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Tag, you're it! A guide on data classification and tagging for data teams

Title reads: "Tag, you’re it! A guide to data classification and tagging." Below the text, two stylised characters appear to be sorting through various objects on a conveyor belt. One character, on the left, holds a tag, suggesting the action of tagging items. The objects resemble tokens, representing data. On the right, a bucket is positioned for collecting tagged items. The overall design has a playful, cartoonish quality and uses a limited color palette dominated by purples, blues, and orange accents.

After the recent high-profile data breaches in Australia in the last few years, the general public has very little trust in how organisations handle and safeguard their data. A recent study by the UNSW and the Consumer Policy Research Centre found that 70% of Australians don’t feel in control of their data. Understandably so. Businesses are collecting more data than ever before, but many don’t know how to use and protect this data effectively. 

It’s a simple equation. The more data you have, the higher your exposure to breaches, security risks and data mismanagement. And the more you need to do to locate, classify and secure it. As data engineering professionals, we play a critical role in this process.

Being the ‘Marie Kondo’ of data

In this article, I’ll cover some data classification and tagging best practices for data teams. We should be the data Marie Kondos of our organisations, making sure we know what data we have, where everything is stored and how to identify it.

By having teams think upfront about the nature of their data, it can encourage a more strategic and proactive mindset around data management. Otherwise we run the risk of our data lakes turning into data swamps.

And just like how our decluttering guru gets rid of things that don’t spark joy – if data isn’t properly tagged, it really shouldn’t be there!

A woman is standing and speaking in an elegant room with wooden bookcases filled with books in the background. She's wearing a white blouse and a blue skirt with a pattern, complemented by black tights. Her hair is dark and shoulder-length. She's gesturing with her hands, possibly explaining or presenting a topic. A blue water bottle is placed on the floor beside her, near a classic leather Chesterfield sofa.
Let’s be the data Marie Kondos of our organisations.(Credit: Diarmuid Greene / SPORTSFILE / Web Summit under a CC-BY-2.0 licence)

Data classification

What is data classification?

Data classification is the process of categorising data based on its level of sensitivity and importance, and any regulatory requirements. It provides a structured framework for understanding what data exists, where it resides, and how it should be handled.

Why is data classification so important?

Data classification is a must for the following reasons.

The image is an informative graphic titled "Why is data classification important?" with a dark blue background and four key points highlighted in colorful icons and text.  "Security" is represented by a shield with a checkmark, indicating the importance of applying the appropriate level of controls based on data sensitivity. "Efficiency" is symbolized by a clock, suggesting that operational data that can be tagged and searched easily leads to optimized processes. "Compliance" features a shield with stars around it, emphasizing that legal and regulatory standards such as the GDPR are applicable to data for businesses with an EU footprint. "Cost control" is illustrated with a dollar sign and a downward arrow, stating that knowing data retention and retrieval needs helps businesses to be strategic about storage costs. In the bottom right corner, there is a logo with the text "CLOUD SHUTTLE" and a graphic element resembling a cloud with a shuttle. The layout is clean and uses a mix of purple, orange, green, and white to create a visually engaging and educational design.

  • Security: Properly classifying data allows for the right level of security controls to be applied depending on how important and sensitive the data is to the business. Sensitive information needs to be appropriately masked and only accessed by authorised users.

  • Compliance: Legal and industry requirements around data compliance are becoming more stringent. At the minimum, Australian businesses have to comply with data protection laws in Australia such as the Federal Privacy Act and any state-specific legislation. Depending on your global operational footprint and nature of your data, you may have to comply with other standards, such as the GDPR in the EU and the California Consumer Privacy Act (CCPA) and Health Insurance Portability and Accountability Act(HIPAA) in the USA.

  • Efficiency: Knowing what data you have helps your business to be more efficient. For example, with data tags, development teams can track changes on different environments (prod, test, dev). Operational data can be analysed for insights to optimise processes. Operations teams can search through data easily and use it for monitoring and detecting anomalies, minimising time lost to outages.

  • Cost control: Understanding and classifying your data has cost advantages too. The most sensitive data needs additional protocols and encryption which will cost more. This level of security wouldn’t be needed for public or less sensitive data. Understanding how long data needs to be retained can help your business make strategic decisions around how to tier your data storage to reduce redundancy and save costs.

How should data be classified?

The following questions are a helpful starting point for the data team to ask at the start of any project, or when doing an audit of an organisation’s overall data strategy.

  • Source: What are the APIs, applications, databases, etc. that data is coming from?

  • Sensitivity: How sensitive is the data – what would be the impact to the business if this data was exposed? Do any compliance standards apply to how this data is handled? Who is allowed to access this data?

  • Availability: How available does the data need to be? Does it need to be retrieved instantly or is it archival data that isn’t time-critical?

  • Retention: How long must the data be retained? Generally, businesses should not hold onto data longer than they need to.

At the very minimum, all organisations, no matter the size of the business, should apply three levels of data classification.

The image is a visual representation of data classification levels, with a title "Data classification levels & examples" at the top. There are three colored blocks, each indicating a different level of data classification:  The first block is blue with the label "Public," and gives examples like website pages, press releases, and social media content. The second block is purple and labeled "Private/internal use," listing examples such as job descriptions, process manuals, team wikis, and company memos. The third block is red and marked as "Confidential," with examples provided including PII, credit card information, medical records, trade secrets, and authentication information. At the bottom right corner of the image, there's a small logo that combines a cloud and a flying shuttle, accompanied by the text "CLOUD SHUTTLE." The graphic is laid out on a dark purple background, and the text is white, making it stand out. Each classification level block is rounded and the layout is clean and straightforward for easy reading.

