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Practical work is always a bit chaotic, especially if you manage a small company where everyone serves multiple roles. In this environment, it’s nearly impossible to worry about organising your data while you are rushing to complete three tasks at once. As a result, important bits of business data can be found literally anywhere – on servers, on thumb drives, in download folders, even in Viber messages on private phones. You don’t need an expert to tell you this chaos is harmful to your business, but few small business owners realise just how many aspects of their business operations are suffering due to this state of affairs.
Incomplete data leads to short-sighted decisions
It sounds obvious that missing a single piece of the puzzle can cause you to misinterpret the big picture, but business owners often fall victim to this fallacy. When crucial information is too broadly dispersed, the best that decision makers can do is to extrapolate the pieces they can readily see. This sometimes leads to mistakes that could have been easily prevented had corporate knowledge been accumulated and systematised. The financial cost of just one missed opportunity can be greater than what it would take to straighten up and streamline the data, so the math is very simple. If you delay organising your data until ‘things cool down a little’, you run the risk of ending up in the red due to inability to properly evaluate trends and make rational decisions based on facts.
Time spent searching for data is time you will never get back
In theory, access to business data should accelerate all core processes and make individual employees more effective. The reality on the ground is often much different, as workers sometimes spend hours just looking for accurate contact info or the latest performance figures. Things tend to get worse as the company grows and additional data sources are introduced, until even the most experienced employees can’t remember where some of the older data is kept. Most SME’s stand to gain hundreds of man/hours per month just by cleaning up their data structure and reorganising their databases in a way that helps rank and file employees do their jobs. It’s safe to say that practically every company would make more money if it suddenly got a whole lot of free manpower!
Data security requires centralised data storage
Erratic data management presents a serious security challenge that could manifest at the worst possible time and cause enormous damage. From accidental data leaks due to lost phones to vulnerability to planned attacks, organisations without a centralised data storage system are exposed to a lot of threats. It is virtually impossible to implement effective security measures when even company management is unaware of all the locations where key data may be found. What’s worse, with a wide dispersal of data it becomes extremely difficult to ascertain whose fault it is when security breaches occur. Most alarmingly, this could even entice someone into consciously selling customer data to a competitor or releasing internal reports to potential investors.
Bad habits die hard – the impact on corporate culture
When no one is responsible for proper data storage procedures and there is no accountability on any level, the employees tend to get complacent and just do whatever is convenient. Once this kind of attitude becomes prevalent throughout the company, it is notoriously hard to stamp out even after a new data system has been installed. That’s why it’s absolutely essential to put a solid data management infrastructure in place before the company starts growing aggressively. Ownership of data and levels of access should be clearly defined, so that it’s always possible to identify which person is responsible for updating the numbers and adding them to the main database. Good habits take much longer to build than bad ones, but once they take hold they can be just as resilient.
Performance assessment and promotions
In the final instance, atomised data prevents the top managers from accurately evaluating the contributions of each team and individual. It’s much easier to trick your boss into thinking you are doing a fantastic job if some of your stats are buried on a hard drive in a different department. The problem is more pronounced in larger, geographically dispersed companies where managers don’t have daily contact with all team members, but small and medium enterprises are susceptible as well. Lacking the sufficient quantitative input, managers tend to use their subjective judgement and often pick the wrong people for promotion. A centralised, highly responsive information system is necessary for truly data-driven decision making and empowering the most capable people based on merit rather than impression and popularity.
How to fix this mess for good?
The answer to this question depends on how large and how entangled the mess actually is. Micro companies that don’t collect a lot of data could probably resolve the issue with a few internal rules and better oversight. Businesses that routinely handle large quantities of information probably need professional help to bring all the data in order and avoid some of the negative consequences described above. While this may sound scary, data aggregation is not very complicated (nor expensive) and can be performed relatively quickly. Of course, shiny new databases won’t be worth anything without a company-wide effort to be disciplined when acquiring, storing, or copying business information. This effort starts at the top and must be sustained over a long period in order to become the norm.