Regardless of industry, one of the greatest skills a leader can possess is the ability to make good business decisions. Good decisions can have a profound impact on customers, employees and the profitability of the business.
The Importance of Information
Good decisions require clear thinking, commercial judgement and reliable intelligence on which to base the decision. Therefore having accurate, timely and relevant information is an important part of effective decision-making.
Effective decision makers would consider not only the information on hand, but also the information they do not have at their disposal. They can take the emotion out of the process, they will prioritise decisions which have bona fide capacity to drive the business forward and they avoid unnecessary delays. Add to this, a good decision maker is not afraid to ask an expert for help (Forbes, 5 Simple Steps to Improve Your Decision Making, 2015).
“Without data, you are just another person with an opinion” - W. Edwards Deming
Alas, many organisations have trouble with both the qualitative and quantitative aspects of information or data. “We just don’t trust the numbers”, is a phrase often overheard in commerce today and according to KPMG, as many as 56% of CEOs say they are concerned about the integrity of the data they are using for decision making while another 36% of CEOs say they can’t make data-driven decisions until they invest heavily in data quality initiatives.
With such damning statistics, the question is, how does an organisation improve data confidence?
Robust Systems and Processes
Well there is no silver bullet, but the application of good, old fashioned governance, diligence and attention to detail goes a long way to improving data confidence. Contemporary organisations make use of multiple business systems to help run their operations and a solidly built network of technology and processes is fundamental to attaining the necessary levels of assurance.
To simplify matters, we’ll use the analogy of a tap not working to help answer the question in more detail, with water being ‘the data’ and the water system being ‘the network of technology’.
Flow of Information
In a remote water system where the water is not running properly, the problem could be with the tap itself, there could be a leak in one of the pipes, or there could even be fault with the supply of water at source.
How do we know which part of the system is failing? Is the problem a system or process issue – did the C02 dispenser fail, or perhaps we just don’t have a procedure to check and replace the cylinder before it runs out? Is the system design flawed – maybe there just isn’t enough pressure in the system to drive the water through.
Likewise, in the financial environment, there are so many moving parts that having a robust infrastructure in place is integral to improving the integrity of the underlying data.
Helping the CFO Drive Value
Bringing this all back to the business environment, modelling the business to provide an understanding of how all the parts fit together and building a strong infrastructure to act as a conduit for the flow of information becomes a precursor to any structured attempt to optimise performance.
Leading organisations have a good understanding of their data flows and they realise a chain is only as strong as its weakest link.
Unfortunately, this is where many businesses are challenged. This may be due to a lack of skills but very often the pressures of day to day business activities simply don’t leave the time to stand back and properly document, model and understand the business.
When the water system is not delivering, we call a plumber for a quick and reliable assessment of our system. Likewise, if you are trapped working in the business, not finding the time to stand back and work holistically on the business, then an independent & objective view may be needed to help find your blockages.
With time at a premium, making use of trusted third party service providers can provide powerful business focus, thus facilitating the CFO and finance team's ability to better support the operational team and in so doing, drive performance improvement in the business.
I wonder what my partner would say if I failed to address the broken tap in our home because I was ‘too busy’.
“Have you called the plumber, yet?”
Read the second part of this article
Part II of this thought provoking article explores the components within the financial environment and smart ways to improve the quality of data in more detail.
Read also: HOW DATA IMPACTS PERFORMANCE - The broken tap chronicle - Part 2
MANAGE THE END-TO-END FLOW OF INFORMATION IN YOUR BUSINESS
Ramesys recognises many organisations lack resources and skills to address data issues. We assist many clients with analysis of their data requirements and business processes to find efficient solutions and we deliver resources to help improve your business.
Click below to read more about the range of consulting and software solutions we offer, designed to manage the end-to-end flow of information in any business.
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