Like me, you are probably surrounded by data via tools like colorful Sales dashboards and sophisticated Excel reporting visualizations feeding decision making. But how do you know if report numbers presented are complete, accurate and trustworthy? Do you ever wonder where the figures came from? You may periodically ask, “How can my Gross Profit be so far off?”.
Depending on what your company sells, e.g. lots of SKUs sold through channel partners, the problem of trustworthy data may be a significant challenge. A simple, out of date cost of goods sold measure may skew profitability and return on investment KPIs in a very big way and may go undetected for months. This is common in reporting which is heavily manual in nature or in outdated third-party solutions.
Where do data problems typically occur?
The response to this question can be complex, thus, only a few of the likely areas are cited here. Typically, a formal review of your specific data workflow processes is required to truly identify weak links:
- Data is Incomplete. All too often, sales figures, shipment data, etc. may not be entered completely at the time Sales reporting is being performed. Channel partner store sales may not be reported concurrently making a Return on Investment KPI of 28% today turn into 22% in a couple of weeks when all store data is received.
- Data is Out of Sync. Most of the time, enterprise reporting solutions rely on input data from several systems and, if updates from these systems are not accurately applied, report data will not be synchronized. This situation can generate errors in the data and, if some input is lost, the errors may never be found.
- Non-conformant data causing issues. Inputs to enterprise reporting may contain incorrect data (bad COGS, incorrect Discount Price) which get propagated into formulae and output dashboards. Detection of non-conformant data through business rule checks may be inadequate to detect all conditions or properly dispose of the bad data.
Finding the time to identify sources of data problems and build the counter-measures to ensure data completeness and accuracy is hard. This is fundamentally why these types of data problems linger in outdated reporting solutions.
Your organization needs to do data better to drive an elevated level of business growth and profitability or else data problems can pose a risk to future decision making.
So what can I do about these problems?
Triage of bad data in analytics is necessary to address the areas of great business impact. Tracking of data problems in an issue tracking solution is paramount so that problems are not lost and to support prioritization. In addition, the following activities can help to begin the process of bad data mitigation:
- Formalize a Business Data Dictionary. Each organization needs a glossary of global financial business terms and formulas supporting calculations of key KPIs. Any regional/market dependencies should be noted and examples of calculations provided.
- Publish a formal schedule of updates from input data sources and reconcile data. Business users should know when reports and dashboards will be updated with most recent data. Processes to validate and reconcile incoming data should be developed. The degree of reconciliation should depend on the importance of data to reporting.
- Reports should be marked with data status indicators. If live dashboards are reporting weekly/daily Sales performance, visual indicators must be provided to reveal if data is complete for a particular Sales channel. This will alert dashboard users of potential for incomplete data.
- Exception data clearly identified. Non-conformant data should be identified through business rule validation and made available for review and overrides. Trapping bad data from entering the reporting system and corrupting output KPIs is essential. Data operations staff must be provided tools for exception inspection and override.
These basic steps are a part of a larger Data Quality program which should be established within your Information and Analytics department. Driving better corporate performance is possible with an orchestrated initiative to enhance the quality of your strategic reporting systems and replace outdated solutions.
Saama Analytics uses best practices with its clients to overcome data challenges like these and deliver solutions that enable optimal business performance. The Saama Analytics’ Spend Optimisation solution, is an example of modern, advanced sales analytics which accepts a wide variety of data inputs and provides data quality measures to ensure accurate reporting. For more information, see https://spendo.ai/.
This Blog was authored by George Shemas, a Principal in the Saama Analytics Client Care organization overseeing its Consumer Goods practice and having decades of experience building difference-making analytics.
This blog post first published on the Saama Analytics website and is reproduced here