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What is the Source of Truth, and Why is it Important?

Joanna He
Senior Director, Product Growth
Jun. 28, 2023

In today's data-driven world, the concept of a "Source of Truth" (SoT) plays a pivotal role in ensuring data consistency, accuracy, and reliability. But what exactly is SoT, and why is it so important? 


This comprehensive guide delves into the concept of SoT, its significance in various industries, and how it can be effectively implemented.


Whether you're a business leader, a data professional, or someone interested in data management, this article will provide you with a deeper understanding of SoT and its impact on decision-making and business performance.


The Meaning of Source of Truth


The Source of Truth (SoT) refers to the authoritative, reliable, and trusted data source that provides the most accurate and valid data. It is the primary source from which all other systems and data repositories derive their data. The SoT is a critical concept in data management, as it ensures that everyone in an organization refers to the same data when making decisions, thus eliminating discrepancies and confusion.


The Importance of a Reliable Source of Truth


In today's data-driven world, having a reliable SoT is crucial. It ensures data consistency, accuracy, and reliability, which are essential for informed decision-making. It eliminates data discrepancies that can lead to misunderstandings or incorrect conclusions. According to a study by IBM, businesses lose $3.1 trillion annually due to poor data quality in the US alone.


Benefits of Source of Truth


  1. Obtain the Right Information at the Right Time: Implementing SoT principles ensures that your company has the information to make effective business decisions. It also gives them the confidence to take action on an account or with a client knowing they have all the correct information when needed.

Spend Less Time Identifying Correct Data: Poor data quality costs companies millions a year. SoT reduces the amount of bad data because data accuracy is a key principle of this methodology.


Increase Your Team's Productivity: Your teams are more productive when information is readily available, easy to access, and straightforward to analyze. A central database allows you to obtain the most up-to-date information whenever you need it without wasting time searching.


Ensure Data Security: Data repositories not only ensure the accuracy and availability of data. It also guarantees data security. Having a central database with state-of-the-art security technology ensures that you, your firm, and your clients don't fall victim to a cyber attack due to your company's approach to data storage(1).


Explanation of the difference between a Source of Truth and a Single Source of Truth


While the Source of Truth refers to the authoritative data source for a given piece of information, the Single Source of Truth (SSOT) takes it a step further. SSOT is a data management strategy that provides a centralized, comprehensive, shared data environment shared by applications and the organization’s user base. It is a concept with only one, primary reference source for data. Data is only stored once, eliminating the potential for inconsistency and duplication.


A Single Source of Truth Examples by Industries


A SSOT benefits any industry that relies on data to make decisions. However, some industries can benefit more than others due to the nature of their operations. Here are a few examples:



Financial professionals manage some of the most sensitive data in the world—the information involving someone's personal and financial identity. That's why these companies especially need to consider adopting the SSOT methodology. A SSOT can help financial institutions maintain accurate records, ensure regulatory compliance, and make informed decisions based on reliable data.



Another example is the use of a comprehensive procure-to-pay software solution. By capturing all spending data, automating essential processes, and introducing advanced vendor management capabilities, along with powerful analytics, these applications make it possible to transform spending data into actionable insights, more accurate and audit-friendly financial statements, and strategically sound budgets in real-time.



In the healthcare industry, a single source of truth can help regulatory teams pinpoint and address gaps in data collection during each trial phase. By mitigating potential risks earlier in the process, teams generate more robust evidence and more substantial submissions, which often means a shorter approval process.


Building Your Single Source of Truth with Kyligence Zen


The most effective way to establish your company's SSOT is by utilizing Kyligence Zen, a low-code metrics platform designed for simplicity and efficiency. Kyligence Zen is a comprehensive solution for defining, collecting, and analyzing your business metrics. It allows you to connect data sources, define metrics, discover insights, and share them across your organization, thereby creating a metrics-driven single source of truth that everyone in your company can leverage and analyze.


Here's a simplified guide on how you can create a single source of truth with Kyligence Zen:




Kyligence Zen Architecture Diagram

Step 1: Connect Your Data Source

Connecting your data source to Kyligence Zen is straightforward. You can either download your data into a CSV file or load it into AWS S3, depending on your preference and requirements.



Kyligence Zen: Connect Your Data Source

Step 2: Define Your Business Metrics

Once you connect your data source to Kyligence Zen, you can create metrics using a drag-and-drop interface. Alternatively, you can leverage the metrics template made by industry experts.

Kyligence Zen empowers you to transform your raw data into valuable, actionable metrics. By creating a unified metrics catalog, you ensure that everyone in your organization is aligned and working with the same definitions. This alignment, facilitated by Kyligence Zen, allows for more accurate insights and more informed decision-making, all in less time. Importantly, Kyligence Zen serves as your SSOT, ensuring that all metrics are consistent, accurate, and accessible across your organization.



Kyligence Zen: Metrics Catalog

Step 3: Reuse Your Metrics Across Platforms

Kyligence Zen offers flexibility in how you analyze your data. You can create customizable dashboards tailored to your specific metrics, or you can connect your metrics to Excel for a familiar, intuitive, drag-and-drop Pivot-table experience.

