In the modern world, it is simply impossible for a company to make decisions - both on the macro and micro levels – without collecting and analyzing massive torrents of data. Most big companies with complex business structures and multiple business verticals have established a dedicated data-management system and even created a Chief Data Officer position to enable efficient data-driven management. However, a good number of them fall short of getting it right.
According to a cross-industry study conducted by Harvard Business Review, on an average, less than 50% of an organization’s structured data is actively used in decision making. Less than 1% of unstructured data is being used, while almost 80% of an analyst’s time is spent in simply the discovering phase and processing the data.
A coherent data management strategy is needed for organizing, analyzing, governing, and deploying. A robust data management strategy promotes superior managerial decision-making which ultimately has a positive impact on the organization’s overall financial performance.
What is Single Source of Truth?
While there are several approaches to data management, employing a centralized approach enables integrating different functions of the organization that leads to a holistic view of the business. Such an approach streamlines the decision-making process by eliminating the inherent inefficiencies of compartmentalized (or disconnected) data sources.
In other words, a single source of truth (SSOT) ensures that everyone in the organization makes business decisions based on the same data. In order to help organizations manage their business using a single data source, PracticePro365 offers great new accounting practice management software that integrates multiple functions to help monitor the health of the business and plan for future growth. It emerges as an effective tool to manage your practice, projects and people from a single data source and easy-to-understand dashboards.
Advantages of Single Data Source
A single data source eradicates data duplication, thereby saving time, money, and effort. It also ensures consistency in data across the domains which are critical for error-free decision making. It also places accountability across different departments on a single data manager, thereby ensuring that data policies, standards, and governance are applied consistently across the span.
For example, Miller Grossbard Advisors (MGA), a tax and account advisor firm used to have its workflow, time, and billing data and reporting residing in different systems. In such a configuration, developing an overall meaningful picture meant jumping back and forth across different systems which were obviously inefficient from the point of view of decision making. After switching to a single data source system, the firm is now able to analyze data, maximize productivity, minimize waste, and identify new business opportunities.
A single data source helps you empower your staff and partners. For example, you can track the month-over-month billable hours of each staff member to ensure that the productivity goals are achieved. This way, you can get a high-level view of staff performance in terms of productivity that will help in evaluating annual performance and deciding compensation.
One can use workflow automation and data management software to identify points of improvement. With the tools for these aspects already in place, training the staff on specific management techniques can greatly improve efficiency. Be in a new marketing campaign, a client project or customer details, a single data source system provides a dashboard which can be used by the top management to monitor staff performance like the number of calls logged by the sales team, number of bugs resolved by the development team, and size of audience the marketing department has reached.
Challenges of Setting Up SSOT
The SSOT does come with challenges. For starters, setting up this type of data management is extremely time-consuming and complex. Extracting data from different platforms and combining them together without losing their meaning is a tedious process. Also, while they eliminate data silos, in reality, this approach creates a new silo in the form of daily reports of staff activity for the top management. Such a configuration hinders individual teams who are working on that data from seeing the big picture, thereby impairing team collaboration.
A single data source system requires a company’s stakeholders to find a common ground in which key metrics will be used to measure business performance. During this process of alignment, the team will discover data quality issues or gaps. Experts recommend starting with an area where the limits of the data are clearly known. In other words, it is better to proceed with good data that can be refined and improved over time rather than halting the entire process and waiting for perfect data.
Effect of SSOT on Project Management
Imagine a scenario wherein you’re managing a big project that is divided into four sections and each part is being handled by four different teams. Every week, you receive a progress report from these teams and things seem to be going right on track. When the deadline is looming, you do a final check of each team’s work and you learn that while their progress has been good, they all worked towards varying goals. In the end, when put together, the project is nowhere near reaching its goal. It would take significantly more cost and effort than originally estimated to get the project back on its course.
This is what happens in a compartmentalized data management system, which is otherwise called Multiple Versions of Truth (MVOT). Each team followed what is believed to be its proper goal, but they need not necessarily align with each other on a macroscopic level. This is where the SSOT approach shines. It stores all of the information that is needed for the successful completion of the project and makes it accessible to all of the members of different teams that are involved. With the right project management tool and up-to-date data, SSOT makes life easier for employees at every level of the organization.
How SSOT Can Improve Employee Productivity?
