R84-billion. Say it quickly and it doesn’t sound like much. But as a US senator once said, a billion here, a billion there, and soon it starts to look like real money, writes Mervyn Mooi, director of Knowledge Integration Dynamics.
R84-billion. That’s what South African companies are losing as a consequence of poor-quality data. It could be a million more, or a million less, but the picture is clear: data either helps companies make money or helps them lose it.
The extrapolation comes from Ovum, which says data of poor quality is now costing US businesses an estimated $700-billion a year, due to inefficiency and lost customers.
Given South Africa’s economic clout relative to the US, and the global economy and the fluctuating value of the rand, that works out to about R84-billion a year. A bit up, a bit down, it may be argued, but the principle remains: bad data is hurting South African business to an incalculable degree.
Flawed processes in organisations are mainly caused by mismanaged data (which is the glue of any process), which then results in poor data quality, creating an endless vicious cycle.
Lost business opportunities within sales cycles can also be hampered due to stale, outdated or inaccurate information and data.
Ovum defines bad data as that which includes outdated values, missing information and inconsistent formats. An organisation with pervasive bad data can lose money on poor targeting of resources and flawed pricing strategies.
Ovum recommends obtaining a data quality tool to help reduce the impact on the bottom line, though it also warns businesses to weigh the benefits of the various tools on the market.
Bad data is pervasive. It is also resistant to attempts to fix it. This means corporations of all shapes and size need to begin the process of corrective action today.
They need to install disciplines and processes such as data profiling, data integrity, data governance and master data management.
If they don’t, that figure of R84-billion will look like small change a decade out.