Is Your Church Going Broke Without Spending Money?
The Real Cost Associated with Poor Data
Two things that thriving non-profit organizations must do:
- Raise donations
- Spend less than they bring in; or minimize expenses
Donations are the life blood of any good ministry.
Without the required money, little impact can be accomplished. And by minimizing the monies spent, it makes sense that more ministry can be accomplished.
But this over-simplifies an organization’s operational goals.
Unlike corporate investors looking at overall revenue, donors DO NOT look at the total monies raised to determine the organization’s success and there are many hidden costs that can sink an organization just as fast as direct expenses.
One of those hidden costs is the cost of poor data quality.
Poor data quality is manifested in three primary ways:
- Information that is not available within the system that should be
- Information that is in the system that is incorrect
- Information that is in the system that is out-of-date
The first is usually information that is known by someone, but it was never entered into the system or the system does not have a place to store it.
The second issue is usually a data entry error or process error.
The third issue comes from not having the proper processes in place to validate and update the customer information that is tracked.
Revisiting the Value of Data
In the last blog, we talked about the value of data.
All of the top organizations today, collect lots of data and they know how to use it. In fact, businesses are drowning in the tons of data they collect over the Internet. Creating opportunities to collect data is just the start of becoming more data informed. Data scientists help them sift through it to determine what is relevant and meaningful. If you want to learn more about the value of data, check out the previous blog post “When Will Churches Begin to Understand the Value of Data?"
Data Quality is a Common Problem Outside of the Faith Industry as Well
According to the Gartner (a highly respected Information Technology Research and Consulting firm) report Measuring the Business Value of Data Quality, in general, organizations make assumptions about the state of their data and continue to experience inefficiencies, excessive costs, customer satisfaction issues, and agility problems as a result. In effect, data quality in their business goes unmanaged.
Poor data quality is not just a customer service issue (read ‘congregant service’), it can also damage an organization’s (read ‘church’s’) reputation.
Gartner’s research also points out that up to 40% of the anticipated value of all business initiatives is never achieved.
Poor data quality in both the planning and execution stages of these initiatives is a primary cause.
- In business, and we believe that these problems are also evident in churches and non-profits, data quality affects overall labor productivity by around 20%.
- That’s like hiring a free person for every four employees an organization currently has.
But here’s the real problem for churches, as more content is digitized and available on the web and more processes become automated, data quality becomes the limiting factor for overall ministry success.
If churches are going to provide more personalized discipleship in the future (and that’s what people are going to expect), the quality of their data must improve.
Did you get that? Moving more of the church online requires more and better data.
The Role of Data in the Church of the Future
The three components that make up the ‘operational trinity’ within any organization are:
3. Technology (data)
Unfortunately, churches do not universally capture much information about their congregants and prospects, even though it could be extremely valuable in providing a more personalized ministry experience that leads to better individual, family and community outcomes.
These outcomes, or using the above terminology of “impacts,” are what do matter to financial contributors.
If churches are going to be successful in the COVID, as well as post-COVID, worlds, they will be required to go more digital - which requires the ability to collect and use more and better data.
One of the truisms about change, although transformation is difficult as an organization moves forward (progress), it is impossible to go back (regress).
That does not mean we will not physically attend church in the future. But it does mean we will live, as Jeff Reed of Stadia likes to say, in a “phygital world” – a combination of physical and digital. If you believe this scenario, can you see how important it will be to have systems that track activity from both worlds?
As referred to in our previous blog post, it appears that churches undervalue data as evidenced by the lack of quality of information, as well as just the lack of data, we have seen in their systems over the years.
But in the defense of pastors, information and data management is not a course offered in seminary. How many of us know what we are not taught?
Now is the time for pastors and church staff to learn so that churches are better equipped to leverage data within the hybrid model of physical and digital church.
The Real Cost Associated with Poor Data
Poor data quality costs a church in primarily three different areas: decision-making, productivity, and ministry.
Let’s examine each of these different areas individually.
Many churches do not have the appropriate real-time information to readily make decisions quickly when external factors change abruptly. Many churches were caught off-guard when the COVID crisis hit.
Incomplete datasets hamper a leadership team's ability to respond to individual and community challenges.
What data is important for churches to pay attention to?
- Who is who within the database?
- Is everyone’s email address correct?
- Do we have people’s cell phone number?
- Do we know who within our congregation are first responders?
- Who within our congregation might have underlying health conditions that may need prayer and care, and such?
Delays in decision-making can hurt a church’s reputation and brand perpetuating a sense that the church is out-of-touch with what’s going on in the real world. It is impossible to calculate the real cost of this, but it can be significant over time.
Based on various studies conducted for commercial businesses, we know there are process inefficiencies due to poor data. Churches are not exempt from these process inefficiencies.
According to the Gartner study, process inefficiencies can be up to 20% of a staff’s time due to poor data quality.
An organization can estimate these costs based on polling the staff to understand how much time is used to massage the data using spreadsheets to get the weekly reports submitted to leadership to make them presentable and sensible.
In many churches this time is hidden from the leadership because the process management within the churches are informally defined and managed.
Historically, churches do not need much congregant data to conduct Sunday morning service because it is primarily managed as a local event. Most of the information needed is internal to the staff and volunteers who need to work the event.
To succeed in the digital space, a lackadaisical approach to data collection and cleansing will not be effective.
To fully take advantage of artificial intelligence and machine learning in discipleship, the automation of recommended content based on an individual’s needs is a goal. However, automation cannot happen without good data.
In the physical world, there is such thing as a “personal touch.”
In the digital world, the right information about someone’s current life situation, family dynamics, and religious background can provide a “personalized touch” that can truly meet the needs of the person as they maneuver their life challenges.
Through the Internet, the reach can be so broad, and the diversity of the crowd can be so different, the normal “one-size-fits-all” approach to ministry will not be as effective.
It strikes us as an oxymoron to say, but all people should not be “treated” the same. Personalized ministry meets people where they are, and we are all on different points along our own journeys.
As all aspects of the world becomes more digital, churches must improve their data management practices so that process automation and personalized discipleship can be achieved.
The old adage of garbage in, garbage out is apropos.
If churches do not become more intentional about the amount and quality of data collected, churches will become disrupted and more people will look for other outlets beyond the local church to develop their faith.
Are you ready to learn how Communitas can help your church leverage better data to affect positive life change for your congregants?