Part 3 in the three-part Universal Journal series.
Data is a fundamental cornerstone of modern business strategies. Organizations that know how to collect, process, and analyze massive quantities of information are better-suited to deal with the changing, unpredictable business landscape. Conversely, those organizations with poor data governance will face greater struggles in the marketplace, from higher costs and longer delays to devastating data breaches.
Even though you may already have an infrastructure to capture data in place, that doesn’t necessarily imply that the data you have is high quality. If you’re using bad data to make strategic business decisions, you need to know right away. The four indicators below are common signs that you have major issues with your data.
1. You’re entering data manually
At this point, companies that still rely on manual data processes like emails and spreadsheets are needlessly exposing themselves to higher amounts of error as a result of typos, forgetfulness, and omissions. According to a 2008 study at the University of Hawaii, 88% of non-trivial spreadsheets contain at least one mistake.
Not only does manual data entry open the door for human error; it also has broader repercussions on your business. Manual data entry wastes the labor of employees who could be spending time on higher-level activities better suited to their skill level.
2. You’ve built data silos
As organizations trend toward greater flexibility and collaboration, data silos have become the target of attack. Silos occur intentionally or unintentionally when a given department or division preserves its data internally, refusing to share the data with others or remaining quiet about its existence.
Data silos were born out of the idea of division of labor but are now seen as isolationist and harmful. Silos make it difficult or impossible to access updated, accurate data from multiple locations, departments, or systems. As a result, certain sectors of the organization are left in the dark without being able to see the full picture, ultimately harming their decision making.
3. You have to wait for reports
Data analytics is a crucial aspect of modern business strategic planning. It helps you understand your company’s performance in the past so you know how to improve in the future. If your organization is plagued with bad data, however, then it’s likely that the analytics reports you need will be delayed or even nonexistent.
These delays may stem from a variety of causes – from analysis paralysis to a lack of tools or employees for data analytics and the data silos mentioned above. But all of them are warning signs about your data quality. What’s more, once the reports finally arrive, they may have been extracted directly from data warehouses, requiring non-technical managers and executives to decipher them on their own.
4. There’s no single version of the truth
Having a single version of the truth means that all of your organization’s data is unified within a single centralized repository. It’s true that creating a single version of the truth is an ideal that may not be achievable – but some companies stray very far from this ideal.
The more distributed your data is, scattered across files on multiple systems, the more likely it is that this data is out-of-date, incorrect, or redundant. Preserving the consistency, accuracy, and freshness of this data becomes a greater challenge, forcing employees to spend time on a task that they weren’t hired for.
These signs are not uncommon in modern businesses. What is uncommon is to have a solution. This means working on data that is automatically updated from other areas of the application. Finance leaders with in-memory analytics enjoy an additional advantage – being able to report on, and interrogate, all line items and ask the database any question at any time.
If you would like to know more, discover how finance leaders are driving performance and transformation.
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