Three Key Steps to Improving the Quality of Information in Your Business
Information is data that has been processed and re-presented in order to be interpreted for a specific purpose.
Good quality information is essential for running your business. You need it to understand what has happened, determine what is happening and, hopefully, make more than a wild guess about what might happen in the future.
We see businesses with plenty of data held in many systems and spreadsheets. Often considerable time is spent processing, aggregating, aligning and presenting data. The process is characterised by silos of data and inconsistent definitions of information, regularly constrained rather than enabled by IT systems. The result is possibly useful but with multiple different versions of the truth, and doesn’t always answer the questions that really need to be asked.
Information costs money: the underlying data has a cost in relation to capturing, storing, analysing and reporting it. Information has an associated cost in terms of the time required to read and digest it. It also has an ‘Opportunity’ cost that can’t immediately be seen in terms of lost sales, lost talent, missed revenues, margin eroded and ultimately, reduced enterprise value.
So, in order for information to be of good enough quality to provide you with a Return on Investment (ROI), it needs to fulfil certain criteria:
Purpose – why are you spending money on producing, reconciling and discussing it? Too much information can also be a problem and can inadvertently drown key messages. So, how do you ensure that information is relevant and of value?
Timely – by the time information is captured, ratified and presented is it still valid for the intended purpose? In order for information to be of value, it needs to be relevant to the timing of an associated decision.
Accurate – is the information fact, an estimate or an assumption? Has it been reviewed and validated so that you can trust it? Is the requirement for a review and validation process a constraint or degradation on its timeliness?
Integrity – is it whole and complete? What are the sources of the information, are they authoritative or easily challenged? Who has ensured there are no gaps or overlaps?
Appropriate – it needs to be formatted, communicated and presented to fulfil the specific needs and objectives of its intended audience. Where possible only produce information that focuses on identifying exceptions, problems and exceeded thresholds. If everything is confirmed ‘green’, do you need to produce a report to say that?
There are three key steps you can take to improve the quality of information in your business:
Determine information purpose and priority by aligning information to one or more of the process elements in your core business process. The core business process is the sequential chain of essential process elements that delivers your value proposition. If you don’t know what your core business process is, or the individual process elements that comprise it, then you need to gain that understanding before spending time and money on generating information, otherwise you can’t validate the need for that information or assess its ROI.
Agree one version of the ‘truth’. If you are consistently spending time challenging which piece of information is ‘correct’ then you have a problem. Once you have established purpose and priority for a specific piece of information, the next thing you need to do is agree what will be the single ‘golden source’ for that information. If that single golden source entails reconciliation and validation from different upstream information sources, then make sure that you have a defined process with an accountable owner to manage it in a consistent and timely manner so information gleaned is not only valid and relevant but is also accurate and complete.
Define information governance and assign ownership. Information governance should define the policies, standards, purpose definition and roles required to manage your information. Information that is key to running your business should also have a designated business ‘owner’ who is accountable for its purpose, priority, accuracy, integrity and timeliness.
As a business grows it can be easy to give in to the temptation and false pressure of investing in a Business Information tool and to start producing lots of information.
Before you go down this route, and perhaps as part of a more regular review, we would recommend that you use the 5 criteria and the 3 steps we have described above to first assess the need, and then to evolve, test and refine your approach. Otherwise, there is a danger that you will start to create lots of data that generates noise and confusion, rather than insightful information that helps you assuredly steer the business.
If you have any questions or need help, please get in touch. We have plenty of pragmatic, real-world experience of what is good and bad. We can provide practical advice on how to design, review and implement your information system and supporting processes.