Finding a Balance Between System of Record and Source of Truth

System of Record

Key takeaways

  • System of record and source of truth are commonly used business data jargon. 
  • A system of record captures and stores all the information relating to running a business. 
  • A source of truth on the other hand is a single, authoritative data source that represents the official record of a company or organization. 
  • Sometimes the system of record could be the source of truth, since both are used to store data.
  • Both these systems can be used for data analysis or reporting purposes. 
  • While designing a system of record, you must be clear on the assumptions and define the scope clearly. 
  • A single source of truth can become the central repository for all the information in the company.

What is the System of Record Vs Source of Truth Difference? 

Understanding the difference between the system of record and source of truth is important to leverage both these systems in the right manner. Understanding what each of these terms mean helps you apply them to the right type of project and identify the gaps in business processes. Source of truth is considered to be the more authoritative data source. This blog explores building and implementing a system of record vs source of truth in detail. 

Table of Contents

You’ve probably heard the terms system of record” and “source of truth.” But what do they mean? And why should you care? In this post, we will be exploring those questions and more.


System of Record

A system of record captures and stores all the data that is required to run the business. This can include everything from customer, sales, and product information to inventory levels and employee records.

A system of record should be considered an authoritative source of truth for your organization. It stores all the necessary information about its own operations, so it makes sense to say that it’s where all this data lives or will live in the future.

Source of Truth

A source of truth is a single, authoritative data source that represents the official record of a company or organization. It’s what you can count on when it comes to accuracy and consistency, so you can trust that any information your business uses comes from this source.

A system of record is similar to a source of truth but differs in one important way: Systems of record usually don’t have an actual person who writes or edits their stories. They are created by software and made available online as well as offline in paper form.

System of Record and Source of Truth Being Different

The difference between building a system of record and a source of truth is that the latter is the authoritative source of data. What this means is that it’s not important to get all your data into one place as long as it’s available somewhere else. 

In fact, sometimes, even having just one “source” isn’t enough. Some people will argue that there should be multiple sources because different people might have different opinions about what constitutes good data quality. However, this argument doesn’t hold much water considering how few people actually care about these kinds of issues compared to those who do care about them deeply enough.

System of Record and Source of Truth Being the Same

Your system of record is the source of truth, but sometimes they can be the same, yet so different. The system of the record comprises the most accurate data and up-to-date information, which you can always trust. Owing to its level of reliability and accuracy, the system of records is the most difficult to maintain. It’s complex and houses huge volumes of data.  

Both systems of record and source of truth are used to store data. They also have the same purpose: to generate reports, make decisions, manage data, and store information in a single place. Here are some other similarities:

  • Both systems can be applied to any kind of business process or project.
  • Both can be used for data analysis or reporting purposes.
  • Both help you identify gaps in your processes by allowing you to see where there are inconsistencies among your processes (systems) or where there may be an opportunity for improvement (source).

Building a System of Record vs. Source of Truth

When it comes to building a system of record, you need to consider the business process that will be affected by your data. If your organization has hundreds of employees and dozens of processes, then it’s likely that you want to build an entire enterprise-level system. But if you’re only interested in one or two specific processes, then building a source of truth may be more appropriate.

The key difference between these two approaches is how they’re used: while a source can be used by any employee with access rights (and no special skills), a system must be used by someone with specific expertise who knows what they’re doing. This means that some level of training should take place before someone has full rights over the information stored within it.

Building and Implementing a System of Record.

A system of record is a good way to store data and make it available to your team. But if you only use a system of record as a source of truth, you will have problems when it comes time to make decisions based on the data stored in that system.

A source of truth should be used for reflecting reality. This means that when something changes or gets added, there’s no need for an additional step: those changes are reflected immediately with no extra work from anyone else!

This is why you need to build a good system of record. It all starts with the end users’ awareness of the information cycle. 

The end-user cycle of awareness of data is the process that leads users to become aware of their data. It begins with an event, such as a purchase or a medical scan, and ends with the user being able to use that information in some way.

The steps in this cycle include:

  • An event occurs (e.g., someone purchases something).
  • Users are exposed to notifications about these events (e.g., through emails or push notifications).
  • Users reactivate previous activities associated with these events (e.g., sign up for a newsletter).

