Data Integration, The Key To Profits

Every data silo you allow to exist costs you money, decreases your flexibility, and reduces your profit. Here's how to change that.

Data Integration

When a business starts out, as a sole proprietor ship or a partnership, data integration is pretty simple. A sole proprietor does all his data integration in his own head. Partners achieve data integration by talking a lot. As the firm grows, data integration becomes more difficult, but no less important.

If you hire a Sales Manager, you have to remember to tell her that you met a prospect on the airplane and promised someone would call. Conversely, your Sales manager has to remember to enter data into the Customer Relations Management (CRM) software so everyone else knows how the call went.

In the beginning, financial data is easy to track.You read your checkbook balance. Integration of financial data with sales and production data was similarly easy. If you had gotten paid, you had money in the checkbook to buy supplies you needed for production.

However, the bigger the organization gets, the more data there is and the more data needs integration. As you create additional organizational units and open more offices you disperse the data further. The key to the success and profitability of your company depends on how quickly and how well you achieve data integration.

It's not enough to do a good job of collecting sales data within the sales department. Even bringing together the sales data from all offices around the world isn't enough. You have to integrate that sales data with financial data and integrate both of them with production data.

The one advantage a small company has over a large one is its ability to move quickly. This flexibility and nimbleness is facilitated by the greater speed with which the smaller organization can receive, integrate, and interpret data in order to make decisions. Given that a larger company has a greater ability to obtain data, the fundamental advantage is in data integration in support of the decision making process. The more you can make a large organization replicate the data integration speed of its smaller competitors, the better able it will be to compete profitably against them as well as its larger competitors.

To Each His Own?

Every unit in your business will be receiving data. They know they need to process the data to provide answers. They don't feel they have time to wait for a coordinated effort, so the push ahead with solutions that are available to them. Usually this means small, desktop applications, databases built and stored in spreadsheets or flat-file database programs, silo-ed solutions. As they use these solutions, they become more comfortable with them and more dependent upon them. This makes it harder for them to give up these solutions in favor of an integrated solution.

Think of the difficulty the people in your Thailand office have in communicating with those the Mexico City plant or the Japanese with the French. The same is true with data exchange between the recruiting application and the accounts payable software. Even the New York office has difficulty understanding everything said by the visiting executive from the London office despite what is supposed to be a common language. So it's easy to see why even the custom accounts payable application may not always properly exchange data with the third-party procurement software.

You provide a communications interface for all your offices through a common language that all of them can speak, probably English, even if it's with differing levels of fluency. Achieving cultural integration among the people of your different offices is more difficult and more time consuming, but it is definitely worth the investment. The same is true of your data. It's not enough to be able to exchange data between pairs of data silos. You have to achieve data integration of all your data to truly compete at your best.