Probably the two most compelling reasons to invest time and money into a Data Management Strategy are cost reduction and better decision-making. One should not underestimate the effect that accurate data has on understanding customer behaviour, buying trends, product retention, promotional activity, financial stability…the list is endless.
The initial thought process should precipitate answers to the following questions: do the people who have control of the budget understand what Data Management is and why an organisation might need it? A simple enough question, but one that is often overlooked. Human nature would have us assume that each individual has a similar level of understanding of a subject as we do ourselves. This is, of course, not usually the case.
Another question to consider is: why should a Data Management Strategy be adopted? The answer to this is simple: Because it will help to standardise, streamline and improve the quality of your company’s data going forwards, which will help to put your company on a growth path. While implementing a Data Management Strategy might seem like a complicated task, the effect that it will have on the ease of data access and the accuracy of the information that can then be communicated between departments and to your clients, is enormous. In short, a Data Management Strategy is designed to make life easier for everybody in the long run.
Other Points for Consideration
Future-Proofing – Implementing a Data Management Strategy, one that incorporates good Data Governance, will assist in future-proofing the way in which data is managed moving forward. In other words, it will help to ensure that the data that is generated and stored by your company in the coming years is of a satisfactory quality. A Data Management Strategy is an investment in the future efficiency of any organisation.
Bad Data is a Liability – Data is one of your biggest assets. It is the wealth of information from which you can draw to make logical and accurate conclusions about the workings of your organisation. Data that is not properly managed is not an asset. If your data is mismanaged, disorganised, inaccurate, poorly input, wrongly duplicated and disconnected, the conclusions you can draw from it will be flawed, leading to poor decision-making.
Think about it this way, it is unlikely that your company would let other “assets” deteriorate to a level that would render them worthless. Data should not be treated any differently. Robust data management that delivers accurate, controlled, integrated, reliable information can only enhance the operations, decision-making and potentially even the reputation of a company – vital in the current trading climes.
Data Management Saves Money – Demonstrating the immediate economic benefits of an effective Data Management system might seem hard to demonstrate. It should, however, be seen as a long-term solution that will provide a variety of benefits, one of which is certainly cost efficiency.
A Data Management Strategy can identify areas of profligacy, by giving a true and accurate picture of the position of the business across all of its departments. This will help decision-making, including those decisions which pertain to cost reduction.
A good strategy will enable easy identification of activities affecting the core business entities. These activities vary, depending on the organisation. For example though, a retailer would be interested in flagging up when stocks run low. An organisation could streamline its business processes by integrating sales and distribution with finance. The list is endless.
Overall, a robust data management strategy/implementation will turn an organisation from reactive to proactive, underpin better decision-making and save money.
Analyst research suggests that, on average, data management projects will save the business 5 times what it spends over the following 5-10 year period. With this sort of evidence built into your business case, it will be a much harder task for the budget holders to decline the investment.
This article is a guest post by Ike Ononogbu, the Consulting Director of InforData Consulting, a data management consultancy recently named in Gartner’s Market Guide: External Providers for Master Data Management.