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Build a Powerful Business Case
for Data Quality with Metrics
Without quantified measurements few business managers appreciate the extent to which
data quality issues impact their companies
Money and resources wasted; sales
missed; extra costs incurred. Recent re-
search by industry analyst firm Gartner
shows that the shocking price that com-
panies are paying because of poor quality
data adds up to a staggering $8.2 million
annually.
That number is the average loss esti-
mated by the 140 companies Gartner sur-
veyed in August 2009. Twenty-two percent
of respondents thought it was closer to $20
million and 4 percent even put the figure as
high as $100 million.
It’s a sobering thought. But do business
managers really appreciate the scale of the
problem? Not according to a 2006 survey
from The Data Warehousing Institute. More
than 80 percent of the business managers
surveyed believed that their business data
was just fine, yet half of their own techni-
cal people took a very different view to their
executives.
The truth is that few business managers
appreciate the extent to which data quality
issues impact their companies since typically
no quantified measurements are made. This
means proposals for data quality improve-
ment projects fall on deaf ears.
To have any chance of budget ap-
proval or executive buy-in, data qual-
ity project proposals need an assertive
business case. They need the backing of
metrics that communicate evidence of
a real problem that business managers
readily understand -- a problem that poses
a risk to the business and to the key
By Ed Wrazen
Ed Wrazen, Vice President of Product Marketing
Harte-Hanks Trillium Software
performance indicators by which its suc-
cess is measured.
Make the Case with Data Quality Metrics
By developing a program of data qual-
ity metrics, measurement and regular re-
porting, organizations can build increased
awareness of what data quality means for
the business. Metrics can help demonstrate
what risks or issues might be presented by
any decline in data quality levels as well as
what opportunities might be gained by in-
vesting in improvement. Metrics also sup-
port objective judgment and reduce the in-
fluence of assumptions, politics, emotions
and vested interests.
It is important to note that there’s no
point in measuring and reporting on all of
an organization’s data or every aspect of
that data -- be selective. A metric showing
that 9 percent of customer records in a
marketing database lack a middle name is
likely of little consequence to KPIs. But if
5 percent are missing a postal code, then
it could be of some importance, because if
one million mailings are sent annually, then
50,000 would be returned. And if the metric
referred to a billing database, it could make
a strong business case for a data quality
project, because invoices worth millions of
dollars might not be reaching customers
– thus delaying or even threatening receipt
of revenue.
Where to Measure: Key Processes
For most organizations, business KPIs
and the executive decisions aligned with
them will most likely relate to cost, revenue,
profitability, procurement, logistics, products,
customers, suppliers and other important
assets. Identifying the processes support-
ing these KPIs, the data required for these
to operate effectively and the quality of that
data enables organizations to determine the
impact of poor quality in tangible terms. The
result is an improved ability to gain business
understanding and support for building the
business case for data quality.
For example, you might establish that:
• With direct print and mailing costs be-
ing significant and increasing, and the CEO
keen to show green achievements in the
annual report, the current 100,000-plus
pieces of mail returned per annum must be
cut down. Customer address data accuracy
is a key issue.
• In the last six months, 8 percent of online
customers had to wait longer for delivery
than expected, despite the products being
in stock. Product codes in the order system
are inconsistent with the stock system, re-
quiring manual inspection and resolution.
• Senior management is considering ratio-
nalizing product lines. But the sales ledger
reports show discrepancies with the mar-
keting department’s business intelligence
system. Management cannot trust the
cost/sales figures, delaying decisions and
incurring unnecessary costs.
What to Measure: Dimensions
After identifying which data to produce
metrics on, the next step is to define which
of the many aspects of its quality to mea-
sure. These dimensions might include:
• Structure: Is the data in the right
format for it to be usable?
• Conformity: Does it comply with
critical rules?
• Accuracy: Does it reflect the real
world?
• Completeness: Is business-required
information present?
• Timeliness: Is it sufficiently current?
• Uniqueness: Are duplicate records
creating confusion?
• Consistency: Is the data the same, regard-
less of where it resides?
• Relevance: Is it useful to the business in
its pursuit of objectives?
Defining which dimensions are important,
prioritizing them and producing data qual-
ity metrics that are meaningful for business
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owners is typically the job of one or more data
stewards. Data stewards are individuals who
understand the key business processes, the
role of data in those processes and the intrica-
cies of what makes good data.
How to Measure: Using Rules
Having determined the data to be mea-
sured and which dimensions to measure
by, it is then possible to build a set of data
quality rules against which to profile the
data and compute compliance metrics.
For example, if repeat sales from customer
service representatives are key, and cus-
tomer contact information must be present
and accurate for the CSRs to make sales
calls, then perhaps completeness of fields
at original purchase is important, together
with accuracy and structure of telephone
numbers. If customers are waiting too long
for the delivery of goods that are supposed
to be in stock at time of order, then data
consistency should be measured because
there may be a disparity between product
codes in the order processing system and
the warehouse stock and dispatch system.
In producing metrics, it’s best to be very
focused at first, concentrating on just a few
areas where data appears critical to busi-
ness performance. It’s also better initially
to generate just a small number of metrics
on important characteristics that have real
meaning to business managers in their
roles and responsibilities.
Indicating and proving that the business
cannot be confident in the data it relies on
for certain important processes, decisions or
compliance reports should justify further in-
vestigation. Success in one area can then be
used as a reference to help communicate the
value that could be won from metrics in other
areas of the organization.
Making Data Quality Metrics Relevant
Once the use of data quality metrics
becomes accepted and management backing
is secured, extend the practice to cover wider
data sources and report in more detail. It’s
then important to define who requires what
level of reporting.
Management may desire a high-level over-
view, so a data quality dashboard will be help-
ful. The dashboard should be able to group
and aggregate scores into meaningful metrics
associating data quality with key business pro-
cesses or functions. It should also provide drill-
down functionality to multiple levels of detail
and permit custom reporting, allowing busi-
ness owners, data stewards and data quality
analysts to visualize data quality metrics and
trends appropriate to their needs.
A facility to monitor and measure data
quality over time is fundamental too. Only
then is it possible to prove that investments in
data quality are making a difference.
Data quality metrics, when aligned to
business KPIs have the power to increase
business user awareness, understanding and
support for data quality investments. Using
data quality metrics to identify the real issues
that impact cost, revenue, profit or other im-
portant business metrics will most certainly
help drive the business case for data quality
improvement.
Ed Wrazen is vice president of product
marketing at Trillium Software, a division
of Harte-Hanks. You can contact him at
ed_wrazen@trilliumsoftware.com.