Five tips for investing in Data Quality to improve your bottom line

As seen on Forbes.

In the digital economy, data is our most valuable resource. “Data is the new oil” is now a popular saying, and it’s an apt metaphor. Companies that learn to extract and use data efficiently have the potential for huge rewards, driving profits, innovation and customer satisfaction.

Just like with oil, quality matters in data. Quality isn’t free; it requires time, money and attention, but it’s worth the investment.

What Is Good Data? 

Good data quality means the data is fit for use based on the business context and requirements. The business rules governing quality include both quantitative (e.g., “Is the date legitimate?”) and qualitative rules (e.g., “Is the date captured in the American notation?”). In addition, expectations of users regarding availability, reliability, usability, relevance and clarity may lead to perceptions of quality issues. Data quality initiatives need to address various aspects to ensure that data is trustworthy.

Think about global data related to Covid-19 vaccinations. Reliable data must include a patient’s date of birth, the date of each dose, type of vaccine, number of required doses and location of each dose. Quality issues become complicated when you consider that some users received shots from different vaccine manufacturers, or data may have been captured in different states or countries. Poor data quality can prevent various stakeholders — including public health experts, vaccine advocates, and the general public — from making informed decisions. If people perceive vaccine data to be unreliable, they may become more hesitant to get vaccinated and ultimately damage public health outcomes.

The Cost Of Bad Data 

In 2016, an IBM study estimated that bad data costs the U.S. economy $3.1 trillion a year, and in 2020, a Gartner survey found that organizations calculated that the average cost of poor data quality was $12.8 million a year.

In my experience leading a global data and analytics (D&A) solutions provider, I’ve seen that while everyone cares about data quality in theory, when it comes to actually making funding decisions, many customers want to cut corners.

But this is where the rubber meets the road. If you don’t finance data quality initiatives, then you won’t get the result you want. Poor quality data can lead to flawed decision making, top- and bottom-line consequences and decreased employee and customer satisfaction. Incomplete data may result in ineffective marketing campaigns, and a data breach can cause reputational damage or leave you vulnerable to litigation under laws like GDPR or CCPA.

Six Common Challenges In Data Quality Improvements

Improving data quality in your company will have significant long-term benefits, but you must be proactive. Here are six of the most common challenges to be aware of when improving data quality:

1. Lack of awareness: Because data is an intangible asset, it’s often hard to assess quality and address problems. Your stakeholders may not fully appreciate the state of data quality in your systems until a major issue impacts your business.

2. Difficulty justifying investments: To get buy-in on improving data quality, you need to be able to make a solid business case for it, showing how poor-quality data has had negative consequences in the past. But frontline staff may not be willing to document quality issues to build a future business case for something like automation, preferring instead to resolve issues manually.

3. Confusing shared responsibility with IT responsibility: Enterprise data is often used across multiple business units, moving through line-of-business systems into reporting and analysis systems. Quality ownership is delegated to IT as data flows through various pipelines, yet IT is not fully responsible for the source systems. Data quality demands shared responsibility.

4. Resistance to change: Data quality programs are heavily focused on continuous improvement, which calls for users in your organization to adopt new behaviors and perform additional checks and balances with discipline. If employees are unwilling to adapt, you will run into obstacles.

5. Fear of transparency: Data quality assessments and real-time quality dashboards may make some leaders uncomfortable. Looking into past data decisions and results may cause some in your organization to feel embarrassed or concerned, creating yet another roadblock.

6. Lack of sponsorship: Data quality initiatives often compete with new technology and product management investments. It can be tempting to throw money at a shiny new object, spending $X on a cloud computing platform instead of the same amount for a data governance consultant’s annual fee. Data quality is less glamorous and often loses out to modernization initiatives.

Five Ways To Improve Data Quality 

Once you’ve identified the challenges you’re facing, here are five actions you can take to address them:

1. Sponsor beyond budgets: To achieve successful data quality initiatives, you must be willing to invest more than dollars. Articulate the importance of data quality for the organization, inspire cross-functional collaboration, prioritize progress and hold frontline managers accountable for long-term success.

2. Invest in data quality and transparency tools: As the volume, variety and velocity of data increases, you need more specialized tools for quality management. Invest in software that automates quality management for profiling, catalogs, metadata and lineage.

3. Adopt DataOps automation practices: DataOps practices build on DevOps practices from the agile software engineering domain within data analytics. Integrate them to promote collaboration, communication and automation to bring business, applications, operations and data teams together to speed feedback cycles for quality issues and reduce cycle times for delivering D&A products.

4. Embrace a stewardship culture: To create a data-driven culture, you need to incorporate stewardship in your organizational norms and habits. This is a shared responsibility among various stakeholders and includes identifying and articulating quality issues and following governance practices to resolve issues.

5. Build a data management team: Data quality management requires dedicated skills, roles and positions depending on the scope, size and complexity of your organization’s data. Hire the people who can evaluate, design and execute the solutions you need, including Chief Data Officers, data analysts, business and technical stewards, tool experts and data management consultants.

Investing in data quality is a long but worthwhile journey. Evaluate your company’s needs and challenges, and invest in the practices, tools and leadership required to advance valuable data quality initiatives.