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Data Management in SMEs

Dr. Ipshita Basu Guha
Dec 2010

In the beginning

A common doctrine of life is that everything that takes birth goes through its cycle of activities and then dies allowing others to take its place. In Hindu mythology, “God” is in the form of Brahma, Vishnu and Shiva. All three of them have specific function as a creator, preserver and destroyer. The importance of each is equal for maintaining a balance in nature. The Christians also have a trinity in the form of Father, Son and the Holy Spirit though their roles are not similar to the Hindu triad. A remote parallel though can be drawn about the Pagans' belief of life, death and rebirth as symbolized by the Triquetra or the Irish Trinity Knot. The continuity is evident in the symbol.

Source: http://en.wikipedia.org/wiki/File:Triquetra-Vesica.svg. This work has been released into the public domain by

its author, AnonMoos.

A similar analogy can be drawn in our everyday business life where data and information (either in hard copy or soft copy format) have to undergo the cycle of creation, maintenance and destruction. It is not a choice but a “must”; a necessity. From the time an idea for business or any transaction is conceptualized in the mind data starts getting created. One does not keep track of it on a routine basis but suddenly the quantum reaches gigantic proportions and its handling, tracing and relevance becomes an issue that seems impossible to overcome. There are spreadsheets, text documents, presentations, images, web-pages, portable document formats, product specifications etc piling up for information generation and analysis. It is therefore prudent to start planning and managing data (both electronic and physical) right from the beginning. Being organized and establishing systems and processes from the beginning makes data management only an incremental task in future.

Why is this especially relevant for MSMEs?

A simple reason will suffice – availability of resources (man, machine, land, money). Documents or data in a business are fundamentally of two orientation – statutory and management. There is a legal need to comply with government rules and regulations within which a business functions and hence certain data have to be created and maintained for a particular period of time like that for the purpose of Sales Tax or Income Tax. Management decision making data and information like MIS reports on the other hand do not have such defined need for creation or period for preservation. The data used for statutory or management purpose both may and may not have similar origin but purpose and relevance differs. There is no rule for preservation or destruction cast in stone. It varies from business to business and the aims of the specific functions where the data is created.

There are multiple issues with carrying too much data and information for a business. The concept of inventory management by using ABC analysis holds true for business data. Data that is obsolete or incorrect loses its importance and can unnecessarily complicate matters at the time of analysis. This article will touch upon “why” and “how” data should be created, preserved and destroyed. Certain tools are also highlighted at each stage which can make this data management activity efficient and simplified.

Creation

Data creation starts from the very point where an idea is contemplated though it need not result into formation of enterprise or business. Data or document can be either created by a person or acquired from some other source like a website, department, journal or magazine, or person. These have to be initially categorized as statutory or management – oriented and then segregated as one-time, yearly, monthly or weekly/ daily and sorted in order of the importance.

The job is not over once a document is created reason being that it is normally created for a purpose which might or might not be important at present but sometime in future. The aim of the creation and preservation stages is mainly for data generation, sorting and cataloguing for traceability at the time of need. Traceability is also coupled with the need to access the most recent version of the document.

Physical copies of important documents should be scanned and stored in electronic format. This should be done immediately as the document is created and the activity should not be procrastinated. This is an important step towards being organized. Physical documents do not have automated search facility. If the filing system has even minor flaws, it could take ages to trace a document. The best way to convert physical copies into electronic ones is through the use of scanners which are relatively inexpensive today. An average scanner can be purchased for less than Rs. 5000. It can be connected to a single computer in an office and accessed by others over the local area network. There are many All-in-one devices which allow the user to scan, copy, print and fax documents. Though these are not meant for heavy duty scanning but it definitely serves the purpose. Investing in a scanner need not be a very long – term decision as newer and cheaper models keep seeping in everyday.

The physical documents can be filed and the files labeled properly for identification. These files should be further catalogued in electronic format along-with the reference to their physical location so that they can be traced efficiently. In today's world, the most important part of data creation is the nomenclature and the naming convention used for storing the files in electronic format.

It is recommended that all data in computers should be stored in a separate data drive and not on the drive where the operating system is loaded. The operating system drive is normally known as the “C” drive. This is important because in case a computer crashes or is hit by a virus then the data from the other drives can be recovered relatively easily.

Once the location for storage has been identified then business data should be stored in files with names clearly indicating what they are supposed to contain. The main folder can have the year as the sign of identification followed by sub-folders pertaining to each month. An important note here is that these months should also have the year mentioned as there is a possibility that folders with same month names might get overwritten if they are not distinguished by some other factor. Files should be saved and stored with names starting with the date as identification. This helps in identifying the versions of each file. An interesting feature of including dates is that it should be mentioned in 'yyyymmdd' format since it will be useful while sorting. The following screenshot shows the difference in how files are sorted if the file name starts with date or ends with date.

Maintaining a well-defined file naming system helps in the long run as companies grow from small to medium and then large. It is for the reader to assess the difference between having a well-meaning file name or saving files as book1.xls, book2.xls etc.

Like all creation, nothing is in its perfect form right from inception, improvements happen constantly. But proper identification is the first step towards a well organized document system in an organization.

Preservation

Data preservation is of paramount importance for businesses of all sizes. There is a statutory compliance need to store certain data for a specific period of time. It has to be stored in the physical form but the same should also be stored in electronic format too. Management information data is generated by various functions and have to be compiled for business-decision making. It is important to preserve the information for future reference.

