The Cost of Bad Data

Mike Sebastian, Chief Information Officer (CIO) at SourceCheck….and a great guy to boot, has recently had an article published on InsideARM titled “The Cost of Dirty Data to Accounts Receivable Managers“.

I met Mike for a Coke recently and the conversation turned to bad data and what it costs organizations annually.  He told me about his recent article and send the link over…and I was amazed I what I read. The article discusses the cost of bad data and gives some interesting statistics, such as:

The Data Warehousing Institute (DWI) estimates the cost of bad or ‘dirty’ data exceeds $600 billion annually. Another study indicates that 2% of contact records become obsolete each month, costing a firm 15-20 % of its operating income

$600 Billion annually!!

The article is an interesting read all by itself…but Mike hit upon a subject in the article that i’ve written about in the past (see Aligning Business & Technology with People and Information Technology Leadership & Alignment for examples).  In the article, Mike writes the following:

I am amazed at how very smart business people treat technology-related problems as somehow different. We in the technical world can get immersed in computer jargon, endless acronyms, special handshakes, etc.; keep the conversation on business results. Ask a lot of seemingly naïve questions. If your technical services person insists on giving you technical answers, speak with a supervisor or find another resource – period. Information technology is no different from any other tool in your office; it ultimately supports your bottom line.

Go back and read that…especially the sentence that says “keep the conversation on business results”.

So many times in the IT space, we tend to get off in the weeds about technology and ‘solutions’….when we should be focusing on the business requirements first.  The best technology in the world won’t help if you don’t know what the business requirements are or if bad data is clouding your judgement.

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