More than a decade ago, companies were focused on accumulating data. Collecting data was important as there was not enough to make informed decisions. Now, there is an overwhelming amount of data. But, companies are still not able to make data-driven decisions. This is because many companies still do not have a Single Source of Truth.
What is a Single Source of Truth?
A Single Source of Truth, or SSOT, is a practice of accumulating data from different sectors within an organization to a single location. This ensures that the data is standard across all teams, allowing them to make decisions from the same set of data without any discrepancy.
Companies that can have SSOT and data governance in place are more likely to make accurate decisions using data. However, many companies still rely on multiple sources of Truth.
How multiple sources of truth develop?
While companies understand the importance of being data-driven, many of them fail to understand the role that SSOT plays in their digital transformation. Many businesses still use data silos, which is not accessible by other departments. In addition to that, companies can have also have various sources of data – for instance, from product analysis, marketing analytics tools, customer support and apps (if they have one). These factors can lead to inconsistencies in analysis and obstruct the decision-making process.
For example, the product manager of a company can suggest that certain changes in the product will drive revenue. For this, he/she will request financing for the project. The manager has made the decision after doing an analysis based on the team’s set of data. He/she has found that the revenue gain is quite high as compared to the financial requirement for the project. However, the finance team, which has its own data silo, may find that the incremental revenue is less or not justifiable to the cost of financing the project. Either of these data sets can be true.
Benefits of SSOT
There are many advantages of using SSOT. Here are a few:
- It gives a central source of accurate metrics that can everyone in a company can depend upon.
- It helps boost decision making as teams don’t need to debate about metrics due to an uniform and single source.
- SSOT supports swift and east access to key performance indicators and driver metrics
- It helps develop a data-driven culture in the organization as the data can be trusted.