It’s no secret that the success of any organization is directly linked to the quality of its decisions. Whether it’s a board-level assessment of strategy, acquisitions, and major projects, or the daily frontline choices made throughout the enterprise, all decisions can have an immediate, significant, and lasting effect on the success of the organization.
But as the pace of business continues to quicken, there’s less and less time to collect data and consider it. While time constraints have increased, so has the volume of data in our organizations, making it harder and harder to find the information needed to have a “single point of truth.” In its “Digital Universe Study,” IDC estimated that the volume of global data in 2005 was 130 billion gigabytes. This grew to 1,227 billion gigabytes in 2010 and is forecast to grow to 7,910 billion gigabytes in 2015.
Compounding the challenge, scrutiny by regulators, the media, and the community is at an all-time high. Small errors can be quickly magnified in social media, damaging reputations and requiring swift and sometimes expensive responses.
So, while we have unprecedented access to our data, the value depends on its quality. Before using data as a basis for a business decision, use these five questions to assess information:
Question 1: Is it reliable? Obviously, the more reliable the information – including how it is summarized and presented to the decision-maker – the better. Take an honest look at the process for providing the information to determine the level of risk that it might contain errors that matter. Consider:
- Is the information complete and accurate? Does it come directly from the corporate systems, where it is secured and subject to internal controls, or is it massaged in spreadsheets before being presented?
- Are adjustments made to the raw data based on an analyst’s judgment as part of the reporting process? If a report is from a data warehouse, is the data store secure and are all the reports working the way they should?
Question 2: Is it current? Is the data up-to-date, reflecting the current situation? Or is it based on financial statements that are weeks, if not months, old? Out-of-date data results in “managing through the rear view mirror,” trying to chart a course based on where you’ve been rather than where you are going.
Question 3: Is it timely? Is the information there when it is it needed, or is there a lag between request and fulfillment? If the first set of information doesn’t offer a complete picture, how long does it take to drill down into the data? Is it possible to ask multiple questions and get the answers fast enough to make quality decisions? Waiting hours or days to get needed insight is a competitive disadvantage; there’s always a risk that waiting for information will result in losing a window of opportunity.
Question 4: Is it useful? Having to wade through a stack of reports is not useful. Data that requires running additional reports or making inquiries because the information is unclear, or raises more questions than it answers, often does more harm than good. Instead, having the required information presented in a clear and easy-to-understand way is key. The old expression rings true: there’s a big difference between data and information.
Question 5: Is it at-hand? Global businesses are running faster than ever, and executives and managers need to make quick and educated decisions no matter where they happen to be. Information must be readily at hand anytime, anywhere. If it’s on a desk somewhere and a decision must be made quickly in the field, opportunities can slip away.
These five questions can be asked by decision-makers at any level of the organization. Executives and managers can use them to ensure they have the information they need to run the business when they need it, where they need it, in a useful form. Where there are gaps, corrective action can be taken quickly. Internal auditors can use these questions when they assess decision-making methods, which are part of almost every business process.
The pace of business is accelerating, but, thankfully, technology is also improving in its ability to deliver quality information. Queries that used to take nine hours (searching more than a billion records) can now be completed in just a few seconds, making it possible to ask follow-up questions and get answers before making a decision. Predictive analytics is also maturing, enabling more accurate predictions of future market activity.
While nobody has a crystal ball to tell the future and guide choices, reliable information gleaned from solid data is the next best thing when making business decisions. Don’t rely on anything less.