End-state architecture

You need to create a source of truth and system of record at first as they make up the end-state architecture. The system of record in the end-state architecture is important because it determines what happens with it later on. It can be anything, but for this example, we will use an ERP (enterprise resource planning) system that stores business data and processes. This means that once you have completed your work on your project and moved on to another one, you may not necessarily see your own project again until someone else comes along and needs help with something similar to yours.

Creating a source of truth

One of the most important things to do when building a system of record is to create a source of truth. Since the source of truth is the most authoritative source of information in your organization, it needs to be validated and reconciled with other data sources. 

What we call the “source” is created based on the contributions of users who want their data to be validated by the opinions of others. This information can then be stored under different categories or fields, which makes employees get easily familiarized and understand it easily. 

Creating a system of record

Since a system of record is a central location for storing and sharing information. It can be an internal or external service. But it’s important to have one in place so you can share data with other teams or individuals without having to go through multiple steps.

A system of record is often referred to as your “truth engine.” In other words, it’s where all your company’s truths are stored – the facts, figures, and numbers that drive decisions at scale. This information helps everyone work together more efficiently by acting as a shared source of truth across departments and teams. It also allows them access when needed (for example: if someone needs more information about an employee).

The best way to create one? Start small! You don’t need thousands upon thousands of records; just start collecting some basic metadata like name/title/phone number along with some basic contact info such as email address or physical address (if applicable). You’ll find that once you’ve gotten started collecting this data from different sources like HR or payroll systems, then adding additional fields isn’t too difficult either since most applications contain prebuilt fields for standard record types like “Name” or “Date Added.”

Know your people

Understand your people. Understand their roles, responsibilities, and goals. Know how they work together to achieve those goals.

Have a single source of truth software

The single source of truth software is a key component to building a system of record. It’s used to collect data, manage it, and integrate it into your business processes.

A single source of truth software is also called an enterprise resource planning (ERP) system or enterprise information management (EIM) solution. These tools help businesses collect information from multiple sources into one central database to perform analytics and report on trends over time to make better decisions about their operations.

The main benefit of using an ERP/EIM tool is that it allows you to analyze all your company’s financial records at once rather than having them spread across different systems or applications – which makes it easier for you as an executive or manager because then you only need access one place instead of multiple places like before when trying out something new would require lots more work than just clicking through screens manually before finally getting results back from those queries run against each other which could take hours depending upon how complex your query might be!

Be clear on the assumptions

As a system of record, you will need to understand the assumptions that were made when creating the system. This includes understanding how data is collected, aggregated, processed, and analyzed. You should have an understanding of what is being measured and how the data is being collected. 

Define the scope

You need to define the scope of your data collection process and be consistent with it.

  • What are you trying to collect? Is it all customers or just a subset?
  • How will you know if someone has been added or removed from your system of record?
  • What information do you need to process before adding/removing people from your system?

Data flow

The flow of data in the system of record describes how one type of data flows from one location to another within a system.

Data flow is the movement of data from one system to another, and it’s typically represented as an arrow diagramming where all activities take place. The process begins with the end-user cycle of awareness, which includes three steps:

  • The initial awareness step occurs when a user becomes aware that there is information about them stored somewhere; this could be because they accessed it themselves or because someone else gave them access (e.g., via an application).
  • During this time period, users may become frustrated if they can’t find out what information has been collected about them without knowing how or why it’s being collected—this frustration will often lead them either back into their own systems (where they didn’t realize they were subjecting themselves), or into other systems’ databases (where those databases don’t contain adequate privacy controls).

Other data than the system of record describes any other types of data that are used within an organization that isn’t managed by one particular department or role.

Examples of other data that might be part of a business process:

  • Text (e.g., emails)
  • Auditing data (e.g., logs)
  • Detailed and summary information about activities performed by different individuals or groups

Reducing errors and improving efficiency

  • Be interested in reducing errors and improving efficiency in data collection processes, including those that are manual or are already automated but not optimized for efficiency or accuracy levels beyond what is necessary to meet business requirements at that time.
  • Focus on reducing errors, not just automating them. Be sure you understand how your system works and can explain it to others so they can understand how it works. This is especially important if you are working with non-technical people.
  • Be interested in improving efficiency while maintaining accuracy levels beyond what is necessary to meet business requirements at that time. This means having a good understanding of what makes up an error rate (or other metric) before trying to improve it by improving automation or usability features such as user interfaces etc.

