In the world of business strategy, a lot of pressure is put on the data we use to make decisions. This data is integral to how the modern organization runs – both in terms of performance and in terms of remaining in good standing with the jurisdictions in which it has offices – and it’s highly sought-after in large doses.
Yet data is a tricky thing. It can be an absolute gold mine, but it can also bring so many results and give us so much to look at that we end up confused and immobile. What is the data actually telling us? What can we – and should we – do with it? The predominant challenge for most businesses isn’t a lack of data but choosing which data on which to focus.
Data can also easily result in errors – look at the wrong number, or make the wrong assumption about what it means, and strategy could be thrown off-course – and can be erroneous to begin with thanks to corrupted input. Can we trust the data? How up to date is it? Are you looking at the same thing as your colleagues and understanding it in the same way?
When so much pressure and importance is placed on data for business strategy and growth, we must pay much more attention to how we source the data, how we optimize it and what we do with it once it’s in hand. Business strategists and legal operations professionals alike must be able to trust and rely on the data they use for tracking and decision-making, and they must be safe in the knowledge that the data they are using is the same as that which is being used across the organization.
This is why the importance of a single source of truth for entity management has become one of the biggest drivers of modern governance best practices. Creating a single source of truth for entity management ensures everyone is working from the same page, using the same data and analyzing from the same base – no more silos, no more guessing games.
What is the importance of a single source of truth?
“A single source of truth (SSOT) is a concept that an organization can apply as part of its information architecture to ensure that everyone in the organization uses the same data when making business decisions,” writes Margaret Rouse for WhatIs.com.
Creating this single source of truth – sometimes referred to as a single version of the truth or a golden record – aims to provide the organization’s people (employees, stakeholders and so on) with a federated view of organizational data. It’s a concerted effort to break down data silos and to mitigate the risk of costly errors that can arise when data integrity is compromised.
Running an organization on a single source of truth can bring many benefits, including:
- Eliminating duplicate entries of data
- Providing decision-makers with the right data at the right time
- Substantially reducing the time spent on identifying which recorded data is correct
- Iteratively improving the data intelligence capabilities of the organization
What is a single source of truth for entity management?
When an organization creates a single source of truth, data elements are stored in a system of record. In general data terms, this system of record aggregates data from disparate sources in a virtual database so it can be used for business intelligence or other analysis. In the case of entity data, however, the single source of truth tends to operate slightly differently, and takes on much greater meaning.
Those involved in entity management and governance know one thing: we are drowning in entity data, but the majority of organizations have no real insights into what that entity data means nor how it can be used to further the organization’s aims.
The single source of truth for entity management, then, takes on the dual roles of learned friend and junior dogsbody. It gathers the data from the disparate endpoints and provides a means of crunching the data to gain meaningful insights about the organization’s performance across multiple disciplines.
“As data systems become more complex, and oftentimes fragmented, business leaders seek to find the one piece of data from their various applications that should be relied upon for reporting a certain variable of the business,” writes James Kosur for Business Insider. “Once that data is chosen, all employees from across the business should rely on output from that platform to guide their business decisions.”
That same article quotes research from Adaptive Insights that found CFOs believe the biggest mistakes made when becoming more data-driven are to keep data siloed (69%) and having inaccurate data for forecasting and planning (40%).
The importance of having a single source of truth for entity management is clear: it helps to break down those data silos that result in mismanaged entity data; it helps to bring clarity and integrity to data used for decision-making; and it helps to align the entire organization, from the board down to the entity manager, and get them on the same entity data page.
Diligent’s Governance Cloud creates a single source of truth for entity management
It’s not just entity management that needs a single source of truth, though: the entire governance and compliance operation can and should benefit from this kind of alignment. Diligent’s suite of legal technology platforms – including entity management software, a board portal, secure file-sharing and eSignature capabilities – seamlessly integrates to create the Governance Cloud, an all-in-one modern governance ecosystem:
- Diligent Entities helps organizations to centralize, manage and effectively structure their corporate record to better ensure compliance mitigate risk and improve decision-making
- Diligent Boards provides the modern governance tools that allow the board to expand their reach outside the boardroom, as well as meet requirements such as the distribution of board meeting materials in a secure environment
- A secure file-sharing platform ensures entity data and documents can be shared both within the organization, and with third parties, securely and safely
- The eSignature integration makes the process of signing documents more efficient, less costly and less risk-prone while creating an audit trail for all signatories
Working with an entity management system such as Diligent Entities helps to create a single source of truth for entity management and extend the benefits of that single source of truth to other legal operations processes. It ensures the right information gets to the right people at the right time and in the right format to enable strategic decision-making based on robust and secure entity data.
Get in touch and request a demo to see how Diligent’s suite of governance and compliance software can help your organization to create a single source of truth for entity management.