It’s Almost April 15... Do You Know How Much Tax You Pay by Having Bad Data?
With tax day fast approaching many of us are getting our documentation in order, ensuring we have taken all the deductions we are entitled to, and following guidelines to avoid an audit. We go through this annual ritual to minimize the amount of tax we pay, and, if we’re lucky, maximize our refund.
As someone with a keen interest in data quality, I got to thinking about how we can apply this concept to minimizing the costs associated with having bad data. Business and governments world-wide are increasingly burdened by a growing -- and largely self-imposed – “bad data tax”. Here are just a few examples of the costs incurred:
- Direct costs such as increased labor to find and clean the data needed for a marketing campaign, executive dashboards, mobile apps, or other critical project; or postage costs from mailing to bad addresses
- Indirect costs such as basing strategic decisions on inaccurate information, or damaging customer relationships from errant pricing data
- Lost opportunity costs such as missed up-sell/cross-sell opportunities due to an inability to see patterns and make connections with your customer data
There is a growing body of evidence that the cost of bad data is somewhere between five and 10 percent of national gross domestic product. Research by numerous organizations over the last 10 or so years shows that if anything, the cost of bad data is growing higher each year; meanwhile the amount of data is growing rapidly and is now said to be doubling every two years. The most often quoted research is a 2002 study by The Data Warehouse Institute (TDWI) showing that bad data cost American businesses $600B ($750B in 2012 dollars) or around 5% of the North American 2012 $15T GDP. These costs are on roughly on the same scale as the US government spending on defense and healthcare and over five times the amount spent on education.
There are many statistics all over the internet estimating the costs of bad data, but whatever the numbers are for your organization, all of us who work with data can agree that it is an unnecessary tax on your business performance.
So, if bad data and the costs of dealing with it are so pervasive, why are so few organizations taking concrete steps to fix the problem?
To help address this question, we are hosting a webinar on Thursday, April 11 at 12 EDT. We’ll explore the impact and cost of bad data, and most importantly, will provide you with a plan to ease the pain of getting executive support for a well thought out remediation project.
If you have any questions you’d like us to answer during the webcast, please add them as a comment below. Thanks!