Building and Implementing a Single Source of Truth

When you build a single source of truth, it becomes the central repository for all information about your company. It includes all the data in your organization, managed by one person or group of people who know everything about the system. Having a single source of truth can help you prevent data loss or theft, improve accountability and transparency, and reduce costs by eliminating duplicate work (for example, if two people are creating invoices).

In most organizations, a single source of truth means you have to share one database and have everyone agree on its contents. This is typically done by creating and maintaining a centralized version control system (VCS).

In this approach, each department can work independently on its own projects without fear that something will be lost or changed by another group later in the process. The benefits are obvious: greater efficiency, less confusion over who should do what with which data, and fewer conflicts over who owns what information when things go wrong – all without compromising the integrity of your organization’s core business processes.

Data Sharing

Once you’ve decided on a single source of truth, it’s important that every application is able to access the same data. You’ll need to decide who can make changes and when. The most common approach is for each application developer or developer team member to have their own copy of the database behind their app so they don’t have access to other people’s information or data. This can be done by setting up separate accounts with authentication mechanisms such as tokens or keys for each user who needs access (e.g., an admin account).

Data Warehouse

You might implement a single source of truth by building a data warehouse and sharing it with all your departments or by creating and maintaining a centralized version control system.

A data warehouse is an enterprise-wide database that stores structured information about the entire organization. It’s made up of many smaller databases (or “fact tables”) that store different pieces of information about each customer, product, or service in an easy-to-access way. Data warehouses are key for keeping track of your company’s financials, sales trends, and other key metrics across multiple departments without having to rely on individual teams’ internal systems for this information.

It allows you to make better decisions about allocating resources across the business and access real-time insights into business performance indicators. These include churn rates or customer retention rates through reporting tools such as SQL Server Analysis Services (SSAS) cubes, which give analysts quick access while also providing good performance when quickly querying large amounts of data.

Having a single source of truth is important

Everyone in your organization knows what data is available at any time and how the system works. This means that there are no more “data silos” where different parts of the organization are working on different versions of the truth.

Without a single database, you can’t implement this kind of system because that would make getting everyone on board with what they’re supposed to do much harder. Also, without agreement on who can make changes and when – and with how much authority – it could become very difficult for teams to work together effectively.

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How can your Business Benefit from a System of Record and a Single Source of Truth?

Companies around the world use solutions like Cflow to automate their repetitive processes and tasks to enhance their efficiency. This helps teams concentrate on their workstream while staying connected to greater projects when using Cflow’s functionalities. 

The benefits of a system of record include:

  • Increased efficiency. The system of record provides a single source of truth for all business processes, eliminating the need for multiple systems.
  • Improved accuracy. By using the same set of data for multiple business functions, you can ensure that your processes are accurate and efficient.
  • Improved security. When you use one system for all your data needs, it’s easier to protect them from unauthorized access or manipulation.

On the other hand, with a single source of truth, all employees across your organization have access to the same information about you and your customers, which means they can better serve them. Plus, since everything is in one place, you don’t have to worry about losing track of important records or missing important updates from one department or another.

Build Better with Cflow’s BPA

Cflow’s Business Process Automation is a new way to build applications. It’s a platform that makes it easy to automate the business logic of your apps and data-driven services.

Cflow brings together the best practices from software engineering, agile development, and business process automation to build better systems of record and sources of truth.

Cflow can help you streamline your business processes by automating common tasks that are often completed manually today, such as invoicing, quoting, order fulfillment, and customer service. It also allows you to create repeatable business processes so that each team member knows how to follow them.

With Cflow’s BPA feature, you can create a process map showing how all your workflows interact in real-time. You’ll be able to see the sequence of events for each workflow and see which workflows depend on others. This gives you a clear understanding of what happens when something changes in one part of the workflow or another – which makes it easy for everyone involved to adjust their own operations accordingly.

Wrapping Up!

The goal of both systems is the same: to provide a source of truth that can be used by multiple stakeholders while also providing automated services that allow users to make decisions based on trustworthy information. We’ve seen how the System of Record and Source of Truth work differently regarding their goals, but they do share some similarities.

Hope this blog gave you some useful insights into the system of record and source of truth and how Cflow’s BPA can help you with both. If you have any questions about why we chose these particular points when discussing the different ways to build a system like this for your business needs. Sign up for the free trial to know how. 

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