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CU STO M ER-R ELATED D ATA Q U ALITY

ISSUES CA U SE PAINPosted by: Stuart Selip | on August 24, 2013

Custom er-Related D ata

Quality Pain in Early

Survey Results

We have an early yet strong indication of

customer-related data quality issues across

the full size range of organizations responding

to our Poor Data Quality Survey. While there aremany other areas of inquiry within our survey,

I’ve selected customer data quality for this

review because of its universality. Every business needs, and hopefully values their

customers. However, despite all the talk about “knowing your customer” and the ascendancy and

near-universality of customer relationship management (CRM), our respondents say that their

customer-re lated data quality is sub-par and that has re al dollar costs.

Strong and Rapid R esponse Suggests w e Struck a N erve

At the time of this writing, the survey, developed by the consortium of Principal Consulting, Robert

Frances Group, Chaordix, and the IBM InfoGov Community has been in flight for two weeks, and has 88

completed responses with another 40 in the pipeline. Given the early August launch, with summer and

vacation on people’s minds, the extent of this survey response suggests that Poor Data Quality

leading to Negative Business Outcomes has struck a raw nerve . You can read about the

survey launch, and many prior posts on the survey, starting here.

Custom er-R elated D ata Quality Issues Caused Lost B usiness

Our survey respondents were unanimous about the existence of poor customer-related data quality

and told us about the problems they experiences, the likely causes, and the monetized cost of those

problems. I’ve prepared several graphs that I’ll present following, with minimal commentary. The results

largely speak for themselves. Click on the graphs to see a full size version.

As shown in the analysis of survey question 9, more than 70% of

the respondents either

customer-related data

problems or knew of

such problems in their organization. Question

10 responses show

more than 68% of

respondents believed their organization lost client business

because of poor customer-related data quality.

Let’s look at question 10 responses broken down by

business size. Bad news… nearly 89% of

respondents working for businesses in the 5,000

-10,000 employee size are reporting losses due

poor customer-related data quality. Only for the

smallest business in the survey did fewer than 50%

of respondents report customer data-related losses.

Poor C ustom er-R elated D ata Q uality M ade Custom er

GO O GLE PLU S

PRIOR POSTS

6Select Month

CATEGORIES

6Select Category

H O M E CO N TEN T O FFER IN G S KU D O S ABO U T CO N TACT D EALS! BLO G



Acquisition & Retention M ore C ostly

As shown in the Question 13 graph, the 5,000 – 10,000 employee-sized businesses lead the way

again, with 100% of respondents indicating that poor

customer-related data added to the cost of acquiring

and/or retaining their customers. In no business size

category did less than 50% of respondents affirm

additional customer acquisition and retention costs.

Sim ilar Causes Cited for Poor

Custom er-R elated D ata Quality and PoorD ata Q uality O verall

Inaccurate, unreliable, ambiguously defined, and missing

data lead the causes

cited by respondents

when asked about poor

customer-related data

quality (left graphic),

and when asked about

the top three causes of

poor data quality across

all survey problem

reporting areas.

These are fumbles in basic data quality blocking and tackling.

Respondents Estim ated the Cost of Poor C ustom er-Related

D ata Q uality

A key driver of our survey effort is putting a

monetized value on the cost of poor data quality.

Therefore, we asked our respondents to estimate

the cost, loss in value, or similar concept that

resulted from poor data quality, or the increase in

profit or value that would result if poor data quality

were avoided.

More than half our respondents offered a

monetized estimate to our question aboutadditional revenue that might have been realized if

poor customer-related data quality had been

eliminated. Over 15% of respondents believe d

that up to 5% more revenue might have been

attained if poor customer data quality issues

were eliminated. An additional 20% believe d that betwe en 6% and 10% more re ve nue might

have been attained.

W hatcould 6% m ore revenue m ean in realdollars?

So, let’s say a 1 billion dollar company fixed its customer-related data quality issues and attained a 6%

revenue increase. That would mean $60,000,000 in additional revenue. It might cost that company

about $3,000,000 to obtain and implement data quality tooling and services to make that fix.

That’s a 1900% Return on Inve stment.

Given numbers like these, is it really possible that IT organizations haven’t been able to sell

their business colleagues on data quality investments? That sounds improbable, yet it

appears to be true. Remember, this is just the customer-related data. There are 12 other

functional business area on our survey, each with additional opportunities to increase

reve nue and/or decrease cost.



The Bottom Line

We are at a very early point in the life of this poor data quality survey, which will run through the

end of this calendar year, and then repeat annually. The interim results I’ve presented here are

not surprising, but they will prove disappointing to data quality professionals. I hope they

will motivate organizations to improve their data quality situation.

One takeaway at this stage is that InfoGov community professionals are eager to be heard about the

data quality problems they experience and their associated costs. They want the world to know that

data quality problems are still rife, and they are costing organizations and their stakeholders real

dollars.

I will report on survey progress, aggregated responses, and additional insights as we enter Fall, and

the relaxation of summer begins to fade.

ha re this:

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Posted in Assessing, custom IT research, data quality, Surveying | 3 Comments »

3 C O M M EN TS TO CU STO M ER-RELATED D ATA

QUALITY ISSU ES CAU SE PAIN

D a t a Q u a l i t y B a s e l i n e » P r i n c i p a l C o n su l t i n g L L C . says:

December 11, 2013 at 5:58 pm

[…] Frances Group and I will be interviewing IBM Infogov Community members who participated in our

2013 “Poor Data Quality – Negative Business Outcomes” online survey. In conjunction with our online

survey, we will find out about the challenges our survey […]

Reply

R o b b e d o n t h e L a s t M i l e o f S a l e s » P r i n c i p a l C o n s u l t i n g L LC . says:February 4, 2014 at 1:37 pm

[…] Tuesday morning, I looked at our “Poor Data Quality – Negative Business Outcomes” survey results

and I noticed a surprising agreement among participants in one sales-related area. […]

Reply

T h e D i s p r o p o r t i o n o f T h e o r y t o K n o w l e d g e » P r i n c i p a l C o n s u l t i n g

L L C . says:

March 24, 2014 at 3:47 pm

[…] have written frequently about the miserable data quality situation revealed by our Poor Data Quality

– Negative Business Outcomes survey. Respondents have told us that, in a big way, they lose money

and suffer business challenges […]

Reply

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