The ninth annual Technology Issues for Financial Executives survey results indicate that improving data quality and information integrity is a top priority for chief financial officers (CFOs).
It`s a new category in the survey, it commanded 58% of respondents` attention and data quality ousted security as the top concern.
The survey is sponsored by the Committee on Finance & Information Technology of Financial Executives International, the Financial Executives Research Foundation and Computer Sciences Corporation.
The discovery is a clear indication that better data quality and information integrity have achieved the critical status they deserve.
There are two primary reasons for the shift: reactive organisations must get a handle on their financial systems for regulatory reasons, while many others are looking to extend the systems they implemented to meet regulatory requirements so they can derive the benefit so critical to competitive markets.
CFOs are also becoming increasingly aware that, on average, 30% of business data resides on the mainframe, 10% is outsourced and 80% sits outside of ERP systems.
According to the report: "Most respondents indicate that the lack of information integrity is negatively impacting operations and performance, and about 70% plan initiatives in the next year to improve their information integrity."
Considering the ease with which data is collected by modern technology systems, it is not surprising that great volumes of it have been collected in data stores throughout organisations. Even if error percentages remain static, the sheer volume of data being collected means that more of it is likely to be defective.
The problem with that is that data describes, regulates and measures all of a business`s operations and performance.
Customer impact
Even if error percentages remain static, the sheer volume of data being collected means that more of it is likely to be defective.
Mervyn Mooi is a director at Knowledge Integration Dynamics.
Measurement is at the root of all management and data is at the root of all measurement, which puts it at the centre of the universe.
Customers are at the sharp end of poor quality data. They reasonably become annoyed with their insurer`s life department that doesn`t recognise them from the short-term vehicle department; when their bank`s credit department cannot interrogate the current account department; and when they are routinely offered similar products to those they have already bought. Suppliers and partners also suffer from poor-quality data, but it`s the executive direction of the company that needs the clearest picture if it is to steer the company into ever smoother, richer waters.
Data cleansing initiatives and audits help organisations tackle these issues. They improve data integrity.
The report states: "Data quality and information integrity is fundamental for effective and efficient business operations, from transaction processing to management and external reporting to decision support. Without data quality/information integrity, workers, managers and executives question the information that underpins their work activities."
Employees work with the data to derive information so that they can perform their individual tasks that collectively drive organisations ever onward toward profit. The information they derive from poor-quality data is so erroneous as to be not ineffectual, but counter-productive and more than likely harmful to the organisation.
Costly failure
The report also states that of all the top issues cited by CFOs, they came back to a recurrent theme of past reports: corporate performance management (CPM). The very foundation of CPM is data.
Mess up the data and any CPM initiative, expensive and pervasive, is bound to fail. CPM is nothing short of establishing the metrics, system, process and methodology required to manage the performance of an organisation.
CPM failure is expected to be expensive. The report notes that most businesses with more than $5 billion in revenue will conduct an average $23 million CPM projects, "several over $100 million and one [plans] to spend $200 million".
While CPM may be the biggest reason to ensure good quality data, it`s not the only one. Almost every corporate IT initiative hinges on the data businesses collect. Get it wrong and every other investment is wasted.
* Mervyn Mooi is a director at Knowledge Integration Dynamics.
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