Why your company should care about its data

Whether your company is big or small, you need to look after your data. It is the foundation of many aspects such as financial (bids, purchase orders, invoices), processes (maintenance schedules, inspections, deliveries) or compliance (health & safety, statutory recordings). If the data is wrong there could be serious implications.

Imagine the following simple scenario:

There is a buzz around the office as an important bid is prepared which could make a big difference to Supreme Contractors Ltd. The construction effort involves elements of labour, materials and hire of plant. The team getting the bid together goes to work. Henry has a copy of the labour rates (which he used previously) and sets to work based on the drawings provided. Similarly, Wendy deals to the materials and uses last year’s pricelist from the regular supplier which she keeps in her draw for reference. Meanwhile, Andy found a spreadsheet somewhere with some equipment hire pricings.

After the bid has been submitted and accepted as the winning bid, euphoria sets in. 12 months later however, Supreme Contractors Ltd is in big trouble as they have started to realise that their bid was severely under-priced. So what happened?

• Henry’s labour rates were significantly out-of-date as recent pay increases had not been factored in. Also, a review of standard mark-up rates had not filtered through to Jim’s copied spreadsheet

• Wendy did not rely on the companies’ procurement system to retrieve the latest pricing. As construction activity hit an all-time high the materials pricing had increased dramatically for some critical supplies

• And you can guess what the story was with Andy’s pricing…. the spreadsheet was ofcourse out-of-date!

So here are a few simple rules you can follow to prevent similar scenarios happening within your company:

• Maintain your source data in one place, and one place only. If you have business systems in place (e.g. a procurement & inventory system), that will be the place! Your staff need to be made aware where the sources of information are, and that they can trust the data they get from those sources (and those sources only!). It’s called “the single source of truth”.

• Copies (especially of spreadsheets) tend to start living their own lives. So here are some tips:

• Avoid making copies in the first place if you can help it

• If you must copy something, date it so you know next time that your data might be out-of-date

• If you use a copy, try and update your source data within your copy before you start work on it

• Reserve an archive area for spreadsheets that are no longer valid, to prevent them being used again by mistake

• And always verify that your assumptions (e.g. pricings in this case) are correct!

I can help you with putting processes and disciplines in place to make sure the above doesn’t happen in your company. Contact me on 021 1488814 or e-mail me on michel@bizintelligence.co.nz.