The quest for a single source of truth

So, I arrive at my client and the CFO comes running over, “Adam, this sales report doesn’t tie out to the ledger. John needs these numbers now. You need to look at this ASAP.” Good morning to you, too.

I get paid partially because I stay calm. I remember that the client has legitimate revenue recognition policies which insure that a simple listing of invoices will never tie out the ledger. Ever. The CFO knows this and that’s why he rarely uses this report. But the big boss asked for certain numbers and this report looks it can provide the answer even if it can’t. Luckily, we have other options to get the information out and everyone calms down.

I thought about this while reading a decent article in CFO magazine. It discusses the search for a single source of truth&#emdash;how companies need to use technology to insure that everyone is literally on the same page. In the particular case, it analyzes how people caught in “Excel hell” use “Business Intelligence Software”* to solve their problems.

Many of you have experienced Excel hell. You can’t get what you want out of IT supported systems so you build spreadsheets. Then you link spreadsheets to other spreadsheets. Then Joe in marketing loves your spreadsheet and modifies it for his needs. And Stan loves that spreadsheet so he modifies for his needs. And then no two people have exactly the same numbers. This is Excel hell.

There’s only one problem as my story demonstrates. Better tools, while a great start, aren’t enough. Any company of a certain size has lots of reports. Unless you work really hard to insure that everyone knows what each report does, you’ll wind up confused. Like so many things, getting the single source of truth is partly a technology problem but even more so a communication problem.

Let me give you an example. What does “sales” mean to a wholesaler? Gross Price or Net price after discount? Including freight and other add on charges or just for the goods? Where do customer charge backs fit in? What about goods you ship as free samples? Do they count in total unit sales? I think you see all the possible ways to get confused.

Too often, people assume that their definition of sales is the same as everyone else’s. No matter what technology you have, unless you all agree on your definitions, you’re going to be out of luck. A single source of truth is an important goal. Excel is clearly not the answer in many situations. But once again, if you think technology alone can solve the problem, you don’t understand the technology and you don’t understand your problem.

* Business Intelligence Software is a whole range of tools to create better reports out of existing systems.

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