This is the 4th article in the series titled 5 IT Risks That Could Cripple Your Business: How to Mitigate Them. Please refer to last week’s article for risk #3.
Data is one of the most important assets in any organization today. I spent many years in Oil and Gas and there is a saying “Data is the New Oil”. It just highlights the importance of data to an organization. But like Oil, it is often unrefined when initially collected and must be refined to extract maximum value. It must also be managed properly. I have seen firsthand the devastating impact that data management and data quality issues can have on a business. For example, a company may send out coupons to the wrong customer address if contact information is not accurate leading to lost sales opportunities. Another example is an Oil and gas company may need production numbers on a weekly basis to determine the effectiveness of production but find that the data is delivered monthly.
IT departments spend a lot of time focused on data, especially data quality. Companies desire data but it has to be accurate, timely, reliable, and complete. This is so critical because if employees lose confidence in the data, they will create their own versions leading companies to end up with multiple versions of the truth, if you know what I mean. If you want to know how effective a marketing campaign is, check the data. Want to know how well a product is selling in a market, check the data. Want to know the churn rate of your employees, check the data. Data reveals many obvious as well as hidden stories. In fact, whether it is customer contact information in a CRM, company secret sauce, or something else, it goes a long way in increasing the value of a company. So if it is this important, the company would probably want to protect and manage it to their best.
Have you heard of AI – Artificial Intelligence ? Of course you have. AI is everywhere these days. Seems like every industry are coming up with new use cases for it. However, do you know what fuels AI, it is data! If companies are going to use data to make data driven decisions or fuel AI initiatives, they will need accurate and timely data.
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 ?
How can we mitigate the risks caused by Data Management and Data Quality issues?
The risks for data management issues are great. But there are many things companies can do to reduce them or reduce the impact. As a long time IT consultant, data management, governance, and data quality are a never-ending challenge. However, companies can take a number of actions to improve quality, data management and reduce the impact of issues.
In closing, organizations today clearly understand the value of good data assets. Companies should invest in proper data governance processes and data management solutions to help protect their data and reduce risks. Organizations will have to remain proactive. Remember, data can go from good to bad pretty quickly, whether literally or figuratively, often due to lack of confidence from employees who use the data.
Please look for the final article on Risk #1 next week.