our free Business Glossary Template (pictured above)

How to Build a Business Glossary

There are four core stages to building a business glossary.  First, organizations should create a data governance group to oversee standardization.
Next, determine where and how business terms are used and who uses them. The third step is to identify and consolidate the critical terms being used. Finally, standardize the definitions for the terms and input them into, the business glossary.

As a bonus stage, socialize the results so everyone can stay updated on the proper use of your organization’s critical terms.


Building a business glossary creates curated, standardized definitions for the organization’s critical data elements. It enables communication and collaboration within the organization where people can utilize self-service with confidence.

The efficiency, reliability, and scalability of a business glossary makes it an essential element of every comprehensive data governance strategy.

What you should do now

  1. Download our free Business Glossary Template.
  2. Read our blog on how to build a business glossary.
  3. Schedule a Demo to start building your business glossary with OvalEdge.
  4. Increase your knowledge on everything related to Data Governance with our free WhitepapersWebinars, and Academy.