The Importance Of Effective Data Management To The Well-Being Of Your Service Organization

By Bill Pollock, President and Principal Consulting Analyst, Strategies for Growth

In today’s economy, companies tend to focus their investments more on packaged systems and business process optimization rather than on data management. However, implementing new systems and optimizing existing processes are only part of the solution in an environment where a majority of business intelligence (BI) and customer relationship management (CRM) initiatives may ultimately suffer limited acceptance – or even outright failure – due to lack of attention paid to critical data management issues.

Yet, investment in corporate data management is still often overlooked – and this can very easily lead to a significant reduction in the organization’s ability to effectively address critical business decisions.

But, it gets even worse! Poor data management can eventually stunt operational efficiency in virtually every area of the organization, as otherwise valuable resources (i.e., personnel, dollars, time, etc.) are required to spend an inordinate – and unnecessary – amount of extra effort:

• Searching for missing data
• Correcting inaccurate information
• Creating temporary, or permanent, workarounds
• Laboring to assemble information from decentralized and disparate data bases
• Resolving data-related customer complaints

As a result, not only does poor data management significantly decrease an organization’s revenue-generating opportunities, it also significantly increases its operating costs and, may in fact, lead to a reduction of customer satisfaction.

Many business and IT managers will argue that it is sometimes easier to design and implement an effective data management program than it is to agree on the need to actually do it. That is why it is so important for the principal internal proponents of data management to have a compelling reason to present to management for moving forward. We have found that the most compelling reasons used to gain management buy-in typically focus on the following main themes:

• Acknowledgement that poor data quality has a “real” negative impact on the ability of the organization to attain its business goals (i.e., increased sales/revenues; improved production, sales and marketing efficiencies; reduced cost of doing business; etc.)
• Recognition of data as a “real” corporate asset
• Use of data management to support increasingly complex regulatory compliance demands (e.g., Sarbanes-Oxley, Basel II, others)
• Strategic use of data management as a competitive advantage (i.e., in terms of improved production/distribution efficiencies, higher customer satisfaction, etc.)
• Improved sales and marketing effectiveness through the use of improved BI/CRM solutions, and better information about customers’ and prospects’ needs and requirements, buying patterns, etc.

Depending on the specific organization, senior management may be more attuned to generating increased sales/revenues, reducing production and distribution costs, or making – and keeping – their customers happy. However, regardless of the primary focus of the organization, there will always be one or more compelling reasons to move toward effective data management – and it will generally be your task to determine which of these reasons are most compelling, and in what manner they should be presented to management.

Arguably, the greatest battle you may face inside the organization will be to get management to the point where they agree that effective data management is a goal even worth considering. However, once you get them to accept the notion that data management is a tool that can be used to facilitate – even expedite – their ability to meet key business goals, the path forward becomes much more clear and manageable.

For many business enterprises, the numbers speak for themselves, where the implementation of a data management initiative can ultimately lead to:

Reductions ranging from:

• 10 to 20 percent of corporate budgets
• 40 to 50 percent of the IT budget
• 40 percent of operating costs

And increases of:

• 15 to 20 percent in revenues  
• 20 to 40 percent in sales

The quest for knowledge is the key that can unlock the potential applications and uses of the organization’s existing – or planned – databases. This is especially true in an increasingly digital world where data is continually being collected and distributed from an exponentially growing number of devices in the field – we’re talking billions! In fact, most businesses are already sitting on a goldmine of data that can – and should – be transformed into actionable information and knowledge with the potential to:

• Enhance and expand their existing product, service, supply chain, CRM, and Service Lifecycle Management (SLM) operational databases
• Create knowledge-oriented delivery systems for new, or enhanced, value-added products, services, and customer support
• Differentiate itself from other competitive market players

The effective application of data management can provide an organization with the opportunity to capitalize on its cumulative information and knowledge assets. Knowledge that was previously unknown – or unavailable – such as cross-referenced customer buying patterns, profiles of potential buyers, or specific patterns of product/service usage may be uncovered and put into practical use for the first time. The end result can lead to anything ranging from improvements in operational efficiency, to more accurate sales forecasting, more effective target marketing, and improved levels of customer service and support – all based on a strong foundation of effective data management.