Bad Data is a Social Disease (Part 1)

Organizational bad data is a social disease easily passed to your business partners and stakeholders With 200 completed responses in our "Poor Data Quality - Negative Business Outcomes" survey, run in conjunction with The Robert Frances Group, the IBM InfoGovernance Community, and Chaordix, it is safe to say that bad data is a social disease that can spread easily and quickly. Merriam-Webster defines a social disease as

a disease (as tuberculosis) whose incidence is directly related to social and economic factors

OK, that definition works for the bad data social disease. In this case, the social and economic factors enabling and potentiating this disease include

• Business management failing to fund and support data governance initiatives
• IT management failing to sell the value of data quality to their business colleagues,
• Business partners failing to challenge and push-back when bad data is exchanged
• Financial analysts not downgrading firms that repeatedly refile 10-Ks due to bad data
• Customers not abandoning firms that err due to bad data quality and management

No doubt you can think of other reasons why the bad data social disease spreads. Was the source of this disease a doorknob? Not according to our survey respondents, who said the chief sources of bad data social disease are inaccurate, ambiguously defined, and unreliable data, as shown in the graphic following. As you can see, in the chart immediately previous, those are not the only causes of the disease. Social diseases negatively affect the sufferer, their partners, and the community around them. According to our respondents:

• 95% of those suffering supply chain issues noted reduced or lost savings that might have been attained from better supply chain integration.
• 72% reported customer data problems, and 71% of those respondents lost business because the didn't know their customer
• 71% of those suffering financial reporting problems said poor data quality cause them to reach and act upon erroneous conclusions based upon materially faulty revenues, expenses, and/or liabilities
• 66% missed the chance to accelerate receivables collection
• 49% reported operations problems from bad data, and 87% of those respondents suffered excess costs for business operations
• 27% reported strategic planning problems, with 75% of those indicating challenges with financial records, profits and losses of units, taxes paid, capital, true customer profiles, overhead allocations, marginal costs, shareholders, etc.)

This response from our survey respondents highlights the truly dismal state of data quality across a spectrum of organizations.

What is in Part 2?

In next week's post, we'll examine some of our survey results specific to bad data and the supply chain. A successful supply chain requires sound internal data integration and equally sound data exchange and integration across chain participants.A network of willing participants exchanging data is fertile ground for spreading the social disease of business. Expect a thought experiment about wringing the bad data quality costs out of supply chain management, and see what some supply chain experts think about the dependency of effective supply chains on high quality data.

The Bottom Line

Believe that bad data is a social disease and take a stand on wiping it out. The simplest first step is to make your experiences known to us by visiting the IBM InfoGovernance site and taking our "Poor Data Quality - Negative Business Outcomes" survey. When you get to the question about participating in an interview, answer "YES"and give us real examples of problems, solutions attempted, success attained, and failures sustained. Only by publicizing the magnitude and pervasiveness of this social disease will we collectively stand a chance of achieving cure and prevention. As a follow-up next step, work with us to survey your organization in a private study that parallels our public InfoGovernance study. The public study forms an excellent baseline for us to compare the specific data quality issues within your organization. You will not attain and sustain data quality until your management understands the depth and breadth of the problem and its cost to your organization's bottom line. Bad Data is a needless and costly social disease of business. Let's move forward swiftly and decisively to wipe it out! Published by permission of Stuart Selip, Principal Consulting LLC