Why Information Quality is Important

In a business world as complex as today's, an inefficient data infrastructure can often prove to be a dangerous reality for a lot of corporations. While the direct impact does vary somewhat from industry to industry, the need for effective data quality is often rooted in a company's need for order.

For a company that deals directly with the public, for instance, one of the biggest challenges often revolves around the effective gathering and analysis of demographical data. In the retail world, operational decisions are virtually impossible without the aid of effective market research and effective data quality; they are the key to providing managers with the tools they need to make the right decisions.

Ineffective data management can often result in loss of revenue, insufficient budgeting and poorly-planned business projections. If a company is looking to expand its operations over to a neighboring city for example, data quality is crucial in evaluating the target audience. Without this information, a realistic indication of future sales, a marketing strategy, etc... they are all impossible without effective data quality.

"Every BI report which is the basis for business decisions should have a data quality scorecard associated with it," noted Tommy Drummond, Informatica Vice President of Product Marketing and Data Quality. "Imagine the power of saying "we just made our largest investment decision in 5 years (based on data with a quality score of 45%) or "we are very confident this decision is correct (based on a data quality score of 95%)," he added.

On the corporate side of the fence, data quality is just as, maybe even more vital it comes to running an efficient business. For many large corporations today, effective data quality is quickly becoming a top priority. As a result, countless organizations have begun to undertake enterprise-wide data quality initiatives in an effort to systematically identify and overcome internal data quality issues.

According to published reports, researchers have concluded on a number of occasions that companies today spend billions on unnecessary postage, printing and staff overheads every year. When it comes to company data itself, studies have shown that more than 25 percent of critical data is flawed, often due to human error. While human error can often be the result of simple carelessness, for a lot of companies, it is often the result of a lack of a standardized method for entering and retrieving data.

In today's digital world, once the proper data quality controls are established, it is IT that often manages the proper execution of the standards that are put in place. With some organizations (investment banks, international retail companies, etc.) conducting millions of transactions on a daily basis, it is extremely important that managers responsible for maintaining data quality standards and managers in the IT department are always in sync and in constant communication. It is important that the two teams work together in order to provide their organizations with the optimum level of security and order.

http://www.riskcenter.com/story.php?id=16319