Piecing Together the Data Picture

Computerworld - Poor data quality can confuse your customers, undermine your applications or even put you out of business—and there's everything in the world you can do about it. More than simple data-cleansing, which involves correcting a misspelled name or changing "Avenue" to "Street," a data quality initiative addresses more complex and subtle problems.

For example, one New York bank that had a 3% to 5% bad-debt ratio on its credit card operation acquired another bank, says Aaron Zornes, a San Francisco-based analyst at Meta Group Inc. "It turns out that the acquired bank had a 15% bad-debt ratio. The New York bank took over, and the bad debt nearly put them out of business," he says.

If the acquiring bank had had a data quality initiative to run large database-comparison jobs off-line, the problem could have been averted, says Zornes. Bank managers could have predicted the loan default rate by comparing the outstanding debt, incomes and even partial ZIP codes of the acquired bank's credit card customers against a historical database of similar customer profiles.

"They would have been able to tell that this company wasn't a good buy," Zornes says. "Enterprises cannot afford to wait on data quality efforts."

Data quality initiatives are critical to enterprise applications such as CRM and ERP systems, Zornes notes. And according to The Data Warehousing Institute in Seattle, data quality problems cost U.S. businesses more than $600 billion per year.

"The basis of any CRM system is the integrity of the data," says Steve Deeb, vice president for CRM at Monster Worldwide Inc. in Maynard, Mass. "Any and all processes are driven by that data."

In addition to business needs, there are now regulatory pressures to maintain better data, Zornes says. "If someone has bought a large amount of ammonia-based fertilizer, then rents a car," the U.S. Department of Homeland Security wants to know about it, he says. "And this isn't information you can wait months or even a week to find out."

The tools to to improve data quality exist, says Zornes, but although "businesses give lip service to the need for data quality, too often they don't do anything about it."

James Eardley, a managing director of CRM at FleetBoston Financial Corp., agrees. "Data quality gets short shrift too often. It's not important until you need it," he says.

Although in dissimilar industries, FleetBoston and Monster both use CRM software from Siebel Systems Inc. in San Mateo, Calif., and faced similar data quality problems. Duplicate records in customer and contact databases meant one department didn't know what another was doing.