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I was talking to a group of professional services firms in Sydney yesterday (big thanks to FeeSynergy and Westpac) about data integrity and why it is important to create a data culture in professional services firms. During the Q&A, I was asked a question in relation to what you can actually do with the data once it is clean.
To me, there are four categories that clean data can assist with: Marketing, Business Management, Automation and Business Intelligence.
Marketing
If you collect and maintain the right data (watch this space for my post on crucial, useful and wasteful data categorisation), there are low cost and free tools that will allow you to analyse your client data to segment and target - which clients fall into which industry, what their spend is, how many services they consume, which services are they likely to consume, and so on. We can do so much with our databases in terms of connecting with clients and potential clients, and communicating on topics that matter to them, but as a profession I believe we haven't even scratched the surface.
Business Management
As competition increases, optimisation and efficiency will become more important. Where is the waste in your business? Are you analysing the time spent to deliver services? Working out the jobs that are resourced incorrectly, where we are picking up and putting down work, where we have capacity, and where the work needs to move to fill gaps? If you don't have a sufficient level of integrity in your data (or the right structure), what you analyse can be meaningless.
Automation
Everyone loves automation, but how many attempts do we see fail due to poor data integrity? We are doing quite a bit of Robotic Process Automation (RPA) work at the moment, where a robot (program) essentially mimics human interactions on a computer. This can save massive amounts of time (quite literally reduce hours of work to minutes), but only works where information is correct or structured. The other issue is having a lot of integrations between software (which I am a massive fan of BTW as it reduces the time to re-key), because incorrect data in one location gets spread to other locations. I've always said that automation "can make bad stuff happen quicker", and the data these tools are fed is a large part of the problem. Imagine being able to automate more of the tasks your team hates to do, if you only kept your data clean!
Business Intelligence
This is the big one for me! Most firms have their performance metrics (WIP, billings, debtors, targets etc) and workflow under control, but few have the capability to understand their own business. As accountants we focus on the financial, but the operational aspects of our businesses are just as important, yet often neglected!
For instance, having clean data means we can progress to higher understandings of our clients and team. Where team members are struggling, we can see by analysing time taken against benchmarks and highlight where additional training or mentoring is needed. Greater improvements can be made with the integration of people data from tools like Everperform and your practice management system to drive performance and behaviour.
Work out the profitability of each client, job and project - most firms I talk to can't tell me which clients are making them money and which ones are costing them beyond the amount of write-off. This then extends to an analysis of where the wrong people are working on a job (it's not that hard to work this out) and making an otherwise profitable job into a lemon. How quickly each client pays their bills, how long it takes each client to return queries, how many services they are consuming - the list is nearly endless, and best of all these are services you can then offer to your clients!
Creating the data culture
The best news is, if you create a data culture and keep data under control, the majority of this information can be analysed hourly, not yearly or quarterly or monthly. Imaging have your marketing targets on point, understanding the capabilities and capacity of your team at all times, knowing which clients to target and which clients want to work with you. This is not the stuff of pipe dreams - firms around Australia are starting to do this, which I know because we are helping them do it!
All of this starts with establishing a good data culture. We have been working for quite a while with firms on how to categorise, clean and maintain data - it is possible but we need to start developing the right mindset now!
A great article I read only this week (link here) had a quote from Alex Fleming that really resonates with the impact our data is about to have ...
"disregarding data in 2019 is like dismissing the internet as a fad in 1995"
If you don't know where to start, don't put your head in the sand - reach out, make contact, talk to us about your issues. To quote an old proverb, "the best time to plant a tree was 20 years ago, the second best time is now". Make the change now, a new financial year is only weeks away!