Why Data Management and Data Quality issues is a Huge Risk:

I am not going to kid you, it is not easy for most companies to ensure consistent, quality data.  If it was, then data management would be a breeze for everyone.  Data management can be one of the greatest challenges to an organization.  During my career in technology, it was not uncommon for organizations to think their data was not great.  In fact, I cannot remember many who thought their data was really good as a whole.  Many would say it is ok, or some systems are good while others are not so good.  Some have vast amounts of data and management is not only a challenge but improper collection and management is a huge risk.  Before we get into the risks, let’s be clear that data is collected by a number of means  including software systems that companies use to run their business, like inventory control systems, or HR  management systems as well as statistics or Key Performance Indicator (KPIs) collected from business processes that could reveal a lot when examined.  So what are the risks ? 

• Ability to make data driven decisions – Accurate data is crucial for informed decision-making. Poor data quality can lead to incorrect analysis, which might misguide executive decision-making, potentially resulting in missed opportunities.  In worst cases, it could result in financial losses. 
• Loss of Confidence in Data – It is crucial that companies  have confidence in their data.  We often use the term one version of the truth. This means that if an employee in the accounting department pulls sales numbers and another person in the customer service department pulls the same sales numbers, then the numbers should match.  The data should be consistent across all departments.  What happens if this is not the case ? Please continue to read. 
• Data silos – Data silos are when data typically owned and managed by a group in a company is held separately from other parts of the company.  It is as if this data is not part of the larger organization.  The larger the organization, the more common this happens.  This may work well for a department but does not easily integrate with other departments in the company.  One of the reasons this happens is lack of confidence in the company’s data assets as a whole so each group tends to hold their data tightly as their version of the truth.  They treat it like their personal data and not a part of the larger whole.  This really hinders getting a full view of the organization because it requires integrated data from all groups.
• Competitive Disadvantage – In a data-driven market, the ability to leverage accurate and timely data is a competitive advantage. Poor data management and quality can hinder an organization’s ability to stay competitive, innovate, and respond swiftly to market changes.
• Compliance violations – Many industries have strict regulations around data management and data quality.  If a company fails to comply with these regulations, they could face heavy fines and penalties.  For example, a healthcare company that fails to protect patient data could face serious HIPAA violations.
• Data Privacy – Everyone understands the value of data and seems to want your data these days.  A lot of grocery stores give out store cards to customers with the promise of giving discounts to those consumers whom use the cards.  What they fail to reveal is that the card contains a history of everything a consumer has purchased.  That makes it really easy to know which products to market to them.  But even more troubling, a customer’s purchase history is personal.  Do you want everyone to know every type of personal product you have purchased or each prescription that you may have filled.  It should be protected against improper access or theft.
• Employee productivity – Poor data management can lead to operational inefficiencies throughout the organization. For example, if data is not properly organized or accessible, employees may waste time searching for the information they need to do their jobs. This can lead to decreased productivity and increased costs.  In addition,  poor data quality can also lead to increased errors, such as shipping products to the wrong address or sending invoices to the wrong customer.  Errors like this damage customer relationships and lead to lost revenue.
• Reputation Damage – One last thing to think about is damage to a company’s reputation.  Data breaches are so common these days.  Happens to large and small companies.  However, when it happens, the unwelcome recognition can be intense.  Most of us have probably received an email or letter in the mail from a vendor stating that there was a data breach and some personal information may have been compromised.  It is difficult for the consumer when companies ask for data that they cannot protect or do not take the proper precaution to protect.