The Data Warehousing Institute (TDWI) estimates that poor quality
customer data costs U.S. businesses a staggering $611 billion a year in
postage, printing and staff overhead (TDWI estimates based on cost-savings
cited by survey respondents and others who have cleaned up name and address
data, combined with Dun & Bradstreet counts of U.S. businesses by number
Frighteningly, the real cost of poor quality data is much higher. Organizations
can frustrate and alienate loyal customers by incorrectly addressing letters
or failing to recognize them when they call, or visit a store or Web site.
Once a company loses its loyal customers, it loses its base of sales and
referrals, as well as future revenue potential.
Given the business impact of poor quality data, it is bewildering to
see the casual way in which most companies manage this critical resource.
Most companies do not fund programs designed to build quality into their
data in a proactive, systematic and sustained manner. According to TDWI's
Data Quality Survey, almost half of all firms have no plan for managing
Part of the problem is that most organizations overestimate the quality
of their data and underestimate the impact errors and inconsistencies
can have on their bottom line. On one hand, almost half of the companies
who responded to our survey believe the quality of their data is "excellent"
or "good." Yet more than one-third of the respondent
companies think the quality of their data is "worse than the organization
Although some firms understand the importance of high-quality data, most
are oblivious to the true business impact of defective or substandard
data. Thanks to a raft of new information-intensive strategic business
initiatives, executives are beginning to wake up to the real cost of poor
quality data. Many have bankrolled high-profile IT projects in recent
years - data warehousing, CRM and e-business projects - that have failed
or been delayed due to unanticipated data-quality problems.
According to TDWI's Industry Study 2000 survey, the top two technical
challenges firms face when implementing CRM solutions are "managing
data quality and consistency" (46%) and "reconciling
customer records" (40%). Considering that 41% of CRM projects
were "experiencing difficulties" or "a potential
flop," according to the same study, it is clear that the impact
of poor data quality in CRM is far reaching ("Harnessing Customer
Information for Strategic Advantage: Technical Challenges and Business
Solutions."). A summary can be found at http://www.dw-institute.com/