Data-driven Change: Unglamorous Value of Small Things
Data-driven Change, (aka Data Transformation or Digital Transformation) is on the agenda for organisations of all sizes as we begin to build back after over a year of disruption caused by the Covid 19 pandemic. Organisations that could ‘go remote’ have seen value in Connected Working. However, they have also seen the gaps and weaknesses in their data capabilities laid bare in many cases. From information security gaps to data quality headaches to data governance challenges, the unglamorous value of small things is more apparent now. Managing data change will be a key strategic competency for organisations looking to evolve their data capabilities.
The Glamorous Headlines
Of course, you wouldn’t necessarily think that from media articles and case studies about the latest ShinyTech innovation that can, with the flick of a few dozen switches and the application of a monthly subscription, magically transform your organisation. If only life was that simple. For organisations to deliver value from data change management they need to lay unglamorous foundations. Things like data mapping, metadata, data modelling, and data quality management. To succeed in big data transformation and data-driven change you often need to invest in small data details.
This is the painful lesson of almost three decades doing work in organisations to try and improve data capabilities. And, today, even the smallest organisation can have enterprise level headaches when trying to get to grips with its data. The good news is that, for organisation that are smaller scale it is often a lot easier to tackle the process and people challenges that come with a data transformation. The challenge is ensuring the right technology approach to a sustainable data change.
But it’s important to remember that, with the increasing adoption of Cloud-based solutions for things like accounting, electronic signatures on documents, file sharing, document management, CRM, etc, even the smallest organisation can have multiple data repositories that have to be managed and integrated. This can get even more challenging if you change suppliers for any of these functions for any reason (planned or unplanned).
Evolving Business Models
Currently a client is having to radically redesign their core data model to match their current and future business. The organisation needs to evolve to support the needs of their current and future business strategy. This is a classic data-driven change.
The trigger pain point was reporting. However, the gap was a data model that could tie together disparate data from different platforms. Why? The client, like many businesses as they grow, had added systems and platforms tactically. The client lacked a core business information model to guide integration. Their model just about met the needs of their original business but was holding them back from the future. And the priority issue was reconciliation of financial reporting data to reduce the human effort required to get a timely and accurate snapshot of the business. A data transformation to unlock the unglamorous value of small things – in this case profitability and cost management.
The client is now working with us to define a business information model that will support their strategic objectives now and for the future. But the immediate focus is on driving a data transformation in their reporting and finance functions. Improvements in data integration and data governance will drive this change. The goal is to improve data quality and improve the organisation’s internal reporting capabilities.
The unglamorous need to reimagine data models to better support processes to deliver on business goals is all too often overlooked in the haste to deploy technology.
Data Transformation and the Accounting Function – Value in the Unglamorous Things
The accounting function is often a area ripe for data-driven change, particularly for SMEs. For instance, we are a long way from green screen TAS Books of just a few decades ago. Modern internet-enabled or on-line accounting packages allow small firms astonishingly powerful capabilities. For example, many modern online accounts packages offer features such as such as AI-enabled automatic book keeping. Similarly, if the adverts for the popular online accounting packages are to be believed we should all be able to see the heartbeat of our business with the push of a button on a smartphone app.
If only life was that easy. To deliver the promised value organisations need to be able to do a few key things:
- Enable the future. You need to activate and implement in a sensible and controlled manner the integrations and widgets that are necessary to enable the automation of future workflows. That means you need to understand what those processes are. You need to understand the flow of that data into your organisation and, ultimately, into your accounting system.
- Integrate the Past. If you want to have historic reporting on your year-on-year spending, for example, you’ll need to have that data in the new system. Management accounting and trend analysis requires us to have transaction level data. It’s not enough to have the year-end balance for Light and Heat.
Data-Driven Change: Quality is in the Eye of the Beholder
The perspective people bring to a data transformation is essential. For instance, my experience is that accountants often understand the core accounting issues of migrating data from an accounting perspective. The management of data-driven change and being able to put the management accounting and data analytics capabilities of the tools in the hands of the small business can sometimes cause friction. Accountants that are are accountants first and data wranglers second can leave small organisations that are growing under served. If your accountant uses Xero, you will (eventually) be moved to Xero even if you have been married to Sage or Kashflow for years. Changing accounting software (or your accountant) is rarely glamorous. Therefore, the process disruption needs to be worth the effort!
In other words, historic transaction data must be migrated and integrated (“Integrating the Past”) in addition to implementing basic accounting for today and tomorrow. Similarly you need to invest in planning for how any new features of the new software might be used. Look at the things that are resource-intensive in how your accounting data processes. What is it possible to automate? What is worth automating? How will it be done? Who will do it? How will you “Enable the Future”? That means thinking beyond the immediate scope of your balance sheet, annual accounts, and periodic tax returns to what questions you want to answer about your business from the data and planning for it. After that, you just need to go and do it!
Planning your Data-Driven Change
In conclusion. if you are investing in new capabilities to support new lines of business or simply evolving your management accounting capability, as a business owner you need to plan for change. It is important to bear in mind that most data transformations fail. The stark lesson from over 30 years of failure is that it is the fundamentals of data management that are the unglamorous keys to value. Above all, successful data transformation starts with a data-driven plan to unlock the unglamorous value in small things.
Castlebridge can help organisations (and even accountants) plan and execute their data-driven change. We can help you map the transition for your accounting metadata and processes. We can assist you in developing a Business Information Model. More than this, we can help change how the people in your organisation think about data. This will be a key data competence for organisation as the data revolution continues, so it makes sense for you to develop data literacy even in the small things.
Get in contact with us if you are planning a data-driven change or data transformation. Alternatively, check out our Consultant Clinic sessions if you have quick questions needing a quick insight!
[button color=”undefined” hover_text_color_override=”undefined” url=”https://castlebridge.ie/become-a-client” text=”Contact Us to See How We Can Help!” color_override=””]
While you are here…
You might also like to read my featured column on TDAN.com this month about the darker side of data monetisation and ransomware.