IQ Improvement Starts Here
Opportunities and Options for Gaining Better Insight and Control of Enterprise Performance

By Lee Dittmar and Jane Griffin
Illustration By Josh Cochran

Six Guiding Principles for Getting Started

1. Begin Somewhere
The journey toward improved IQ almost always starts with reducing unproductive complexity, which is, granted, a mammoth challenge. Why does the journey have to begin where so many fear to tread? Because simplification, repeatability and standardization make it easier to get information. The good news is that you can approach the task of reducing complexity from multiple angles, but you don’t have to tackle them all at once. Consider these examples. From a data standpoint, if widgets were widgets everywhere in the company, it would make it easier to count how many widgets you have. From a process perspective, if the company bought things the same way through a standard supply chain system, as opposed to purchasing things differently from multiple vendors, it would make it easier to get information about what you were buying and from whom. The concept can also be extended to IT. If a company had one system instead of 10 disparate ones, then it would be a lot easier to house, maintain and extract the appropriate information when needed. Applying this “less is more” philosophy across organizational hierarchies, data, processes and systems is a good way to start thinking about what types of changes will be required to improve IQ.

2. Take It from the Top
Keeping the need for standardization and simplification in mind, the executive team should build the strategic foundation for IQ improvement by promoting information quality as a strategic imperative and aligning IT with business strategy. One way to accomplish this is by determining — from the top down and not the bottom up — what information is most important. The executive team can begin by asking:

• What information do the CFO, CIO, VP of Sales, CMO, CEO and the board need to aggregate and understand to manage the company on a daily, weekly, monthly and yearly basis?
• What are the implications of not having accurate, timely, reliable, and transparent information in these identified areas?
• Which of these information areas needs to align most closely with the company’s top strategic goals?
• Where are the areas of unnecessary complexity? These can come in multiple forms and can affect any area of the company. In identifying them, some things to look for include:
• Multiple data sources and inconsistent data definitions
• Misalignments between data requirements and data availability
• Redundant processes across business units
• Manual and error-prone processes
• Inefficient organizational alignment or human resource programs
• Non-standardized and non-integrated technologies
• What should be simplified, standardized and made repeatable along the five pillars of IQ improvement — data standards, processes, organization, governance and technology — to help alleviate the pain points and to improve the quality and flow of information?

3. Getting Things in Order 
The next step is to prioritize which improvement issues to tackle first and how to go about doing it. IQ improvement efforts, which can span multiple business units, functions and geographies, can be difficult to explain and justify in and of themselves. Many companies have generated buy-in and improved value creation by linking IQ improvement efforts with other initiatives. Regulatory compliance efforts, such as Sarbanes-Oxley readiness and Basel II preparations, offer the most obvious link. Compliance-related activities can (and should) be used to identify and catalog IQ improvement opportunities. To this end, it is helpful to include an explicit work-thread in the company’s compliance program to identify and document improvement opportunities. IQ efforts can also be linked to other initiatives like CRM implementations, supply chain efficiency efforts, and risk management programs.

Once the improvement opportunities have been identified, it is important to prioritize them through a structured process. Companies may wish to develop a framework on their own or use one that has been developed and tested by others. In either case, the objective is to sequence improvement opportunities and to develop solid business cases to help secure support from the board and senior executives.

4. All Aboard 
Improving IQ usually requires making changes in data standards, processes, organization, governance and technology. Because of this, it requires all hands on deck. A variety of competencies spanning functions, disciplines and geographies are typically required to effectively carry out IQ projects of any size. It’s tempting to see the CIO as some sort of information god, and undoubtedly the CIO should be seen as a key business leader and counselor in any IQ initiative — but not as the sole person responsible for it.

IT and the ultimate owners of IQ — the functional areas — should collaborate closely to help define master data, pinpoint business-critical information, identify information stewards and subscribers, and develop ways to meet the company’s decision-making and reporting requirements. Collaboration between finance and IT throughout this process is also very important because finance has become the aggregator and interpreter of most operational information and has critical knowledge about business and analytical requirements. Ultimately, the journey toward improved IQ is a joint venture; it requires collaboration and communication among the business leaders, the CIO and the CFO.

5. Rules of Engagement 
The old computer adage, “garbage in; garbage out,” suggests how important information governance can be. An effective information governance framework is essential for providing data accuracy and preserving its integrity. This framework should encompass information-management policies, procedures and principles, as well as assign ownership and accountability for information monitoring and managerial tasks. In developing this framework, consider forming cross-functional councils to oversee information quality in specific areas, such as customer information or product information. These councils should be structured and authorized to act across functional and business unit silos and to help promote stakeholder cooperation and cross-functional collaboration in addressing IQ issues.

Information governance demands a balanced approach both at the policy and stewardship levels. Organizations that have a defined policy with no standards or processes to support the implementation of it will fail and vice versa. Plus, good governance and accountability within the business units are what make IQ improvements stick. Information improvements usually don’t fall apart because of the systems per se, but rather because leaders fail to insist upon adherence to the rules and policies and, instead, allow variability and lack of discipline to creep back in.

6. Say What?  
IQ improvement is essentially about moving beyond the status quo and overcoming preconceived notions of what IQ is about and who is responsible for it. That is why change management, which is an important component of any type of initiative, is particularly vital to IQ improvement. It’s about getting the message across that IQ is a priority, as are the obligations surrounding it. Indeed, ineffective communication of information policies and procedures is a major pain point in advancing new governance strategies, cited by 49 percent of those surveyed in a recent Aberdeen Group study on information governance.³ The communication plan should also continually demonstrate that the IQ program has been adopted and endorsed by executive leadership. Especially valuable are progressive “quick wins” (changes that can deliver value rapidly) and public recognition of these results. These create buy-in and sustain momentum for the initiative.

Changing the Game 
Moving ahead, companies that effectively implement IQ improvements will set clear IQ goals that go well beyond just getting by. The challenge will be to maintain consistent focus on information accuracy, integrity, transparency and timeliness over the many years that it will take to achieve high IQ. One way to maintain this focus is to develop an information strategy by asking, as a first step: “What information do we need to support improved business performance and good governance, risk management and regulatory compliance?” This stands in contrast to what most companies do, which is to skip the information strategy step and to charge ahead in establishing a data architecture by simply asking: “What data do we need to feed the system?” As a result, they end up with a new system that runs transactions just fine but doesn’t produce management information any better than before.

IQ improvement is really about changing the game — a shift from viewing information quality as a regulatory burden to viewing it as a way to help create value. Although governance, compliance and risk management have been powerful forces in demonstrating that IQ matters, meeting regulatory requirements should be the starting point — not the final destination — on the IQ journey. DR 

Lee Dittmar is a principal with Deloitte Consulting LLP and serves as the national leader of the Enterprise Governance service line and the global leader of the Governance, Risk and Compliance service line.

Jane Griffin is a principal with Deloitte Consulting LLP and serves as the national leader of the Information Management service line.

Endnotes

1. IQ Matters: Senior Finance and IT Executives Seek to Boost Information Quality, a survey report prepared by CFO Research Services in collaboration with Deloitte Consulting LLP, November 2005.

2. Look Closer, Look Further: How to Build a Better Business Case for Improving Information Capabilities, a survey report prepared by CFO Research Services in collaboration with Deloitte Touche Tohmatsu, October 2007.

3. The Information Governance Benchmark Report: A Needed Strategy for the Enterprise Backed by Viable Solutions, a survey report prepared by the Aberdeen Group, July 2006.

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