Companies need to discard tunnel vision when it comes to managing information because poor data quality management can cost companies millions and even result in their downfall.
This is according to Paul Nel, partner, Information Systems Assurance & Advisory Services: Ernst & Young South Africa, who recently addressed delegates at SAS Institute SA's annual user group conference.
He says data quality management seldom finds its way to the executive decision-making table and warns companies to discard this kind of approach to information management if they are to cope with the oceans of data they will be faced with in coming years.
"According to Gartner, by 2012, enterprises will need to handle 30 times more information than they did in 2002. This translates to a compound annual growth rate of 40%.
"Bad quality data costs money. The Data Warehousing Institute (DWI) states that deficient data has already cost American businesses over $611 billion. Apart from the costs implications, bad data can hurt in other areas. Poor information management can affect a company's ability to comply with legislation and even cause the company to go under," comments Nel.
He points out that doubtful and deteriorating data quality implies that management information is unreliable, that strategic business decisions will more than likely be based on misinformation and that there will be a misrepresentation of the state of affairs.
"Furthermore, productivity will be lower as more man hours are spent on resolving issues, operational efficiencies will probably decrease and there is always the danger of the environment being left open to fraud.
"Organisations often operate blindly because the information in their systems is incorrect or badly population. At the end of the day, it means that the information cannot be trusted. If the business has the right information at hand, they can make better, more informed decisions," he says.
So what causes all the pain?
Nel lists people (data producers), business and systems processes, and technology as the three main instigators of poor data quality.
"Data gets corrupted in various ways. For instance, a reactive response to changes in environment such as shifts in the economy, changes in legislation, technology or systems enhancements and even changes in customer behaviour, can leave companies on the back foot," says Nel.
He adds that data also often gets corrupted because of the pressure on IT to deliver within unreasonable timeframes or because of poor planning, design, documentation, testing or implementation of business processes, policies and procedures, data standards and database architecture.
"People are also stubborn and don't like change. If change, with regards to people, processes or systems, is poorly managed, it can negatively impact on data quality," explains Nel.
So what can companies do to ensure that their data quality is sound?
Nel advises companies to make data quality management an issue of strategic importance.
"Managing the quality of information within the organisation should also become the responsibility of every individual in the business," he says, stressing the importance of identifying and correcting the root causes of data quality issues.
"Poor data is a symptom and does not exist in isolation," he says.
Annemarie Cronje, Solutions Architect at SAS Institute SA, agrees. She says a company's data quality management solution should be strategically aligned with the business objectives and the solution should be sustainable.
"Companies spend huge amounts of money on all kinds of systems and solutions, like ERP. However, if they are to get any value out of those systems, they need to be able to rely on their enterprise data. Companies need to get their data quality management right before they can even begin to extract knowledge and intelligence out of the information.
"In selecting a data quality technology solution, companies need to look for sophisticated matching and standardisation capabilities that enable users to analyse, clean and standardise data across all platforms," concludes Cronje.
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