Over the past few years, the environment in which decisions have to be made has become more complex, and some boards could be feeling under pressure if they are planning to make capital investments or considering M&A activity. Others may be looking to recession-proof their businesses by restructuring their cost base or seeking to mitigate supply chain risks.

In a complex decision-making environment, boards can take some comfort in the fact that if the business has historically performed well, it is likely that they are asking the right questions. For example, taking a holistic approach to demand signalling from both a customer and supplier perspective will give a business the best chance of success despite significant market volatility.

However, to continue to do this, a board must be able to trust in the data received, as there is no better way to maintain competitiveness than having reliable data that acts as 'a single source of truth' for the business.

There is no better way to maintain competitiveness than having reliable data
As such, where businesses used to have to justify spending time and resource on creating a data strategy and method of visualisation, it is now more common for businesses to justify why they don't have one, as it has become an integral part of 'business as usual'. But how can boards ensure that they are successfully using data to make the right decisions at the right time?

The first step is for boards to be clear on exactly what they need to know to best serve any decision making. This initial examination is vital as boards seek to build a reporting system around the questions that they are trying to answer, ensuring that data is both relevant and insightful.

A single source of truth

Next, boards should ask themselves where the data strategy sits and how it is managed to ensure that the process is efficient and oversight is clearly and easily maintained. Thirdly, they should commit to a 'single source of truth', where they can be assured that the data that they are basing decisions on is accurate, timely and crucially undisputed by the rest of the business.

This single source of truth is vital and will inform all business decisions, so a fourth step should involve examining the data critically and looking for internal discrepancies. Very often problems occur as different departments record data in different ways and to different timescales- something that can be further exacerbated by a merger or acquisition, where two sets of data need to be integrated. The solution is to discover the root cause.

For example, if it is discovered that one team is back posting financial numbers, this could skew the data that the board is seeing. The root cause in this instance is a process issue, which can be easily solved by clear communication to encourage everyone within a business to input data using the same method and timescale.

Finally, once these steps have been agreed and the process is under way, this new method of reporting should be viewed as the first step in a longer journey. The real returns will come in subsequent months as the company's data maturity grows, giving boards better oversight of business performance and enabling them to make decisions rapidly.

An example of these returns could come in the form of mitigating supply chain risks by giving the board greater visibility of which suppliers are underperforming and which may require renegotiation on costs. Better data could also yield results as businesses seek to strengthen the resilience of their supply chains; allowing boards to weigh up the pros and cons of alternative sourcing or nearshoring strategies. Not only this, but better, more reliable data will allow businesses to work with the supply chain to increase resilience by benchmarking cost and encouraging suppliers to report data as close to real time as possible, allowing for quick and informed decision making.

While there are many tools on the market that profess to solve the needs of any business, boards should remember that it is the quality of the data that counts. It is accurate and reliable data that will achieve results, not good-looking tools that simply don't provide answers to the right questions. Having a clear data strategy and method of visualisation in place is vital, and for those who require more support, engaging a trusted partner that is able to create solutions to meet their needs is an option worth exploring.

Using data to answer the right questions is key, and boards should aim to create a trusted, single source of truth. This will help them to make the right strategic decisions in today's complex business environment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.