Most successful businesses don’t make critical decisions based on gut feelings or assumptions. They use data—a lot of it.
Data is the foundation of today’s businesses, impacting everything from operations to compliance. This makes the accuracy of that data a critical factor in a business’s success.
Let’s take a closer look at the role of data accuracy in driving business outcomes, factors that negatively impact data quality, and how to achieve and maintain highly accurate data across your organization.
How important is accurate data to business success? Consider this scenario: You are the CFO of a large health insurance provider that relies on financial projections to set policy premiums.
Inaccurate data in a critical spreadsheet introduces errors into the calculations, leading the company to set premiums lower than necessary. As a result, the company pays out more in claims than it brings in through premiums, causing significant financial and reputation harm to the business.
That’s a fairly simplistic example of how data accuracy can affect your business. In reality, the potential impact is much more complex and far-reaching.
Here are eight ways that data accuracy benefits many different elements of your business:
Accurate analytics allows leadership to make informed decisions that could impact the overall financial health and strategic direction of the organization.
Accurate data helps businesses streamline operations by optimizing processes, identifying bottlenecks, and improving overall efficiency.
Reliable data helps businesses proactively manage and minimize risks, including financial risk, unfavorable market trends, and compliance issues.
Businesses leverage data to identify cost-saving opportunities, reduce waste, and ensure financial resources are allocated effectively.
Finance teams need accurate data to create budgets and forecasts, set financial goals, and prioritize resources.
Businesses rely on accurate data to ensure they stay in compliance with legal requirements, industry standards, and internal governance policies.
Accurate financial data is crucial during external and internal audits to demonstrate compliance, transparency, and the integrity of the business’s financial operations.
Accurate data provides relevant and reliable information that employees can use to work more efficiently and productively.
Understanding why data accuracy matters is only one part of the equation. You also need to be able to recognize factors that may be sabotaging your organization’s data quality.
Some of the most common sources of data inaccuracies include:
Data silos and fragmentation
Data integration issues
Incomplete or outdated data
Lack of data governance
Poor data quality controls
Human error and misinterpretation
Data migration challenges
Lack of standardization
Legacy systems or outdated technology
Data complexity
Once you have identified the source(s) of your data quality problems, you can take appropriate steps to remediate them by implementing a few data management best practices.
Automating validation and verification helps identify and correct errors, inconsistencies, and inaccuracies in your organization’s data more quickly and reliably than doing it manually.
Data governance provides a structured framework that incorporates standards, documentation, validation, security measures, accountability, monitoring, and other elements that ensure data is accurate, reliable, and fit for its intended use.
The right master data management (MDM) solution improves data accuracy by providing a centralized, consistent approach to managing data across the organization.
Key capabilities of an MDM solution include:
A centralized data repository
Data standardization
Hierarchy management
Data validation and enrichment
Audit trails and version control
Your business’s success depends on the accuracy of your data. EPMware can help ensure the data that is fueling your business intelligence and analytics is always accurate, consistent, and accessible.
EPMware combines metadata management and data governance capabilities in a single platform, helping even the most complex enterprises create a single source of truth for their data.
EPMware’s out-of-the-box plug-and-play adapters provide seamless integration with many ERP, EPM, and CPM solutions, including all OneStream, Oracle on-prem and cloud EPM, EBS, Fusion, and SAP applications.
Want to learn more about the importance of metadata management and data governance in today’s information-driven business environments? Check out this comprehensive enterprise metadata management resource.