We live in the ‘information age’. Information is valuable, arguably the most valuable asset that a business has, so extracting the maximum value from data ownership is high on the agenda of most businesses. Of course the issues of data management vary, partly due to the scale of a business and partly due the way that data is collected, managed and used. Nonetheless, to most, and even the smallest of business, the concept of an integrated data strategy sounds like a good idea.
One of the characteristics of a growing business is increasing departmentalism. As a business grows, functions like sales, marketing, finance and fulfilment become increasingly differentiated in terms of the people and processes involved and the tools used. Look at most companies which have expanded to more than a handful of people and you will see the evolution of internal structure. Individuals increasingly turn into teams and multi-taskers develop into managers and specialists. It’s a necessary step in business evolution.
Expanding businesses create silos
As they evolve it’s not uncommon for each department or function to implement stand-alone solutions to solve its own specific needs. These are designed to meet a local requirement but they may not necessarily align or coordinate well with the needs of the business as a whole. The addition of new offices or outlet locations and the introduction of further structure like supply chains and partners also tend to introduce new challenges and hence new specific solutions.
A common consequence of this is siloing – the process by which departments become increasingly isolated from each other. Although establishing departmental structure is an essential stage of business growth, siloing can be detrimental to a unified business and can be a barrier to long term growth. Integration is often an afterthought, the management solution to a problem which has naturally arisen, rather than a forward looking strategy as a business grows. For established companies it’s not uncommon to see grand ‘360-degree-view’ type integration projects which have been hatched to combat the effects of siloing.
It’s not the only casualty (other aspects can become equally disconnected) but data is one of the more commonly visible casualties of the silo effect. Many businesses, even small ones, have multiple data applications each with different formats and storage locations. Common examples are applications like CRM (Customer Relationship Management), booking and reservations, online eCommerce and finance and billing systems. Those with email marketing also typically have the ability to store, use and maintain data within that specific application for that specific purpose. Data which is housed within each application is useful locally, but the ability to move and share this data across other business functions has the potential to unlock a far greater value. In short, data integration adds value to existing information by mobilising it across the whole of a business.
Assuming the scale of business permits it at all, moving data around manually is time consuming and inefficient. It generally requires some form of extraction from its original source, re-formatting, assembly (where multiple sources are involved) and then re-import to where it is next to be used. It’s a multi-step, one-off action which needs to be repeated each time, and because it involves us (humans) as the weakest link is highly prone to loss and error.
One size really doesn’t fit all
There’s no single approach to data integration, but general practice isn’t to bring all data into one place. This might seem like a good solution, but each application has its own specific mode of operation and the data and processes are generally designed to be optimal for that purpose. A one size fits all is like building a very thick bridge. It works but it’s not the best balance of material (in this case effort) versus the desired result. Effective data integration is about sharing existing data across multiple applications. It creates connections between the applications, delivering information when and where it is needed. Done well it’s a streamlined, efficient and robust environment.
The benefits of integrated data
So, imagine an environment where multiple applications have the ability to share common data as and when it is needed. What sort of benefits might you see? Here are just a few.
Productivity – we’ve already established that even at a small scale, manual data transfer is hugely inefficient. Automated data transfer is an easily defined and repeatable process. Once it’s set up, synchronisation can largely be automated as a computationally efficient ‘background’ process.
Scale – it follows that as a business grows the need and speed of efficient data handling will intensify. An inability to effectively manage information is one of the biggest barriers an expanding business can face.
Availability – integration allows data to be rapidly shared between connected applications – the frequency can be set up as one of the synchronisation parameters. Rapid access enables speedy decision making and action, allowing you to quickly react to changing customer information.
Confidence – a 360-degree view creates a more complete understanding of your customer situation. It means that decisions are taken in collaboration rather than isolation and provides more confidence of the benefit of the overall outcome.
Consolidation – generally only the data that is needed at any time is processed. The result is that synchronisation typically operates on a subset of the total dataset. Well connected data systems often have the effect of reducing the overall number of applications needed and the quantity of data transferred.
Collaboration – shared data encourages a collaborative approach. In addition to removing data boundaries it can have a hugely positive effect on removing other silo type behaviour, hence encouraging a unified, more collaborative approach to a whole range of business issues.
Security – having multiple validation points generally leads to more accurate, robust and cleaner data. It makes it easier to track and audit and less vulnerable to accidental and malicious attack. This has important implications for data integrity, governance and disaster recovery.
To conclude, it may have been described as ‘unsexy plumbing’ but integrating data applications provides opportunities to reduce costs, streamline processes and scale up business efficiency – all the things management boards strive for and small businesses need to get a grip on. The beauty is that to have an effective data environment you don’t need to be an enterprise business, or to set up a huge warehouse managed data solution. For many businesses a few basic integration steps can be done in-house with a minimum of technical expertise.