According to a study by Harvard Business Review, employees of big companies spent a staggering 300,000 hours every year in a weekly executive committee meeting. That’s a combined time of 34 years in a single year just to report on the progress of the projects! The SSOT can help reduce the need for meetings to a great extent because a complete record of the project histories is available for everyone in the company to access a central reference point. It is also very useful in bringing new team members up to date and tracking the progress of the project. When you get a real-time update on the progress of projects at the touch of a button without having to interrupt your workflow for meetings, you have more time on your hands. This naturally translates into a huge improvement in productivity.
Improved Workflow, Transparency, and Accountability
Using your project management tool as an SSOT centralizes communication so as to eliminate secluded emails/chats and to accumulate all project information on a single platform. This approach has three well-established advantages.
1. Workflow is improved as progress reports (daily and weekly) are available in one location for everybody to access. Employees can plan their tasks for the day based on other’s progress and pitch in if more effort is needed at a particular part of the project. The bottleneck situation is easy to identify and rectify.
2. Everyone involved in the project has their own accountability thus everybody knows what exactly they are responsible for. It eliminates the “I thought you are working on it” situation that arises more often than not in a normal working environment.
3. Everybody having access to the progress of the project makes for an open and transparent working culture within the company. This also helps the managers in empowering the employees to take initiatives based on the data.
SSOT Reduces the Chance of Project Failures
Changes in project objectives and inaccurate requirements gather are two prime reasons for project failure and both of these can be attributed to the lack of a central place to store the project’s progress. Team alignment is extremely important to ensure that all of the members prioritize tasks in a consistent manner and achieve smooth project completion, along with SSOT achieving it effortlessly.
According to Geneca’s survey, 80% of respondents admitted that they spend roughly half of their working hours on rework, which is a leading cause for project delays. Team alignment directly translates into reduced rework which in turn corresponds to timely completion of the project.
Moreover, at an organization level, SSOT helps the top management define an adequate vision that drives big long-term decisions. By centralizing strategy and planning, SSOT facilitates tracking the direction that the company is taking and shares it with project team members who will help in reaching the goal. A good organization-level SSOT should contain documentation pertaining to quarterly and annual planning documents, product roadmaps, KPIs and revenue goals, employee handbooks, market and audience research, and marketing position info.
Future Planning Made Easy by SSOT
So, we have established that a single data source system helps a great deal in ensuring timely completion of projects with high accuracy and efficiency. The data collected on all of the projects you have completed opens up a whole new avenue when it comes to planning future projects. Now, thanks to SSOT, you can predict how long a project will take with reasonable accuracy. The data will help you track how the people, resources, and budget influenced the previous project’s progress and use this knowledge to finetune the next project. No guesstimates or instinct-based approach is necessary. In the long term, this approach of relying on historic data paves the way for continuous improvement and this is one of the single largest advantages of SSOT.
A Brief Look at SSOT-MVOT Concept
If you are a huge organization with multiple business units, a centralized SSOT alone may not be sufficient to achieve the required flexibility to be agile. A new data management strategy combining the SSOT and MVOT could offer the best of both worlds. For example, Procter & Gamble has a centralized SSOT for customer and product data but the data management team realized the need for customized interpretations of data for various business units. So, the various business units are allowed to create controlled data transformations (MVOT) for reporting as long as the data can be reliably mapped back to SSOT. Thus, SSOT branches out from MVOT without compromising on the data consistency. This could be a sound approach for huge organizations with a presence in wide and varied business sectors.
Naturally, the accountability for the data management will not lie with a single data officer in this case but each business vertical will have its own CDO. This hybrid method may appear straight-forward conceptually but implementation takes robust data control, standards, governance, and technology. SSOT ensures tight control of the data while MVOT adds flexibility to the way the data is managed. It is the responsibility of the top management to dynamically adjust between the two and find the right balance.
To sum it all up, the Single Source of Truth strategy of data management brings together the company’s various departments to work in line towards achieving the company’s vision, long-term goals, and the big picture. With proper configuration, quality data and the right tools, this approach has proven to be highly-efficient, fail-proof, and ensures healthy utilization of data. It not only helps top management take the right business decisions on a real-time basis but also improves cross-department communication seamlessly and assigns accountability to every employee individually
In the modern world where data is generated at a fast-paced rate, managing it strategically is the difference between a highly successful organization and a mismanaged one. If your organization is lacking a robust data management system and a refined data strategy, it is high time to work towards achieving them.
Almost every organization, irrespective of the size and structure, has huge room for improvement when it comes to the management and utilization of data. From an apparel brand to a huge bank organization, if your decision-making is not making efficient use of data and aligning your strategy with it, you are heading towards extinction and it’s not an exaggeration!