The statutory data storage compliance requires lot of physical storage space in any organization. (Present requirement is Income tax data and Sales tax data to be stored for 10 years and Excise data for 5 years). It is further compounded with need for protection from termites and rodents which are common issues in India. Over a period of time, location of old files and documents become muddled. Space is a constraint for many companies as most of the financial resources are directed towards plant and machinery as well as working capital. The increase in real estate prices make it difficult for companies to keep on adding space. Hence, maximum utilization of available space is a constant challenge.

Electronic data preservation is also about space and safety. Organizations can and many do have multiple levels of data preservation – individual workstation level, functional level (marketing and sales, finance and accounts etc.) and at an organization level. In case of multiple locations of operation for the same business, data is stored centrally – location –wise. In case the same is not being done then it should be implemented.

Today the prices of storage hard disks are in the range of Rs. 2000 – 2500 for a 500 GB internal disk. It can store huge amount of text based data. Most new computers have 320 to 500 GB hard disks as the default ones. This is useful as workstations can have two separate drives for regular work data and another for backing up the files and folders. The flip side is that people store lot of unnecessary files (music or video files unrelated to work) and they keep getting added into the backup.

A local area network is very common these days. If there are 3 computers in an office, a small hub can be used to make a network so that the computers can 'talk' amongst themselves. Small businesses can invest in a simple computer which will have a large RAM and multiple storage disks. This can be used as a storage server where each employee can store their important data for preservation. This will ensure two levels of protection atleast – PC – level and server – level. This type of basic architecture should be in place from the beginning as it helps in streamlining activities and creates redundancy for preservation. The cost – benefit analysis will be stark when important data is lost and have to be either recreated or considered as lost forever.

Data safety and security comprises of both protection from leakage and damage due to virus attacks. A simple tool provided in Microsoft Office or OpenOffice is the system of putting a read only or full access password. This ensures that data is not visible to people who are not concerned with it or do not hold the necessary rights (the password). Details of finances and accounts, costing, sales and client information generally require this kind of protection. Earlier employees used to work for years in one company and the level of work ethics were different. The story is not so any more. One has to adapt according to the prevailing environment.

Another investment which is frequently overlooked by enterprises is the use of licensed antivirus software. Windows machines are prone to virus attacks from either Internet or through the use of removable pen or portable drives. Having a licensed antivirus software ensures that it is frequently updated by the developers and is able to track most viruses, Trojans, worms etc. The packs of 3-5 users prove to be cheaper than the single user ones and similarly if the pack is bought for three year validity instead of one. Quickheal, Kaspersky, Bitdefender are few well-known names which are considered to be effective. These applications help in online protection, scanning of emails and protect by disabling 'autorun' functions of external drives apart from routine scanning of the drives and boot sector.

The oft overlooked part in case of electronic data is multiple copies of the same file which creates confusion regarding the most recent version. A little known application called Total Commander is a wonderful tool to compare the size of the files and dates etc (if the above mentioned points at the time of creation are not followed). It is a much more advanced but extremely user-friendly version of Windows Explorer. Though it does not entirely clear the obstacles of data version problem but it can be used for basic comparison.

A routine backup schedule for company data is definitely requisite coupled with antivirus protection. The gains handsomely exceed the costs. IT might not be the core function of a business but in today's world, its significance and consequences cannot be negated.

Destruction

The previous section has tried to eloquently explain how and why data should be preserved. The question now arises that why should one destroy the data that has been so painstakingly protected and preserved – to keep the balance. Data that becomes obsolete or completes its purpose should be destroyed. Company data in wrong hands can be extremely agonizing. Though cost of hard disks and storage media have fallen but more data means more time and space for backup. The handling costs will increase over a period of time.

A focused routine house-keeping practice will keep the data current and lean. A lot of unnecessary clutter gets accumulated over a period of time. One feels that certain data might be useful later on but 90% of such data simply remains untouched for years. Systematic data destruction should be done in conjunction with the preservation process. Multiple copies of the same file should be deleted to avoid unwanted confusion. Many short – term activity files are made in the computers to fulfill just – in – time analysis requirements. These files should be destroyed since accessing the same for other purpose can lead to wrong decisions.

A brief glance at one's own computer's data will explain why data should be destroyed from time to time. How many of the files that have been stored have been accessed in the last one year? How many instances of opening 3-5 files have occurred before the correct one was found?

Essence

Businesses are required by law to store certain transactional data for a stipulated period of time in physical format. Storing and cataloguing them is essential so that they can be traced immediately at the time of scrutiny. Computers and ease of storage has slowly caused us to clutter and store data like we do with old magazines. One lives in the comfort of knowing that everything is stored in the PC oblivious to the fact that can it be retrieved properly at the time of need. The need for data is well-established. With the advent of electronic data; information should be logically available faster. But sometimes it does not happen so because data is not stored properly or lost due to virus attacks. The need for proper creation, preservation and systematic destruction is expected.

Establishing a well – define data creation method will help people function coherently and newcomers can be trained in the same fashion. Copies of financial, sales, design data should be preserved at a central location so that data duplicity does not occur at each workstation. Multiple copies, old, obsolete or confidential data which has served its purpose should be deleted and destroyed properly to protect the company from unwanted hindrances and hitches.

Organizations can reap many tangible and intangible gains by implementing the process of creation, preservation and periodically destruction of documents.

Dr. Ipshita can be reached at ipbasu@rediffmail.com

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