  1. Public: This refers to any information that is freely and publicly available, such as public website pages, press releases, and social media assets on company channels.

  2. Private/internal use only: Any information that should be for internal use only, and also does not contain any restricted data. For example, internal company documents, team wikis, process manuals, company-wide emails and memos. 

  3. Confidential: Highly sensitive information such as financial information, credit card information; Personally Identifiable Information (PII) such as medical records, driver’s licence numbers and home addresses; or protected IP such as trade secrets. This also includes data used for authentication, such as encryption keys, hash tables, and so on.

The data in level 3 has additional security and compliance requirements beyond the data in the first two levels. If data falls into two or more categories (for example, company financial statements), it’s best to err on the side of placing it in the higher category. 

Data tagging

What are data tags?

Data tags are metadata labels that add context and meaning to your data. In short, data about data. 

They take the form of key-value pairs, which consists of two elements: a key, which is constant and applies to a data set (e.g. location, age, department) and a variable value that belongs to that data set (e.g. Australia, >30 years old, Marketing).

What data tags should my team apply?

Of course, every organisation will have unique tagging requirements based on their business logic, but for general data management, my recommendation is that data teams should apply the following tags at the very minimum:

The image presents a graphical list titled "Essential tags for data management," indicating that the tags listed are the minimum requirements recommended for data teams for the purpose of data management. There are seven tags, each represented by an orange tag icon with white numbering and text, linked by a blue line with white ring connectors, resembling a series of labels on a loop.  "Environment" tag with examples like dev, test, prod, staging. "Application Source" tag with examples such as CRM, website, form. "Replication type" tag with examples like stream, incremental, snapshot. "Geography" tag with examples such as Australia, APAC, EMEA, ANZ. "Domain" tag with examples like sales, marketing, finance. "Data sensitivity" tag with examples like public, internal, confidential. "Data owner" tag indicating the person or team responsible for decisions on the data. The Cloud Shuttle logo, a combination of a cloud and a flying shuttle, is placed in the bottom right corner. The background is dark blue with a grid pattern, and the overall design is bright and informative.

  • Environment: e.g. dev, test, staging, production 

  • Application source: e.g. CRM, web application, website form, etc.

  • Replication type: stream, incremental, snapshot

  • Geography: e.g. Australia, APAC, ANZ, EMEA, etc. (as mentioned before, your data management processes must be compliant with the regulations of the region you have a footprint in)

  • Domain: e.g. product, sales, marketing, finance

  • Data sensitivity: e.g. Public, internal, confidential

  • Data owner: the team/individuals responsible for decisions on the data.

Best practices for data tagging

OK, so now that we know the importance of classifying data, how do we go about implementing an effective data strategy? This requires collaboration with various departments across the business and a consistent approach. 

I recommend the following steps:

  1. Collaborate with stakeholders: In addition to the tags I’ve recommended above, engage with business stakeholders to understand their use cases, as this will inform additional tagging requirements.

  2. Define a tagging framework and governance: Establish what tags are mandatory and which ones are optional. Work on standardising naming conventions and how to reconcile variables (e.g. in spelling, abbreviation, capitalisation and variations in how teams understand and apply terms). Create guidance around deleting or creating new tags and how to enforce tagging.

  3. Implement tagging: Apply tags to all incoming data consistently so the data is relevant and accurate.

  4. Improve and iterate on tagging strategy: Build in periodic checks (e.g. annually or every 6 months) to review and refine your tagging strategy based on feedback or business needs. As the business evolves, so should your tagging strategy.

Example: Data tagging in action

Let's illustrate the concept of data tagging with a practical example using Snowflake.

The image displays a code snippet on a dark background, typically indicative of a code editor with syntax highlighting. used for defining resources in a Snowflake database, a cloud data platform.  The snippet includes three resource blocks: The first block defines a Snowflake database resource with the name "analytics_db". The second block defines a Snowflake schema resource named "analytics_schema" which is associated with the previously defined database "analytics_db". The third block defines a Snowflake tag resource named "department_tag" with allowed values "sales", "marketing", "finance", "engineering", "hr", "admin". This tag is associated with both the "analytics_db" database and the "analytics_schema" schema. The text colours are white, green, purple and blue, distinguishing different elements of the code such as resource names, properties, and values. The window controls (close, minimise, maximise) are visible at the top left corner, suggesting that this is a screenshot from a macOS user interface.

In the example above, we first define a Snowflake database resource named "analytics_db", representing a database where analytical data is stored. This database will serve as the foundation for our data tagging operations.

Next, we define a Snowflake schema resource named "analytics_schema" associated with the "analytics_db" database. This schema represents a logical grouping of tables and objects within the database, providing a structured environment for our data.

Finally, we define a Snowflake tag resource named "department_tag" with the name "department". We specify that this tag is associated with the "analytics_db" database and the "analytics_schema" schema. We define the allowed values for this tag, which are "sales", "marketing", “finance”, “engineering”, “hr” and “admin”. Any data tagged with the "department" tag must draw from these values. We then associate the tag ID with the particular object, which in this case is the database.


Just as Marie Kondo transforms chaotic spaces into calm sanctuaries, data professionals can champion best practices in classification and tagging to bring order to our organisations’ data.

Classifying and tagging data is a simple but powerful prerequisite to ensuring that it is accessible, secure, actionable and cost-effective.

By keeping our data watertight we can help our colleagues perform their jobs better and focus on innovating. And in turn, we’ll bring a lot more joy and less stress to our day-to-day lives.

At Cloud Shuttle, we can help you with categorising and tagging your data for optimal accessibility and compliance. Reach out if you want to uplift your team’s data cataloguing capabilities and enable your business to make blazingly fast and informed decisions.


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