Counting The Cost of Data.
A widely held opinion amongst senior management is that data is one of the most valuable assets to any organisation, but what is the cost of not harnessing the knowledge held in that data and managing it in in an effective way?
With the amount of data available to all types and size of business growing almost by the minute, it is essential that senior management understand just how vital it is to implement and continually evolve a robust data management strategy. However, this is not always the case. Data Management can be viewed as an unnecessary expense when it comes to allocating budgets, but is this really the case? Can the cost to your business be greater if in fact you don’t implement a data management strategy? Perhaps it may well be so.
Reams and reams of data that is stored in disparate sources can be difficult to integrate and manage; poor data quality, and a lack of data governance are all factors that affect the outcome when that data is transformed into “information”. Disconnected sources can skew figures, for example having the same product represented in two different ways in a multitude of systems can be a headache when trying to understand how that product is performing, inaccurate, unmatched data can give you several versions of the same outcome. Which can you trust? The decisions that are made based on even this very simplistic example, can have far reaching effects on your business, which usually results in some sort of cost implication. Replicate this over a number of products, or business units and you begin to see why and how robust Data Management project can not only reduce cost sufficiently to pay for itself but actually save money on a year on year basis.
Making the most of your data is key to good decision making and understanding exactly what your business needs to grow and evolve. But the key to making the most of your data lies within your data management processes, ensuring that data quality is high, enabling an integrated and consistent view, governing the current processes, and probably most important of all, managing the changes that these processes will bring about in the workforce.
Any project such as this requires three elements, People, Process and Technology; one will not succeed without the other two being totally on board.
However, in involving these three elements costs increase, both in terms of financial outlay and time commitments. It is at this point that the question “is it worth it?” arises.
Of course there is tangible evidence that the answer to this question is yes. For example, Gartner estimates that the average Data Management project can provide savings equal to the investment made year on year for 3 – 5 years. There are other benefits that are, of course, less easy to quantify with facts and figures, but breaking it down into some aspects of Data Management (migration, integration, quality and governance) can give you a basis on which to build. For example, investing in a Master Data Management project without proper data governance to underpin the process moving forward will result in the same (or very similar) piece of integration work being repeated in the future. An additional cost not factored in at the start of the project and one that can be nullified with the introduction of a Data Governance Strategy.
A single repository where data is integrated into a common format will reduce the need for manipulation of figures, freeing up personnel to concentrate on delivering value to the business, instead of just number crunching.
The final piece of the data management jigsaw can be found in Business Intelligence and Performance Management tools; here there are many examples of cost efficiencies right across the business. The list is simply endless. Reducing time spent delivering budgeting procedures, integrating production schedules and forecasts with labour requirements allows for agency staff to be reduced, understanding peaks in demand and allocating resource etc. etc. Just to mention an example of where cost savings have been achieved through effective data management. A retailer benefited from an integrated, single vision approach to their supply chain making significant cost savings that effected their bottom line by in excess of €250,000 in just 12 months, more than double the investment that was made.
So, all in all the evidence points to a Data Management solution being key to making the most of your data and furnishing those who need to make decisions with the most accurate, robust and trustworthy data you can.
However, it is also true that Data Management remains a difficult “sell” to senior management. This is precisely where external experts in the subject and in building business cases can help.