GXS Insights

What Can One Version of the Truth Really Do for You?

By Mike Walton, Chief Solutions Officer, GXS

Sir Francis Bacon, the English philosopher, stated, “For also knowledge itself is power,” which is often paraphrased as “knowledge is power.”
-Mediationes Sacrae (1597)

In the last twenty years much has been written on the subject of data as an asset and the value of information. Even if you are not familiar with its origin, few would deny the wisdom of Sir Francis Bacon’s philosophy. In fact, it is unlikely that there is anyone whose personal experiences have not proven this to be true.

Who has not suffered from the effects of incorrect telephone numbers, email addresses, passwords and IDs, flight times or dates, hotel reservations, bank account details, credit card/tax payment schedules, birthdays and anniversaries?

Most people recognize that effective management of this kind of information is a pre-requisite for an orderly life and for the protection of financial resources. As a result, many people often maintain records in a spreadsheet or PDA and work hard to keep them up to date. We could call it a personal single version of the truth. However, maintenance of multiple versions equals opportunity for differences and differences equal error and error equals cost (either financial or time.)

In our personal lives all bad data has a price ─ranging from a missed phone call, to a late credit card payment, to an untaken, non-refundable vacation…and sometimes even divorce. It is intuitively and clearly obvious to us that the benefits outweigh the cost.

How well does this knowledge transfer into our working lives? The data required by a business is more complex and abundant. It may not always be clear why it is required, the intent of its use, how it is used, what the price of it being incorrect is, or who pays this price. It is equally likely that the cost of error has a proportionately greater affect on purchasing, invoicing, logistics and finances. And unlike one’s personal life, having good business data opens up many incremental business opportunities. However, the decision to create a single version of the truth may not be ours.

For many organizations data is held in many places. It is invariably incomplete, inaccurate, out of date and not designed for its’ intended use. Four hundred years after Sir Francis Bacon identified the opportunity it often appears that the supply chain treats data with great disdain.
 
In reality there is often recognition of the problem, but for many organizations it is considered too difficult to solve. A business case has to be built. An ROI is mandated. The cost of the problem cannot be quantified because there are no measures in place. Collecting the data would require co-operation from many people in many other departments─not all of whom believe in sharing data. The cost of the ‘solution’ is usually more visible and it is invariably high. Then there is the nagging doubt that it will not really solve the problem. Senior management is of the view that they previously paid to fix this problem.

So what does it take to actually solve the problem? The solution has moved beyond simply choosing hardware and software. The true obstacle to success today is found in the data infrastructure.

There are six components to an industrial strength data infrastructure. Thought has to be given to:

• Utility – to what use will the data be put, both internally and externally
• Completeness – defining all of the data, including at the lowest level of detail possible. Expect that the definition of completeness will change continually
• Accuracy – the data must mean what it says it does. Are manufacturing/business processes aligned with this aim?
• Consistency – create one value for any piece of information. Data can be accurate but useless
• Topicality – the data must be kept up to date
• Conformity/Re-usability – the data must be in a form that can be readily re-purposed for other users. Consideration should be given to data re-purposing tools

Every company is different. There is no generic ROI formula that will apply to all. The few companies who have achieved the most have done it because of limited anecdotal evidence or because they believed it was the right thing to do.