Poor data quality can have a significant impact on the productivity of businesses. A study conducted by MIT Sloan revealed that employees spend up to half of their time improving the quality of their data. This could be due to various factors such as inaccurate information or inconsistencies across different sources.
The quality of data collected not only affects the efficiency of your staff but also contributes to inaccuracies in output. This is especially true for business intelligence tasks that heavily rely on the quality and accuracy of the provided data.
How to Evaluate Data Quality
Quality is a subjective term. What may be considered poor quality to one person may be sufficient for another. To eliminate these inherent biases, data quality is measured on a six-point scale.
Here, accuracy refers to the factual correctness of the data. Consistency ensures this correctness exists across different overlapping data sources. Completeness indicates the availability of all necessary information across all rows of data. Validity ensures that the data conforms to specific value parameters set by the organization. Uniqueness guarantees that there is only one instance of a particular data point across different platforms. Timeliness ensures that all data is up-to-date, reflecting the appropriate timelines.
Assessing data quality based on these parameters helps organizations produce high-quality content for their business intelligence initiatives.
The Impact of Poor Data on Business Intelligence
Business Intelligence encompasses various infrastructure and processes used to collect and analyze data produced by a company’s activities. It supports decision-making across all organizational departments, including sales, marketing, human resources, and finance.
Business Intelligence follows the computational philosophy of “GIGO” – Garbage In, Garbage Out. In essence, the quality of input data determines the quality of output. Inaccurate or incomplete data can significantly affect the quality of the output, just as invalid or outdated data does.
Business Intelligence is not a cheap endeavor. The most sophisticated Business Intelligence tools can cost up to $5000 or more, without considering the manpower required for data processing and deriving meaningful insights.
Poor quality data can hinder your business intelligence goals as it undermines the confidence level at which decisions are made. Poor data quality contributes to poor decision-making, which can be detrimental to your business.
Let’s take the example of a company using BI tools to inform its product launch strategy. A common approach involves understanding the most profitable demographic, conducting competitive market analysis, and gathering customer surveys to identify gaps in the market.
The effectiveness of this exercise depends on the quality of the data used. Asking the wrong questions in surveys or misinterpreting competitive analysis can lead to faulty conclusions, directly impacting the decisions made.
Depending on the industry, such mistakes can result in substantial financial losses.
How to Improve Data Quality for Business Intelligence
The most effective way to improve data quality for your business intelligence initiatives is to establish robust protocols and standard operating procedures (SOPs) for data aggregation. Avoid relying on generic datasets. Instead, identify the specific problem to be solved and work with a dataset specifically curated for that problem. This way, you can eliminate any noise that may skew the results unintentionally.
It is also good practice to determine the most appropriate way to source data. This can be done through traditional Extract, Transform, Load (ETL) methods, data warehouses, or digital data integration. Depending on the problem you are solving, choosing the right method ensures you have the most up-to-date data needed to process information.
Hiring dedicated data stewards whose role is to vet each data source ensures that the data fed into your business intelligence operations complies with predefined rules and guidelines.
Establish processes for continuous improvement. Business Intelligence often involves a trial-and-error approach. Continuous improvement allows for incremental adjustments towards perfection so that the quality of input and output constantly improves.
Lastly, organizations must realize that tools are effective only when used correctly. Success in any Business Intelligence project is not solely derived from the tools deployed but from the people utilizing them. Hire experts who can execute your BI initiatives effectively, ensuring that data quality issues are identified and addressed promptly.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the company.
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