IT Management

Most business and IT professionals would agree that poor data quality results in negative business outcomes. It makes logical sense. Other than by accident, the only way a positive business outcome results from poor data quality is when the poor quality data belongs to a competitor.

To gain insight into the ramifications of poor data quality, an in-depth study was conducted by a small group of organizations working together to delve into the issue. Since August 2013, the Robert Frances Group, Chaordix Inc., Principal Consulting LLC and the IBM Information Governance Community have surveyed, interviewed and analyzed data collected from 600 business and IT professionals. This article will show that the real cost of poor data quality to business is significant and pervasive across all functional areas of organizations, yet can be cleaned using today’s modern tooling at a very reasonable cost. If organizations will invest in increasing the quality of their data, the opportunity for a huge return on investment (ROI) is present.

Let’s look at the data quality issues revealed in the survey and interviews.

The Current State of Customer Data Is Appalling

While we surveyed 12 functional areas of respondent organizations, the state of customer data is a bellwether. Respondents confirmed customer-related data quality issues exist across the full size range of organizations (Fortune 500/Global 2000). Every business needs and values their customers. However, despite all the talk about “knowing your customer” and the ascendancy and near-universality of customer relationship management (CRM), survey results and interviewees say their customer-related data quality is subpar and carries real dollar costs to organizations.

Customer-related data quality issues caused lost business. Survey respondents were unanimous about the existence of poor customer-related data quality. These problems are most pervasive in organizations with more than 10,000 employees, but respondents reported significant problem rates in all other size ranges as well. Please review the following survey questions and the resulting responses in Figures 1 through 4.

What could 6 percent more revenue mean in real dollars? Consider the Figure 4 result of more than 18 percent of respondents believing their firm could have earned between 6 percent and 10 percent more revenue. If an organization with one billion dollars in revenue fixed its customer-related data quality issues and attained a 6 percent revenue increase, then that would mean $60,000,000 in additional revenue. It might cost that company about $3,000,000 to obtain and implement data quality tooling and services to make that fix, but the result is a 1,900 percent ROI.

Is it possible that business and IT executives cannot marshal the resources to gain a 1,900 percent ROI? That impressive ROI covers customer-related data. The survey covers 12 other functional business areas. All of the functional business areas offer additional opportunities to increase revenue and/or decrease cost. Let’s look at another data quality problem and the opportunities a fix-up would offer.

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