Data: A fuel that drives business decisions

Data is the most valuable asset in the current technological era. Data assets can be in the form of a file, document, webpage, or application that an organisation would use for generating revenue. 

Data (datum-singular) refers to facts and statistics. It is one of the most used words in academia, research, and the corporate world.¹ 

Technological advancement and digitalisation have made accessibility of data to corporates at a click. Data is substantially vast, varied, and fast. 

In recent times, corporates, in a bid to gain a competitive advantage, use various applications and systems (ERP or CRM), where data help them provide relevant information and insights. When it comes to answering very basic but critical questions accurately about profit margins, productivity, performance, etc., it is important to have correct and timely information. 

In sum, data is the best version of the truth and has essential information which businesses can rely on. Managing and mastering data is a necessity for businesses as it would enhance the quality and consistency of their key data assets. 

Why do we need data? 

Data is the basic component of modern decision-making. It has different purposes based on the type of data and business objectives. Some of the importance of data in business are as follow -  

1. The only “source of truth”: For seamless business operations and processes, it is important to have a single source of information. This source acts as a common thread that binds all the functions in an organization. 

2. The basis for precise and accurate transactional data: The integrity of every single transaction depends on the accuracy and completeness of the data. 

3. Business impact: It is impossible to do business without accurate data.  

4. Efficiency: Data (which is the starting point for all transactional activity) if not managed efficiently can have adverse effects. The cost of re-do of the faulty foundation is colossal. 

5. Uniformity: Standard procedures, and common vocabulary across functions, will facilitate smooth cross-functional interactions without any misunderstanding, thereby building synergies within the various functions in the organisation. 

Reasons why data will sometimes not be in good shape 

Data management could be hazardous due to various reasons. Followings are some of the reasons that affect the integrity of data -  

1. Urgency: Various activities in the organisation happen in a hurry. There is a tendency to cut corners to save time which may lead to clerical errors or duplication of work. Also, the use of non-standard terms could lead to unnecessary confusion. Organisations end up spending a lot of time and money to clear the mess created by shortcuts taken to save time. 

2. Rigidity: The master structure of the data is many a time prepared without having visibility of the future. A futuristic view should not limit its functionality. 

3. Lack of definite ownerships: It is assumed that it’s the responsibility of the team that handles transactions and should create master records. However, this team may not have an overall understanding of the organisational functions. Also, centralising the process may not solve the issues if the mindset remains the same. 

4. Multiple stakeholders and varied requirements and formats: The information available in the master data may have been created by limiting them to a particular department, an activity, or a function while ignoring the requirements of other stakeholders. For example, in a factory, the production department keeps a record of the number of units produced; however, the operations department wants to record the number of hours. 

5. Ignorance of the creator: Based on the above example, we can understand that the limiting factors are not deliberate. Such omissions happen as the creator of the master structure is not aware of the consequences. The creator doesn’t have the full vision of the upstream and downstream effects of the master records. 

6. System limitations: Various systems and applications are used by organisations to make the day-to-day job easy and avoid human errors. However, they have their own limitations. Also, many of the transactions involve communication with external systems. For example, validating a vendor based on GST No. or Bank A/c No., etc. Not all stakeholders will have access to all kinds of data based on the domain they operate in. 

7. Setting up of priorities: Many of the errors and omissions do not get highlighted immediately. Therefore, it is necessary to have a set list of procedures and principles based on the priorities. It contributes to enhancing the quality of the master data. 

Adopting comprehensive data management is pivotal for all organisations as it is essential for building an efficient data-driven ecosystem. 

How to ensure the data is comprehensive and complete 

Here are a few processes that help data to be comprehensive and complete -  

1. Futuristic view: The creators should have a clear understanding of business strategies and the key drivers. The data designs should be future-ready and help scale up the business objectives. It will also help in avoiding the risk of hitting the dead end. 

2. Data hygiene: Making data hygiene is an ongoing activity. 

3. Dedicated team for data management: Master Data Management (MDM) helps in maintaining the integrity of the data. MDM may be a shared service or at the head office. 

4. Standardising: Standardising policies, creating frameworks at inception for procedures, conventions, vocabulary, etc., and setting ground rules will ensure weeding out silly errors. 

5. Data validation: The systems and platforms used by the organisations should have proper validation rules set to prevent the garbage from sweeping into the system. Reasonable checks are necessary to eliminate errors that would litter the data. 

6. Source data: There should be a full-proof way to ensure that every time data changes hand, it should not run a risk of unintended corruption. Any modifications are to draw it right from the source. 

Need for developing comprehensive data management functions 

The followings are some of the points that highlight why every business must develop comprehensive data management functions -  

1. Eases operations: Enables smooth flow of activities through the Data Management (DM) platform. Data management also helps in improving UI/UX for all stakeholders. 

2. Fast response mechanism: Data management helps enterprises in speedy, smooth, and seamless communication for better and faster decision making. 

3. Integration of data: All internal and external stakeholders can be equally responsible and act collectively. Data integration across all functions in the organisation help in improving the brand image and preventing inadvertent errors. 

4. Business insights: Data is everywhere and is very critical for business insights. Organisations are going towards building a data-driven decision-making culture. Flawed data can be disastrous. 

5. Privacy of data: Dissemination of flawed data or leakage would lead to fatal consequences for businesses. Regulators are constantly emphasising data privacy.  

Be a future-ready data professional 

By enrolling in a course, you can be an in-demand professional in the world of data. Online Manipal offers a UGC-entitled online M.Sc. program in Data Science to build future-ready data professionals. The program was designed and delivered by the expert faculty from the renowned Manipal Academy of Higher Education (MAHE). NAAC A++ accredited, MAHE is one of the top-10 institutions in India that was bestowed the Institute of Eminence status by the Government of India. 

The comprehensive curriculum of M.Sc. in Data Science covers machine learning, big data analytics, and statistics. The industry-focused modules will help learners equip various data roles and positions in top organisations. You can take this self-paced programme from the comfort of your home by accessing the learning material on the state-of-the-art learning management system (LMS). The LMS contains reading, concept videos, recorded lectures, quizzes, an extensive e-library, and a discussion forum. Online Manipal provide placement assistance, industry connect, and access to alumni network to boost your career prospects. 

Conclusion

Data is the new fuel in this world as it is the basis for every step in the day-to-day functions of every organisation. From small business enterprises to corporates to governments, all depend on the data to make decisions and set processes for business growth. However, some activities jeopardise effective data management. Hence, it is essential for all to adopt comprehensive data management functions to build an efficient and futuristic data-driven ecosystem. 

 

References: 

1. https://corporatefinanceinstitute.com/resources/knowledge/other/data-assets/ 

2. A recent survey by Mc Kinsey & Company (“Designing Data Governance that Delivers Value” – by Brian Petzold et al, McKinsey Digital June 26, 2020)