When drawing insight from data to inform decisions, it’s crucial to have the right data available. The best scenario for decision-making is a single source of truth.
Leveraging their data in this way after a data transformation project, Netflix save $1 billion per year on customer retention. A single source of truth lets them see the big picture and understand what's important to the business. This enables them to constantly see where they need to go next to maximise growth.
A single source of truth is a holistic, complete, and accurate representation of data. It’s a key concept in data management because it provides you with a complete, real-time view of your business and its performance.
However, whilst the best scenario for decision-making is that single source of truth, the reality is that data is often stuck in silos, making it challenging to create a holistic view and understand what's important to the business. This is why most organizations have multiple sources of truth with data often stored in a variety of places.
Building a single source of truth is about bringing and consolidating siloed data across an organisation into a single reference point. This allows for data enlightenment. As a result, you can capitalise on your enterprise data and drive growth with better decisions.
The more your data is siloed, the more you lack confidence in basing your decisions on that data. Therefore, it's essential to avoid using disparate systems for data collection and data access and have all relevant data in a single source.
If you're lacking a single source of truth, you end up using gut feel for many of your decisions. This means that not all perspectives will be considered which may ultimately have a negative outcome for your organization.
This can result in decisions becoming skewed if based only on the data that is readily available. Organisations tend to skew decisions on what data is ready: for example, if accounting data is readily available, while maybe CRM data isn't, so accounting data would impact the decisions more. All the data you use must be congruent to your needs. It is your job to select the appropriate data points for your goals.
Let's imagine a scenario where you're a sales Director driving an initiative. You'll be likely to have your decisions influenced and exaggerated by the data closest to you. You might have all data from CRM but might not have data from operations or finance. As a result, you'll lack true insight on identifying new business opportunities
despite it being essential for your role. There are no shortcuts when creating a single source of truth. It takes time, resources, processes and systems to aggregate your data. Consensus across the functions is essential.
If we then imagine a sales Director at another company with access to data enlightenment, we can see that they are fully informed on what good looks like. They can see churn rate, total spend, stickiness and profitability of customers over a certain period of time.
They can identify in fine detail the characteristics of a great customer, which also means they're able to plan campaigns to actively go after such customers.
The starting point is to gain an understanding of what's important to the business. You will need to prioritise the most valuable data. For example, different geographies may have different priorities. This is valuable work and is worth the time invested.
Once you know what is important, look at where the data resides. Then pull those data stores together into a single data store that is connected to your decision-making platform. Again, this will take time. There may be bespoke software required to enable you to pull data from in ways you haven't before, or haven’t even considered.
Don't get weighed down by having exactly everything together. Focus on what creates business value instead.
For more information on how data science informs sales management, keep an eye on our blog. There will be more insight later in an upcoming article. You can also read more about our AI product or contact us to talk about solving your challenges.
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