The Importance Of Good Data – How Well Are You Managing Yours?
Blog: Solitaire Consulting Blog
A lot of my work is helping regulated financial services businesses with process improvement and change. The fact they are regulated means they have to pay attention to the quality of their data. However, data quality for non-regulated businesses is just as critical, but it can be harder to achieve because you don’t have the regulator checking up on you!
Why do I think this is so important?
Apart from the obvious benefits of having up to date and accurate information in a single place, your data is a valuable business asset and it needs to be looked after. Do you have proper controls in place to ensure that core data is maintained correctly, or is anyone permitted to update your systems? Without effective controls you risk having issues with duplicate records and information stored inconsistently (often a problem with address data). These are common problems that I come across all the time and are a barrier to efficient business processes.
As we move to a more connected workplace the need to maintain accurate records is greater, this is partly because there are fewer breaks between systems which create natural opportunities for data to be manually rekeyed, checked or verified. We also collect more data so the problem of data management is much bigger than it was, say ten years ago.
Whilst the problem is getting bigger the benefits of looking after your data and the opportunities it creates are also greater. Some examples of benefits that can only be realised when you are in control of your internal data quality are:
- Straight-through-processing (STP). STP is used to interface transactions from counterparties (usually banks or brokers) direct to your core systems without rekeying. This can save significant time and increase accuracy, but will only be beneficial when your internal data is aligned with the counterparty. Without the necessary controls on maintaining data, such as bank accounts, you will never be able to successfully benefit from processes such as online payment systems, automatic reconciliation and bookkeeping. In the STP projects I have been involved in, the most time consuming part is the initial data cleansing before connecting systems.
- Client portals. Your customers are probably demanding online access to your business, either to buy products or consume services. Unless your data is accurate you will be putting your business reputation at significant risk as well as creating extra work for your staff dealing with client queries. Would you be happy to give your clients online access to relevant data in your back office systems? Of course, once you have taken this step to provide data through a portal and developed the processes to ensure data quality, your other internal processes will also benefit.
- Outsourcing. When you have accurate data it opens up new possibilities for improving efficiency and lowering costs. Outsourcing non-core activities to lower cost jurisdictions is only effective when your service provider has access to accurate and well controlled source data. Many outsourcing projects fail to deliver the predicted benefits because of the additional time spent dealing with data issues. My golden rule is never outsource a problem. Fix your internal data issues before giving the processes to a service provider.
Technology advances may have created this problem by allowing us to collect, store and process more data, but it also provides the solution. Manual data checking processes can be replaced by automated data integrity and exception reports, whilst using your technology effectively can remove many inherent inefficiencies within your internal processes.
I hope this has given you some food for thought, but if you’d like to discuss more specifically how your business could benefit from better data management then I’d be happy to share the experiences I have built up helping businesses improve their processes, systems and data.
If you have found this post useful, why not download our free eBook, “12 Successful Business Improvement Techniques“.
Related posts:
- The importance of Change Management during system implementation
- The importance of communication during change
- Outsourcing – opportunity or threat?
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