How to prevent your company from losing up to a quarter of yearly revenue with resources you already have

July 22, 2020
According to MIT Sloan research, unreliable data and its inefficient management could cost companies up to 15-25% of yearly revenue, which, based on Gartner’s estimates, could sum up to €15 million on average.

According to MIT Sloan research, unreliable data and its inefficient management could cost companies up to 15-25% of yearly revenue, which, based on Gartner’s estimates, could sum up to €15 million on average. Bad data erodes clients’ trust and could even break business partnerships, as 19% of companies have already experienced. This is especially detrimental in industries where only long-term business relations and a handful of strong partnerships are pushing forward the daily operations.

Regardless of the core business, we all know the story of data. Companies are strategically investing in smart factories and production systems, automatization, robotics, and IT infrastructure. Digitization generates a vast amount of data, while documents and reports are accumulated across all sectors, from sales and development to supply and maintenance. The same data entry is found in multiple sources, but at the same time, it’s hard to locate and verify specific information.

As the amount of information is growing uncontrollably - according to International Data Corporation, it will expand from 33 zettabytes in 2018 to 175 zettabytes by 2025 - it’s imperative for companies to have a robust data management system in place. Information indeed holds massive potential, but when not used well, the data is restricting companies’ growth potential rather than thrusting it forward.

Increasingly bigger and hard-to-manage

Internal data of a company or a manufacturing plant is usually gathered and stored in individual silos of separate departments. During collaboration and partnership with other plants, buyers and factories, the same data meets external information, and joint data entries add to high diversity in quantity, formats and storage of information.

Certain data management systems like ERP, MES, CRM have proven to be very effective in gathering, sending and managing a vast quantity of data. But outside the niche they were made for, they don’t offer much connectivity or translatability of data.

More data silos, more unclarity

Modern production plants now use dozens of data softwares and apps, each with a specific way of integration and, usually, just a one-way communication with the system. And it’s this lack of communication with other departments that leads a business further away from wholesome and organized digitization of their operation.

Unreliable and hard-to-access data also has a serious financial impact on the companies. Increasingly stricter regulations demand secure storage and management of information, and spreading inaccurate and outdated data erodes the trust of competition and clients. Information and proofs of compliance with quality standards must be available and validated in the shortest time possible to avoid automatically incurred penalties.

This is actually a paradox of data digitization. Instead of providing a solution, bad organization could deter the current state - much like productivity tools reduce productivity. When it comes to valuing data, it’s therefore not about quantity or the technology used for its management. Instead, the data only brings value when it’s structured, updated, and transparent throughout the entire production and sales process.

According to Dr Peter Metlikovič, consultant to smart factories and process optimization, data management stresses salespeople out to the max, which inevitably shows in their sales performance. They spend nearly half of their work time sourcing and moving order data from one department to another, while the pressure from clients only grows with time. Low efficiency combined with high stress, unfortunately, leads many salespeople to quit the job, which only increases the pressure on the rest of the team and yearly sales targets.

“This unbearable situation could and should be improved. Only by gathering the teams of all the departments at one place and showing them a clear big picture of how things are currently done under their watch, they start to see the unnecessary issues but also room for improvement. To align all the units in a uniform process of data organization and management, we must create new methods. Once they’re all on the same page, things start to move smoothly - the accuracy of orders improves, which brings in more sales per employee and leads to the overall satisfaction of the whole team.”

It all starts with access, contextualization, and aggregation of data

Instead of upgrading individual databases, it’s thus far more effective to connect the siloed data systems and aggregate them on a central platform. There, the data is automatically sealed and protected from fraud, but also arranged both by categories and source of data, as well as by the time of data inscription.

In the process, the data does not leave its original location and remains where it was, as the platform only manages the data inscription or data registry.

Based on the gathered information, the platform presents a big-picture order process on a visual dashboard, which also allows external access to clients and partners.

The same process was implemented in the case of Iskratel EMS, the leading provider of info-communication solutions in Europe. As they were losing productivity and sales due to difficult tracking of production errors and linking them with supplier materials, a clear insight into the specifics of the order was essential. Authtrail built a proof of concept by aggregating data of production errors and connecting it with materials used in production. With a timestamped order history and a clear dashboard, Iskratel EMS gained a reliable means of locating the issue on time which efficiently prevents further damage.

Data, a competitive advantage

Authtrail’s CBDO, Miloš Petković, is welcoming the increasing attention that the value of in-house production and order data is receiving. Significant investment in the information part of the business is notable in Germany, Austria, and developed economies where Authtrail has already been proven successful.

However, a mile-long list of manufacturing businesses has still not tapped into their data-based potential. In the future, this could be the defining factor of a company’s progress and competitiveness in an increasingly tough market.

According to Petković, “manual management, security and transmission of data to interested parties are not only a thing of the past but also impossible in many cases. Companies already have the data at hand, and the technology exists, as well. The only thing they lack is connectivity to existing sources and creating value from in-house assets.”

“A thorough approach brings an array of benefits that our clients have already experienced - from fighting counterfeits and higher responsiveness to clients, to proving data authenticity, locating errors and solving complaints faster. It’s transparency, traceability and trust of data that add a previously-unseen value to the business,” Petković believes.

The value of data is what companies make of it

When it comes to the digitization of processes, the main benefit is that data is generated automatically as a side product in every process. That means that companies and manufacturers do not need to invest additional resources into upgrading the existing data systems.

While smart factories can be run by advanced technology, unused data can ruin the growth potential of manufacturing businesses. And this, fortunately, can be solved really easily.

Learn more about why data matters and how to make the most of your in-house assets.

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