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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A study on top IT Management Concerns

According to the Wall Street Journal Business Technology Blog, the Society for Information Management has reportedly released a report on a study conducted with 300 IT Executives.  The results aren’t surprising but worth sharing.

I looked around the web and couldn’t find details on the research so I’ll have to assume that WSJ did their homework for their story 🙂 If anyone has a link to the SIM study, please share.

According to the WSJ post, the results are:

  • IT and business alignment – industry talk for making sure that the projects an IT department pursues match what a business needs – came in number one, a position its held in five of the last six annual surveys.

Some additional topics that were worth reporting:

  • IT departments may be through the worst of the economic downturn. Whereas last year reducing cost was the number-four priority, this year it’s dropped to number seven. Strategic planning climbed five spots – from eight to three – showing that tech execs are focused more on making do with what they have than making cuts.
  • One place tech execs may have already made cuts: their staffs. Last year, attracting new talent was tied for the number one concern. This year, it dropped to number four. Retaining workers was the other concern that shared the top spot and this year it’s dropped to number eight.

Looks like an interesting study.  WSJ interviewed Jerry Luftman, who conducted the survey, and got some excellent insight when he said:

In order to have anything resembling long-term alignment, the business has to be just as committed to keeping in tune with IT as IT is with the business

Wow…sounds like something I said recently in a post titled Information Technology Leadership and Alignment. 🙂

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