As an executive or manager, you want to stay informed about the critical financial positions of your company. Ideal dashboards would do well to give you feedback on:
- Sales trends
- Profit statistics over the last month, 6 months, and year
- Current business cash flow
- Accounts Receivables and Accounts Payables
- The trend of profit/loss performance per project
All of that is great. But here’s the question: Do you trust your data?
Lack of trust in the data an enterprise uses to run its business is a problem, no matter what department of the organization it lives in. From the levels of engagement of employees, to how meetings are conducted, to strategic decision-making, bad data can affect the performance of everything it touches. Those times when you’re in a meeting presenting reports, and you have a barely perceptible feeling that something’s not quite right: that’s the bad data talking to you. And it’s a good bet that everyone around you feels it too. It’s uncomfortable and it can undermine the energy and confidence of everyone involved in the project.
Maybe this is the time to listen to Indiana Jones: Trust your instincts.
Your instincts are right. A Gartner survey conducted in the U.S. revealed that bad data can be tremendously costly even to the best of businesses. Here’s what they reported:
- $8.2 million — Average losses annually from the 140 companies surveyed
- $20 million — Approximate losses for 30 of those companies due to bad data
- More than $100 million — Estimated losses per year for six (4%) of the companies
All because of bad data.
Can it happen to you?
Of course, all organizations have some bad data somewhere. But here’s how bad data can snowball into losses in the millions of dollars:
No data strategy. Lacking a unified, strategic approach for your data is probably the biggest reason bad data multiplies. Using data to guide your strategic decision-making can steer you in the right direction; without, it your approach is likely haphazard and ineffective. Better to decide what data is of strategic importance to you and go from there.
The garbage factor. As we’ve been saying for decades: ‘garbage in; garbage out.’ Your source data has to be good to start with to provide anything trustworthy and useful in the end.
Strategic data sources. Where you get you data is just as important as its quality.
What to do about it?
To be blunt, you have to start at the beginning and create data correctly. Get it right the first time. Second, establish a protocol such that, if bad data is detected, correct it immediately. Looking forward, it may seem like it will require tremendous human and financial resources. But it pays for itself many times over.
And get your business trusting your data again.
