Basing business decisions on data and quantifiable information is a strategic practice exercised by many CFOs. But with multiple divisions operating on different versions of the same information in siloed systems, data-driven business intelligence is barely achieved. Poorly conceived data can double labor, increase costs, delay deadlines, and create tension amongst misinformed stakeholders.
The need for a single source of truth
Imagine a scenario where a distributor has recorded datasets in UTC (Coordinated Universal Time) and PST (Pacific Standard Time) without a unified view. With several hours of difference between the two time zones, long-distance deliveries and pickups can go completely out of schedule. But if the company’s ERP system had a single source of truth where each user interface can translate dates and times to local zones, every stakeholder across the value chain would be on the same page.
A single source of truth (SSOT) enables that synchronization. A company with SSOT relies on one and only one point of reference for the latest, aggregated information. This way, every entity in an organization bases business-decisions on the same data. It can revamp complete business operations and offer the following benefits:
- Provide Decision-Makers with the Right Data at the Right Time
A single source of truth can bridge the gaps between disparate systems and departments that deal with seemingly infinite data streams. By consolidating data and centralizing visibility, it can help clean the datasphere with a comprehensive software suite built around deriving insights. It can improve data literacy uniformly across the hierarchy laying the foundation for enhanced analytics, forecasting, and sales. It is also the building block for data management of optimization strategies to paint a clear picture of the internal/external environment to derive actionable intelligence.
- Drive Change and Improve Organizational Performance
Without a single source of truth, data sets exist in siloes, and each department operates as a black box. The obvious result is the high probability of data inaccuracies and redundancies. Data can be modulated, copied, and updated in many ways and periods. SSOT overcomes this barrier to fast-paced digital business and next-generation workforce. It nurtures a collaboration wherein teams not necessarily working together can be notified of any changes in the data repository. By providing a central core integrated with a wide range of applications, different teams can seamlessly collaborate to strategize more effectively.
- Marketers to Evaluate Predictive Models
To take full advantage of predictive models, marketing leaders need a simple, intuitive way to assess and understand diverse data. A structured inquiry with trusted data can secure better results through tighter alignment of data predictions and marketing process. SSOT can enable marketers to manage and analyze financial data, customer data, vendor performance data, etc., to improve campaign success rates and curate relevant KPIs in real-time. Everything from production data to customer information to service data to sales and marketing conversion rates can be presented in standardized dashboards allowing them to perform tasks and make decisions with ease.
- Reveal the Business Value of Perfect Data
The direct benefit of a single source of truth is that business leaders don’t need to make assumptions about anything at any time. With constant access to accurate information or ‘perfect data’, companies are empowered to tap into business intelligence and advanced analytics with a sense of confidence and trust. Instead of debating which data source should be relied upon, companies can get a head start with SSOT with perfect data that can be used by anyone, in any way, across the entire organization. Furthermore, SSOT can provide real-time data to align targets with fluctuating demands and market parameters, thereby eliminating the need to detect obsolete information.
- Quicker Operational Performance Issue Remediation
Too many intermediate systems in a value chain can result in low data transparency and significant performance glitches. Issues like lack of role-appropriated data representation and low data accuracy often stem from the presence of multiple data sources. It hampers inter-team collaboration and operational efficiency while resolving issues. A single source of truth can relieve data stewards from such problems and facilitate operations. A single version of truth can help identify such issues and drive quicker business action to remediate them. With such data transparency, management can take faster, more accurate business decisions by eliminating the need to sift through multiple data sources.
- Use Customer Data and Analytics for a Better CX
Customer experience is a product of customer analytics, which in turn is dependent on customer data. With the help of SSOT, this interlinkage is solidified when crucial customer information is presented. By integrating systems like CRM and ERP, a single source of truth can be created that saves employees’ time and energy and improves the customer’s experience. It can enable easy accessibility of every minor detail needed for customer analytics, including credentials, patterns, and feedback while eliminating human errors and incomplete/inaccurate/duplicate data points.
To sum it all up
Businesses will continue depending on data and analytics to transmute enterprise information assets into valuable intelligence. And for Chief Financial Officers (CFOs), finance teams, and other financial professionals that look to optimize their business decisions from seemingly infinite data streams, mastering concepts such as the single source of truth (SSOT) is essential.
As 85% of leaders are shifting towards master data management and advanced analytics as part of their 2021 capabilities, SSOT will take center stage as an enabler of this shift. Companies that identify this opportunity can build on it to create cohesive information management infrastructures. Data-driven decisions that are more holistic than compartmental will be the next wave of competitive edge.
(The author is CEO at Pimcore Global Services and the views expressed in this article are his own)