Hamstrung By Defective Data - InformationWeek

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Software // Information Management
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5/5/2006
03:00 PM
Rick Whiting
Rick Whiting
Features
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Hamstrung By Defective Data

Business information that's redundant, outdated, or flat-out wrong trips up organizations large and small--but there are fixes in the offing.

Data Quality Champions
Though BT began adopting data quality practices 20 years ago, its real effort began in 1997 as it struggled with customer billing errors and poor product inventory information. The company's efforts to improve interactions with suppliers and customers using EDI and self-service applications were also being hindered by bad data.

Turner, then in BT's corporate strategy division, recognized that the telecommunications company was spending a great deal of effort correcting data. Rather than create a top-down, companywide program, Turner targeted line-of-business operations and identified a data quality "champion" in each to lead an information management forum. The groups targeted specific projects with demonstrable returns on investment, such as improving names and addresses in marketing data to reduce the number of letters sent to the wrong people and improving private-line inventory record keeping to increase the number of disconnected circuits returned to stock for reuse.

Chart: Quality's Upside -- What benefits has your company derived from high-quality data?"We had to prove to BT that these things were worth doing," Turner says. "Data quality isn't very sexy." The original budget for the data quality efforts was a measly $30,000. As the project expanded, Turner's group developed a data quality methodology incorporating best practices gleaned from inside the company and from outside experts, and centralized data quality management. Recognizing that errors will creep into databases despite its best efforts, BT uses data profiling and cleansing tools from Trillium to identify and remove errant data.

The efforts have paid off: BT has realized as much as $800 million in aggregate savings by improving inventory management, boosting productivity through improved automated interactions with suppliers and customers, and reducing revenue leakage through more accurate billing. BT has parlayed its data quality know-how into a consulting business headed by Turner.

Still, data quality problems are legion and seem to exist to some degree at all manner of companies that manage large quantities of information. Darren Cunningham, product marketing director at Business Objects, shares the story of a consumer technology manufac- turer that routinely sent half of its catalogs to the wrong addresses until a manager pointed out the high number of catalog returns and customer complaints. Taking steps to correct the problem saved the company $12 million a year, Cunningham says.

Data quality initiatives can be part of broader data governance programs. Data governance, a relatively new concept, applies best practices to how information is managed, secured, and used across an organization. It requires establishing a formal set of business processes and policies to ensure that data is handled in a prescribed fashion. Data governance includes standard definitions for data elements to be used throughout a company--just what a "lost customer" is, for example--and metrics for measuring data quality, says Terry Haas, director of the enterprise data management practice at PricewaterhouseCoopers. Data governance also defines the data management roles and responsibilities of managers and employees and limits the ability to change data to designated "data stewards."

There's no standard way of measuring data quality. Bank of America and Cintas use Six Sigma as a yardstick. (Six Sigma is a methodology for measuring and removing defects from everything from data to manufactured products.) Hilton Hotels uses the probability of correctness indicator, or PCI, which assigns data a rank of one through nine based on its trustworthiness. Hilton rates 95% of its customer data at the high end, in the one through four categories. But, reflecting an emphasis on measuring data quality projects by their ROI, BT's Turner says the one metric that matters is money.

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