System of Record vs Source of Truth: What’s the Difference?

Customer Experience

background_image background_image

A data object in itself isn’t as valuable as what it tells us about the whole picture or the insights you can garner from it. If data management and analysis haven’t been a focus in your business strategy, 2023 is the year to start. Well-organized data and their corresponding results, and insights are critical to your business growth.

You may have come across the terms System of Record (SOR) and Source of Truth (SOT) in business but don’t know their relationship. They’re both parts of a critical system to take your raw data and present it in a way that provides deep, accurate, and actionable insights.

In this article, we’ll look at your System of Record and Source of Truth and the differences between both. We’ll also discuss:

The difference between System of Record and Source of Truth

An easy way to understand the difference between a System of Record and a Source of Truth is to think of the relationship like a puzzle. The System of Record are all the puzzle pieces, while the Source of Truth is the big picture you get once all the puzzle pieces fit together.

System of Record (SOR)

system of record

A System of Record (SOR) is the authoritative data source for your data and information. Think of your SOR as individual puzzle pieces jumbled on your desk. Ideally, to preserve its authenticity, data in your SOR is protected against intentional or unintentional changes or edits.

For example, your customer CRM profiles should have specific protected fields like customer name, date of birth, and other base data on that customer. Customer service reps can add to the profile to record conversations and customer notes but not change other critical data. If changes to a data element are needed (such as a change-of-name request), strict checks and balances ensure accuracy before updating the source data element.

Examples of System of Records include:

  • Customer Relationship Management (CRM)
  • Enterprise Resource Planning (ERP)
  • Product Lifecycle Management (PLM) Software
  • Transport Management (TM) Software
  • Survey platform
  • Other systems and software that collect and store product data, customer attributes, or another trusted data source from your various systems.

Source of Truth (SOT)

source of truth

A Source of Truth (SOT) is the data source that provides a complete picture and high-level understanding of your data. It’s also sometimes referred to as the Golden Record or Single Source of Truth. The SOT or Golden Record is like the finished puzzle that shows you the complete picture. Having a single source of truth acts as a repository for all data across the company. It helps ensure everyone makes business decisions based on the same up-to-date data and business goals, and manages the same data that may exist in multiple systems to ensure that only the most trusted single source is used.

Your Single Source of Truth should be based on clean, uncorrupted data from your System of Record and corroborated by your company business leaders. Not every data source will be included in your Source of Truth, but you can place guidelines on what data you can include.

For example, for transparency, you could choose to exclude unreliable data from external third-party sources but include that all information must be collected according to ethical and compliance requirements.

Examples of sources of truth include:

  • Software development systems
  • Regulatory compliance data management
  • Patient health records
  • Content management systems and repositories
  • Data warehouses
  • Master Data Management (MDM)

Another example of a Source of Truth is a search engine like Google. Google has webpages, images, videos, and other search results cataloged through various sources, as the System of Record. When you type in a query, it searches through all the items to deliver you the most relevant content based on your search query as the Source of Truth.

Why is SOR and SOT important for businesses

Organizations and companies that use SOR and SOT to their fullest potential have the knowledge to create a single source of truth to improve business operations, products, services, and customer support.

This data is important because it :

  • Helps evaluate business performance based on up-to-date and relevant data.
  • Organizes data to help eliminate the same data in multiple systems.
  • Provides your business leaders with timely data and information.
  • Provides a system of source data protection through enforced checks and balances.
  • Eliminates data silos and encourages data sharing.
  • Improves the data intelligence capabilities of your organization.

Most organizations already have data in multiple systems available to them. They need to harness it in a Source of Truth System to get the data-informed analytics required to make business decisions and inform new strategies.

Obstacles to SOR and SOT effectiveness

To ensure your investment in a Source of Truth System works for, not against, your organization, you may need to overcome obstacles, including:

  • Getting buy-in from management and team members (by making adoption of these systems easy)
  • Ensuring the collection of high-quality, verifiable data (by reviewing which source systems contain insights you need, from verifiable sources)
  • Understanding what to do with your SOT information after (such as investing in a customer insight platform like Idiomatic to help decode the “why” behind the results – more on this below).

You’ll need to ensure that you have a plan for vetting each new trusted data source, procedures for managing data integrity from intentional or unintentional corruption, and a plan for what to do with your insights when you get them.

How machine learning can benefit your SOR and SOT analysis

Machine learning can take your SOR and SOT data to help uncover the most valuable information and derive actionable business insights. Idiomatic acts as the Source of Truth on customer feedback by pulling data from your System of Records like Zendesk and Qualtrics, then analyzing it to make it useful for business owners. With Idiomatic’s analysis, you can make data-driven decisions to improve the user’s experience.

To learn how we can help you unlock the insights in your systems of record and sources of truth, book an Idiomatic demo today.