Healthy appetite for Data or Reporting Obesity problem?

How bad data habits damage your bottom line

Having completed the first month of 2019, those of us who made New Year’s resolutions will be reflecting on our progress in keeping them. On a personal level, getting our bodies into shape is often a popular choice. But whether or not you’re one of the millions who’ve resolved to fight the fat, there’s a parallel scenario that’s definitely worth considering in business. And it has nothing to do with workforce lifestyle.

I’m talking about a condition I refer to as Reporting Obesity, which arises when a business consumes too much of the wrong kind of data. In other words, when people are devoting time to generating unnecessary and useless reports. Have you ever stopped to think about how much money that wastes?

Too much of a good thing
The ever-increasing digitisation of products, services and value chains (yes, Industry 4.0 has arrived) means (Big) Data is always on the menu. And having a healthy appetite for it is no bad thing. After all, (Big) Data provides insights which are key to making better informed business decisions in the fastest possible time. Keeping up with your competitors, let alone outpacing them, depends on it. But because the composition of (Big) Data is constantly changing, your organisation’s ability to digest it needs to evolve just as rapidly.

You need to resist the temptation to generate more and more reports, just because there’s more to report on, and limit yourself to the ones you really need. While ensuring accuracy. Creating a surplus of unnecessary reports achieves nothing other than diverting staff time and attention to pointless tasks. This is how Reporting Obesity develops.

Are spreadsheets your weak spot?
Reporting Obesity thrives in organisations where there are many spreadsheets. It’s especially prevalent in supporting departments, such as planning, process improvement and quality, which are indirectly connected with the data and harbour many ‘hidden’ processes related to gathering and processing information.

Apart from the risk all these spreadsheets pose when they contain business information that ought to be stored in a proper Enterprise Resource System, creating and maintaining them is very time-consuming. Just over a year ago, Digital Analytics provider Alteryx estimated (read more) that a typical advanced spreadsheet user spends 9 hours per week on this. That equates to around 10,000 euros annually, for each of them, being spent on unnecessary activities. With 5.5 million advanced spreadsheet users across Europe, that’s a staggering 55 billion euros being wasted each year in just one continent. From my own experience, 25% of FTE seems about right as a general figure. It can even be as much as 80-90% for the rare breed of data-savvy system super-users, the typical go-to people management entrusts with handling special data analytics requests.

Common temptations
If you think that having more/ big(ger) data creates more value, think again – only a fraction really does. The same goes if you think that state-of-the-art reporting tools in themselves generate value – you still need capable human beings to achieve that. And if you think that hiring more data scientists is the solution, you guessed it, that’s also not the answer – as a leader, you still need to ask the right questions.

Take control by demonstrating Data-Driven Leadership
Avoiding these temptations calls for excellent Data-Driven Leadership. Without it, there’s a high chance your desire for data-driven insights is simply creating an expensive reporting company within your company. You’ll end up with some good-looking dashboards, but no added value to the bottom line. Kidding yourself you’ve gained muscle, when actually it’s just fat.

Are you ready to get fit for the future?
To help you prevent or reverse Reporting Obesity, at the same time as harvesting more value from your data and realising positive business impact, we’ve put together a three-step plan for healthy Data-Driven Leadership which provides guidance for getting started. Check out our article on becoming a Lean, Mean, Business Impact Machine!

Ad de Grauw is a Senior Business Process Consultant at R&G Global Consultants in The Netherlands