Data quality as a path to successful business
Part 2 of the series "Success factors for reliable figures"
Successful companies know how important high data quality is. This has a significant impact on all areas of the company and is also the basis for important business decisions. Find out how the quality of your figures influences the outcome of your decisions in part 2 of our series "Success factors for reliable figures".
How the quality of your figures influences the outcome of your decisions
Henry Ford once said that the greatest enemy of quality is haste. Filling out the customer's visit report? Can't do it right now, you have to leave before you get stuck in the evening traffic jam. The following week, some of the details are no longer in your head. You have to compare all the figures with each other - but they are stored in different formats, units and in different documents and systems.
The analysis has to be ready by tomorrow and the afternoon is full of meetings - you work as best you can with the information you have available. Your employee lacks an easy way to store their information in one place - so they don't do it at all. This works up to the point where others also need this information in order to make decisions.
These and similar situations in daily business reflect how often numbers and data play a role and how little attention we actually pay to them (unless you are a data analyst ;-)). In 2018, the total volume of data was 33 zettabytes; by 2025, a data volume of 175 zetabytes is forecast - a multiplication by a factor of 5. These figures emphasise even more clearly why successful entrepreneurs cannot avoid big data and the use of business intelligence tools.
But what is data quality anyway?
Data quality is a measure that shows how relevant and correct (company) information is. Managing company data in a structured way costs money. However, bad, incorrect or incomplete data is much more expensive. The condition of a company's data is even considered a production factor, influences the value of the company and should therefore be given the attention it deserves.
Effects of poor data quality
Inadequate data management always leads to poor data quality - and this can cause a lot of damage.
Almost 25 years ago, Thomas C Redmann already surmised that 8-12% of operating profit is lost due to poor data quality. In 2017, he revised this figure upwards - to 15-25% (!).
IBM estimated that poor data cost the USA around 16% of GDP in 2016. In 2002, according to the Date Warehousing Institute, this figure was 600 billion dollars and therefore 5% of GDP
No wonder 84% of CEOs are concerned about whether the quality of the data is a good basis for their decisions. Conversely, this means that only 16% have confidence in their data when making important decisions.
After all, decisions are only as good as the data on which they are based
When you cook at home, you prefer to choose fresh ingredients, a good composition and perhaps even organic products. You would never use old or spoilt food, ingredients that don't suit the flavour of the dish at all or simply omit basic items from the ingredients list. Because then your dinner won't be a success. I think you know what we're getting at. No matter how fancy your software is, what functionalities it masters (or doesn't) and how many processes you have digitised: If your data is bad, your results will also be unreliable. Thus the well-known garbage-in garbage-out principle - which results in high costs, wrong decisions and low trust.
Good data has a positive impact on your entire value chain!
"Good" data not only influences data quality per se. It influences the general quality, costs, flexibility and speed of your business processes and is therefore a key lever for your value chain. With the help of high-quality data, you can also measure the actual economic benefit your data generates:
You increase productivity as your employees have more time for their actual tasks. Adherence to regulations and compliance requirements becomes easier.
Precise targeting, personalised communication and support throughout the customer journey via marketing activities improve your customer contact.
Sales! Your sales department in particular benefits from good data quality in order to exploit sales opportunities as well as cross-selling and upselling possibilities.
You make reliable and intelligent decisions for the success of your company.
Our conclusion
High data quality is essential for sound business decisions, efficient processes and long-term corporate success.
This might also interest you
Invest time in building up your knowledge. This will put you in a stronger position for the future. Our webinars are also available on-demand - whatever suits you best.
