An intriguing discussion topic for sure, as we can all recognise the impact of poor data (slower decision-making, inaccurate reporting etc.) when insufficient rigour is applied to the discipline of Master Data Management (MDM).
The numbers don’t lie
Then there’s the research. Look at most industry surveys and the results suggest at best a ‘must do better’ conclusion. For example, the cost of data redundancy is predicted to reach $3.3 trillion by 2020 (with 21% of companies experiencing some form of reputational damage due to redundant data). While Gartner reports that organisations believe poor data is costing them an average of $15 million per year.
Not to go over the top on survey results, but it’s also interesting to see from the ‘Future of Finance Summit 2019’, that 63% of CFOs believe their reporting and analytics capabilities are not keeping pace with business demand for information. Then there’s the ultimate ‘killer question’: Is your data proving valuable? Or are you consuming too many resources mining and interpreting it (to which 66% of CFOs agree!)?
No quick fix
So clearly something needs to happen, but what? Well, as Gerard was quick to point out, any fix starts from the understanding that there’s no silver bullet solution, toolkit, or framework available. That’s because MDM is about people, not technology, and getting into the ‘nitty gritty’ of key process such as:
- Data Governance
- Data Collection processes
- Data Quality (and associated remediation processes)
- User documentation and training
- Internal controls, processes, and procedures
Feeling the effects
With access to the right expertise, a thorough analysis of this information can turn up some interesting insights. For example, a company can be found holding excessive stock because the data lists a key component as a widget on one site, and a gizmo at another. This may not sound like a huge problem, but if you’re holding 100,000s of them then such a data issue can lead to costly duplication (and that’s without talking about the lost potential for volume discounts etc.).
Head over to the Finance function, and the problems caused by poor data quality become even more acute. For example, without trusted data how can anyone be confident that working capital payment terms are being followed to the letter? That the business is locked down from a GDPR perspective, or that VAT and tax returns are being calculated with precision? In other words, poor data can have real business impact – enough to catch the ear of even the most indifferent of executives.
Engaging the C-Level
If this is such a big problem, why aren’t businesses doing more to fix it? In part because the board are rarely aware of the problems as the organisation will often hide the huge about of work required ‘behind the scenes’ to generate the required numbers/reports/insights. These requests are completed, and the world continues on – leaving executives to question the need to invest in data quality initiatives when: “you don’t fix what isn’t broken”.
Hence it can be hard to push data quality up a CFO or CTO’s priority list. Yet help can arrive in the form of a data maturity survey. Asking users questions such as ‘what’s our data quality like?’ or ‘is our data accessible to users?’ will no doubt receive a lot of negative responses. But this is good, as it gives you the ammunition to take to the C-level and ask for the budget to undertake a comprehensive data quality initiative.
So what can be done? Well to start with you need a clear idea of what good looks like. At the roundtable this was defined as ‘everyone having access to the right data when they need it, and where reporting can be standardised’. Next you need to ask some tough questions of your data: is it compliant, up-to-date, accessible, and useful etc. – and ensure a practical governance framework is in place.
Finally (the really hard part), you need someone to effectively ‘own’ all the activities needed to drive data quality. From profiling, processes, and training, to input forms, reporting, and documentation, having a seasoned expert running the show is arguably the one biggest factor guaranteed to inspire success. Why? Because as already said, data management is about people and not technology!
To find out more about Eton Bridge Partners’ experiences in the field of data management, and the type of executive talent we can call upon, email Aled Homer.