Moreover, with its Open APIs, Kyligence Zen ensures easy integration of your organization’s data and metrics with the BI and SaaS tools that best fit your business needs. This allows for alignment across all your business units, data consumers, and decision-makers on one unified metrics platform.



Kyligence Zen: Open APIs

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In conclusion, the concept of a "Source of Truth" (SoT) is a cornerstone in the realm of data management. It ensures data consistency, accuracy, and reliability, thereby empowering businesses to make informed decisions. While implementing an SoT can present challenges, the benefits it offers in terms of data integrity, security, and productivity are substantial. Tools like Kyligence Zen simplify the process of establishing an SoT, making it an achievable goal for businesses across various industries. As we continue to navigate an increasingly data-driven world, the importance of a reliable SoT cannot be overstated.


FAQs about Source of Truth

Here are some common FAQs and their answers:



System of Record vs. Source of Truth

A Source of Truth is a central place where all company data can be found. It is a single reference point that provides a universally valid version of all company data. It is designed to increase data quality and credibility by excluding any data that is incorrect, redundant, or duplicated. The SoT is maintained by consistently updating the data and using software solutions and connectors to integrate and sync data from numerous sources.
On the other hand, a System of Record is an authoritative data source for a given data element or piece of information. It is the official source of a particular type of data and is used to resolve any discrepancies when multiple systems disagree about the same piece of information. The SoR is particularly important in environments where there is a single authority over all data consumers and all consumers have similar needs.
In summary, while both SoT and SoR are authoritative sources of data, the SoT is more about providing a single, consistent view of all company data, while the SoR is more about being the definitive source for a specific type of data.

Differentiate the source of truth and the single source of truth.

While the Source of Truth refers to the authoritative data source for a given piece of information, the Single Source of Truth (SSOT) takes it a step further. SSOT is a data management strategy that provides a centralized, comprehensive, shared data environment shared by applications and the organization’s user base. It is a concept with only one, primary reference source for data. Data is only stored once, eliminating the potential for inconsistency and duplication.


How does a single source of truth improve data integrity?

A Single Source of Truth (SoT) enhances data integrity by providing a comprehensive view of business performance, breaking down data silos, eliminating duplicate data, increasing transparency, and boosting productivity. It centralizes data, ensuring consistency and accuracy, and improving decision-making processes across the organization. By supporting new strategies with reliable, real-time data, it fosters innovation and agile thinking. Essentially, SoT ensures all data is consistent, accurate, and unique, enhancing the quality of data and decision-making processes across the organization.

What are some common challenges in implementing a single source of truth?

Implementing a Single Source of Truth (SoT) comes with several challenges:
1. Leadership and Employee Buy-In: The first step in any major project is to ensure you have approval from the appropriate stakeholders. In the case of a mass shift in data management — like SoT — buy-in needs to come from the business's leadership, given the amount of time, effort, and money needed to catalog and consolidate all data sources. Clear communication is also essential to prevent confusion or alienation among employees as their workflows change.
2. High-Quality Data: Collecting all data within an enterprise is one thing, but ensuring that your organization's data follow agreed-upon standards will reduce confusion and speed analysis. Employees will feel more confident in their conclusions, knowing that the data they are seeing has been cleansed and validated to meet company standards.
3. Evaluation Standards: Establishing a set of standards for evaluating and analyzing data is crucial to prevent wildly different conclusions from the same dataset. Predetermined reporting standards for revenue and other company-wide metrics will ensure that progress toward goals is tracked consistently and transparently.
4. Data Privacy: Collecting data into one location will remove blind spots in decision-making. However, you don't want everyone to have access to your organization's data. Implementing access rules based on roles and permissions is necessary to limit sensitive information to those whose roles require it.
5. Accessibility: Ensuring that anyone can access the centralized data, not just data scientists and engineers, is key to democratizing data. Offering self-service tools to build dashboards and visualizations will allow employees to feel a sense of ownership and stay engaged with progress toward goals within their teams or across the organization.


How can a single source of truth benefit data analysts?

A Single Source of Truth (SoT) provides several benefits to data analysts:
1. Obtain the Right Information at the Right Time: With SoT, data analysts no longer have to hunt for data across multiple databases, which can be time-consuming and error-prone. They can access the data they need when needed, which is crucial for making effective business decisions.
2. Spend Less Time Identifying Correct Data: Poor data quality can lead to inaccurate analyses and misguided business decisions. With SoT, data accuracy is a key principle, reducing the amount of time analysts spend verifying data.
3. Increase Your Team's Productivity: Having a central database allows data analysts to obtain the most up-to-date information whenever they need it without wasting time searching. This increases productivity as analysts can spend more time analyzing data and drawing insights.
4. Ensure Data Security: Centralizing data in one location with state-of-the-art security technology ensures that sensitive data is protected from cyber-attacks. This is particularly important for data analysts who often work with sensitive data.
In summary, a Single Source of Truth enables data analysts to access accurate and up-to-date data quickly and securely, enhancing their productivity and the quality of their analyses.



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