Critical Business Data- Measuring What You Manage
Your critical business data provides business insights into operations and emerging new business opportunities.
Peter Drucker, a respected management consultant, is quoted as saying. You cannot manage what you cannot measure. This applies to most business issues and certainly toward data governance. Theresa Kushner and I have published various articles on Latin Business Today about the importance of managing your critical business data, including customer and account contact information, financial information, and product and service information.
Your company’s business data is not just a byproduct of your IT systems but rather it represents the company to your employees, suppliers and customers as well as your internal systems and business processes. Your critical business data can also provide insight into your operations and how to improve them using big data analytics, an emerging new business opportunity.
Like your organization’s other valuable assets, critical business data must be managed to ensure it is meeting the needs of the company and all of its stakeholders.
Critical Business Data -What to Do
Many organizations are unsure which metrics to track to ensure the company is governing this asset correctly. Let me offer some suggestions.
First, let’s assume you have implemented a data-governance program, as we have suggested in previous articles. Your most important business data has been identified and classified, and responsible owners have been named to oversee the data. So for example, for customer account and contact data the most important fields could be company name, address, Dunns number, industry code, contact email and privacy opt-in flag.
For each of the six fields of your critical data, measure and monitor:
- Completeness: Are all required fields in place?
- Consistency: Is the same business data used consistently across the company (i.e., are definitions, formats and formulas the same)?
- Accuracy: Is the data accurate does it represent reality?
- Timeliness:Is the data timely does it arrive when it needs to arrive and get to downstream processes when it needs to?
- Process efficiencies:Measure the time it takes to create and update the fields in your systems.
- Total Cost of ownership:What does it cost to buy and maintain this data?
How to Track It
Measure these dimensions monthly, starting with an accurate baseline. Establish targets that support the business processes for which the data is being used. If there is a variant to the target, a corrective improvement program is established by the respective owner. The monthly metrics reports will provide status on whether the improvement programs are working.
Tools from software vendors exist that automate profiling, data quality and reporting. These tools can automate the initial baselining as well as the monthly collection and reporting of the metrics. Many vendors also provide cloud services to help you get started profiling your data and establishing the business case for further investments.
However, don’t let the lack of software tools deter your efforts. You can also get started with a simple spreadsheet solution, sampling the records in your system where this data resides.
Reaping the Rewards
Companies that measure their critical business data and take corrective actions to address the gaps have seen tangible business benefits. The time employees take to correct erroneous information is reduced, making them more productive and able to spend more time with customers. Your marketing campaigns will be more effective, because the customer information is accurate. Internal business processes will be improved due to less rework caused by data errors.
Buying more contact data from data vendors will be reduced because the contact data in your systems is accurate and useful so it does not require additional enrichment. Even days sales outstanding (DSO) is improved due to accurate customer addressees for invoicing. The sooner you get started the sooner you can reap these benefits in your company.
Related content:
Big data
Price of Privacy
Data Governance Quality Metrics and Compliance
