Bad data is costing Irish firms €10bn a year

22 Jan 2009

Poor-quality data in IT systems is costing Irish organisations over €10bn per year according to Gary McSherry, a Sogeti data management specialist and author of the new Irish Sogeti report.

“Based on our experience in Ireland, and on international research, poor-quality data is a significant problem in Ireland,” said McSherry.

“The Data Warehousing Institute estimates that, in the US, poor customer data alone (ie. name and address data) costs over 6pc of GDP. Our experience suggests that Ireland is no better when it comes to data quality.”

The Irish Sogeti report quotes Larry English, author, commenting: “Process failure and information scrap and rework caused by defective information costs the US alone US$1.5trn or more.”

Irish companies are unfortunately mirroring the same behaviour according to Sogeti.

Gartner estimates that, over the next two years, more than 25pc of critical data in Fortune 1,000 companies will continue to be flawed — ie the information will be inaccurate, incomplete or duplicated.

“While poor data quality is accepted in most organisations, the cumulative impact can be enormous and lead to increased cost, at least 10pc, but probably as much as 20pc of revenue,” McSherry observed.

“It also leads to lost sales opportunities, angry customers, flawed decision-making and company-image deterioration,” he warned.

Sogeti reports that international experience has shown that typically if it costs €1 to process a simple operation or transaction when all the data is perfect, this will rise to €10 if it is not.

“Companies may have little or no executive-level insight into the costs of poorly integrated data. Incorrect master data often leads to low confidence in the outputs of management reporting and analysis systems. An inconsistent view of supplier data leads to companies spending more money than required on purchases because they can’t adequately analyse what they are buying and who they are buying it from.

“Most data-quality problems are hidden in day-to-day work and are just accepted as a fact of life. However, from time to time, a relatively small data-quality issue can result in a major high-profile ‘computer’ problem.”

McSherry pointed to some of the data quality issues that Sogeti comes across on a daily basis. Firstly, whether the organisation has the data and the validity of that data, for example, whether the data values fall within an acceptable range or domain.

Then there’s also the issue of whether that data is consistent such as not storing the same piece of data in multiple locations and the accuracy and relevance of that data.”

“As the amount of data a company manages increases, it becomes more difficult to accurately maintain that information in a usable, logical framework. This Sogeti paper explores the major issues of building better data across the organisation and designing robust, master data management processes to derive improved business value,” McSherry added.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years