Profiting from Your Most Important Business Asset
Tom Redman, a.k.a. the “Data Doc”, believes that information is an organisation’s most valuable asset, but that poor data quality costs businesses 20% of their revenues.
Tom Redman, a.k.a. the “Data Doc”, believes that information is an organisation’s most valuable asset, but almost all companies grossly underuse their data assets. From his work with hundreds of companies across many different industries, Tom’s diagnosis is that the cost of poor data quality to a business is typically 20% of its revenues. Couldn’t your business benefit from a revenue uplift of one fifth right now?
With poor quality data costing organisations so much, it ought to be easy to build a business case for doing something about it, but projecting (and measuring) the return on investment (ROI) is something that many people struggle with. In my experience, data quality programmes nearly always realise sufficient tangible & quantifiable benefits to make their sponsorship a no-brainer.
My advice is to build a business case around the concrete benefits you can measure and demonstrate to your management. I’ve seen, for example, many customer data quality projects justified on the savings made by eradicating the printing and posting costs of sending mail to duplicated customers or undeliverable addresses. Sure, the improved customer service that results is also a benefit, but how do you measure its impact on the bottom line? Especially when there are other initiatives delivering improvements in the same area.
Building a business case with a clear ROI and continuing to measure the value of your data quality programme is critical. There’s nothing more certain to grab and maintain the interest of you executive. If it was ever acceptable to invest in data quality without achieving a measureable return, those days are surely now over.
Tom made this point in a recent webinar hosted by the IAIDQ; he went as far as saying that you should abandon a data quality initiative if you can’t demonstrate a return on investment. “Hear, hear,” say I. Tom’s new book, The Data Driven Company, promises to provide insight into new strategies for profiting from quality data (I’m expecting my copy any day), but I’m also keen to hear from you – send me your comments below.
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