A commonly heard phrase from businesses and organisations is “Data is a core business asset.” If so, why do so many organisations that make this statement display symptoms which indicate the opposite? These symptoms include inefficient or ineffective business processes, inconsistencies when interacting with different areas of the organisation, and inconsistent organisational reporting.
We strongly believe that the absence of a data-centric approach in IT systems’ architecture is the underlying cause of these issues. A data-driven approach is crucial to address the root cause of these problems and ensure efficient operations.
The issues at hand
- Inefficient Business Processes: Traditional architectures often lead to siloed systems that are optimised for specific business processes. However, this siloed approach can hinder the flow of data across different functions within the organisation, leading to inefficiencies and redundancies.
- Variable Customer Service: Inconsistent data across different systems can result in varying customer experiences. For example, a customer may receive different responses or offers when interacting with other departments due to the lack of a unified view of customer data.
- Difficulty Producing Consistent Organisational Reporting: Reporting becomes tedious when data is scattered across multiple systems or is inconsistently structured. This lack of transparency and organisation can lead to discrepancies in reports and make it challenging for decision-makers to have a clear and accurate understanding of the organisation’s performance.
"We strongly believe that the absence of a data-centric approach in IT systems’ architecture is the underlying cause of these issues."
- Rob Hawken, Senior BI Consultant
The core problem
In our experience, the crux of the problem lies in organisations having inconsistent data for core entities like customers, suppliers, and products. This inconsistency is often a result of IT systems that are designed to cater to specific business processes with little concern for data interoperability with other systems.
Understanding the cause
The traditional approach to IT architecture focuses on building systems tailored to individual business processes. While this may seem efficient on the surface, it often results in fragmented IT landscapes, making it challenging to get a holistic view of the business and to respond quickly to changing market conditions or internal needs.
For instance, a sales system may have its own database schema to track leads, manage customer interactions, and forecast sales opportunities, while a billing system may have a completely different schema for managing the same customer’s data. This lack of data standardisation and interoperability makes it difficult to maintain consistency across the organisation.
The solution: data-centric architecture
Embracing a data-centric architecture offers a solution to these challenges. Instead of designing systems around specific business processes, data-centric architecture places data at the centre of IT systems. Here’s how it works:
- Unified Data Model: Adopting a unified data model ensures consistency in how data is structured and managed across the organisation. This means defining common data entities such as customers, products, and suppliers and ensuring they are shared and used consistently across different systems.
- Data Integration and Interoperability: Data-centric architecture emphasises the integration of systems to enable seamless data flow between different functions. By breaking down silos and establishing data interoperability standards, organisations can ensure that data is available where and when it’s needed, leading to more efficient processes and improved customer service.
- Master Data Management (MDM): Implementing MDM practices, such as building a unified data model and centralised repository and creating policies and procedures for managing master data, helps organisations maintain a single, accurate view of core data entities. By centralising the management of master data, organisations can avoid inconsistencies and discrepancies, ensuring that everyone within the organisation is working with the same reliable data.
The benefits of data-centric architecture
- Improved Efficiency: Streamlined processes and data integration lead to more efficient operations, reducing redundancies and improving productivity.
- Enhanced Customer Service: A unified view of customer data enables personalised and consistent interactions, enhancing the overall customer experience.
- Accurate Reporting: With consistent and reliable data, organisations can produce accurate reports and gain valuable insights for decision-making.
In conclusion, transitioning to a data-centric architecture is essential for organisations looking to overcome the challenges of inefficient processes, variable customer service, and inconsistent reporting. By placing data at the heart of their IT systems, organisations can unlock efficiency, improve customer service, and gain a competitive edge in today’s data-driven world.
If you believe data is a core business asset, treat it as you would your most valuable physical asset.
Do you need help planning and building data-centric architecture to meet the needs of your business? Please get in touch, we'd love to help.
