A Growing Dependency with Hidden Dangers
In today’s dynamic business environment, small to medium enterprises (SMEs) are increasingly dependent on third-party hosted applications to streamline their operations. These applications, ranging from customer relationship management (CRM) systems to order management tools. While these tools have become essential for daily functions, they also introduce a significant, often overlooked risk: the potential for critical data to be left behind.
Many SMEs fail to recognise that without effective data management strategies, they miss the opportunity to unlock the full value of the data they collect. This oversight can lead to inefficiencies, operational disruptions, and missed opportunities for growth, ultimately leaving businesses unable to capitalise on the competitive advantages that their data should provide.
Software vendors and products tend to have their own lifecycle. For example, BatchBook was a CRM for small businesses, known for its simplicity and integration capabilities. It gained popularity amongst small and medium sized enterprises. However, in 2022, BatchBook announced its closure, leaving its customers with limited time to export their data or find new CRM solutions. The abrupt closure caused frustration and panic amongst customers, especially those who didn’t have a proper backup of their CRM data. Some struggled to export all the necessary information in time to migrate to a new system.
The Risks of Inadequate Data Management
The reliance on third-party systems brings with it several risks that SMEs must carefully navigate. One of the most critical concerns is the potential loss of control over essential business data. When data is stored within these systems without regular backups or structured extraction processes, businesses risk losing access to their own information. For example, if a vendor discontinues a service, experiences a security breach, or simply goes out of business, the SME could find itself without critical data, or worse, face the permanent loss of this asset.
Moreover, the challenges of data migration further complicate the situation. Transitioning data from one system to another, such as moving from Salesforce to Microsoft Dynamics, requires meticulous planning and execution. Without proper data management, valuable information can be lost or corrupted during the process, posing significant operational risks and impeding business continuity.
The limitations of built-in reporting tools in third-party applications also pose significant challenges. These tools are often restricted to the data within a specific system, making it difficult for businesses to generate comprehensive reports that uses data from multiple platforms. This fragmentation leads to incomplete insights, hindering effective decision-making and forcing SMEs to rely on time-consuming and error-prone manual data consolidation processes.
Compliance and legal risks are another critical area of concern. Regulatory frameworks demand stringent data management and protection standards. Failure to comply with these regulations can result in severe financial penalties and damage to a business’s reputation. Furthermore, service contracts with third-party vendors often include clauses that limit the retention period of detailed records, leaving SMEs at risk of losing access to important historical data after a few years.
Mitigating the Risks
To address these challenges, SMEs must adopt robust data management strategies that enable them to unlock the full value of their data while safeguarding it against potential risks. Implementing regular data backup protocols is a foundational step. By extracting data from third-party systems and storing it in a secure, centralised location, businesses can ensure that they maintain control over their data, even in the face of vendor disruptions.
Breaking down data silos is another essential strategy. SMEs should leverage data integration tools that consolidate information from various systems, enabling them to create unified reports and gain comprehensive insights into their operations. Solutions like Microsoft Power BI, Tableau, or custom-built data warehouses can play a crucial role in this process, helping businesses achieve a holistic view of their operations and make informed decisions.
When negotiating contracts with third-party software vendors, it is imperative for SMEs to include provisions for data access and extraction. This includes specifying the frequency and format of data exports and ensuring that there are no prohibitive costs associated with data retrieval. These contract provisions safeguard businesses from being overly dependent on their software vendors and help maintain control over their data.
Automation tools can further enhance data management practices by facilitating regular data extraction from third-party systems. By setting up scripts and ETL (Extract, Transform, Load) tools, SMEs can automate the data extraction process, reducing reliance on manual processes and minimising the risk of human error. This ensures that data is consistently and accurately extracted, providing businesses with reliable access to their information.
In an era where the cost of data and cloud storage has become increasingly affordable, SMEs can now store their data and perform regular cloud computing tasks for less than $1,000 a month. This accessibility allows businesses to adopt more sophisticated data management practices without incurring prohibitive costs.
As technologies like generative AI and advanced analytics continue to evolve, SMEs must future-proof their data management strategies to ensure that their data remains within their control. By building a robust data infrastructure that emphasises data accessibility, quality, and security, businesses can leverage new innovations to enhance their operations and stay competitive in a rapidly changing landscape.
The Role of Continuous Monitoring and Evaluation
SMEs must also prioritise continuous monitoring and evaluation of their data management practices. Regular assessments of data strategies and the performance of third-party systems are crucial to ensuring alignment with business goals and technological advancements. By staying vigilant and proactive, businesses can adapt to changing circumstances, mitigate risks effectively, and unlock the full value of their data.
Case Study: Transitioning from Salesforce to Microsoft Dynamics
Consider the case of a life insurance company that relied on Salesforce for its CRM needs. When the technology partner that built their custom solution went out of business, the company faced significant challenges in transitioning to Microsoft Dynamics. The process involved complex data extraction, integration, and documentation to preserve the integrity and usability of the data post-migration.
To overcome these challenges, the company partnered with INGRITY, which conducted a thorough analysis of the backend database, executed full data extractions, and stored the data on Microsoft Azure. INGRITY also developed a curated data set, complete with documentation and structured labels, to facilitate seamless integration into the new system. This approach ensured that the company-maintained control over its data and successfully transitioned to the new platform.
Unlock the Value of Your Data with INGRITY
Effective data management is critical for the success and longevity of SMEs. By addressing data blind spots and implementing robust strategies—such as scheduling regular data backups, planning for data retrieval, and carefully reviewing vendor contracts—businesses can mitigate risks, enhance operational efficiency, and remain competitive in a rapidly evolving technological landscape.
At INGRITY, we understand the challenges that SMEs face when their data is trapped in third-party systems. We have helped numerous businesses regain control of their data and safeguard their futures. Don’t wait until it’s too late. Contact us now to secure and manage your data effectively. Our expert team will help you extract, consolidate, and protect your valuable information, ensuring your business remains resilient and future-proof.
Contact sanan.thamo@ingrity.com to schedule a free consultation and start the process of liberating your data today.
