Why quality matters when it comes to data 

5m read
Data Analytics, Data Strategy

Data is one of the biggest assets a business has at its disposal. When used to its advantage, data can inform stronger decision-making, improve efficiency, provide detailed business intelligence and greater customer insights leading to a competitive advantage. But any data strategy is only as effective as the data underpinning it. ‘Bad’ data can lead to wobbly foundations and the downfall of many good plans. If you are a business looking to better utilise the data available to you here is why quality matters and our expert advice on how to enhance the quality of your data. 

What is bad data?  

Put simply, ‘bad’ data is data that is not really fit for purpose and it’s not going to necessarily provide the intended or required insight. In our experience, most ‘bad’ data can become good with a little help but some of the challenges we have seen that might feel familiar include: 

  • Data that is incomplete  
  • Data that is inaccurate  
  • Data that has been duplicated  
  • Data that is disparate 
  • Data held in multiple third-party systems 
  • Data locked into opaque approval processes  

While missing or incorrect data here and there may not seem like the end of the world for your business, low-quality or bad data can be incredibly costly. Just take Uber for example, who ended up owing tens of millions to their drivers following an error in their accounting data.  

The high price of bad data

While data can lead to more informed strategic insights and smarter decision-making, bad data can do the exact opposite. Making ill-informed business decisions can cause untold damage to your organisation. To make sure your business has the best strategy, you need to guarantee your decisions are based on data you can trust.  

Many businesses are turning to new technologies such as AI and machine learning to improve their operations and drive down costs. But AI is only as useful as the data it’s trained on and so poor-quality data will lead to inaccurate outputs that can be extremely detrimental to your business. When businesses are looking to innovate and update their operations through emerging technologies, a strong data set is key to the project being a success. If you are curious about how AI can be utilised in your business then read our blog on the AI and ML solutions to consider for your business  

Increased costs

Low data quality has a direct impact on your costs and expenditure. For example, inaccurate inventory data can disrupt your supply chain, while faulty customer records can lead to missed sales, affecting both your top and bottom line. As far back as 2016, leading tech company IBM found that every year bad data was costing the United States alone $3 Trillion USD. That’s why as a business, bad data cannot afford to be ignored.  

Missed opportunities

Hidden insights can also be buried beneath layers of raw or low-quality data which causes slower decision making and missed business opportunities. Knowing how to properly analyse your data and then use it to your advantage is incredibly important, particularly in today’s competitive climate.  

Compliance risks

When it comes to data, there are strict regulations that must be followed. From data protection laws to security measures failing to comply due to issues with your data quality can lead to both hefty fines and serious damage to your reputation. Before implementing any data-driven digital transformation you need to assess the risks and know how to protect your organisation.  

At MDRx we pull from a 1,500-strong team of industry-leading lawyers from Mishcon de Reya, taking a compliance-by-design approach for all our client projects. For those looking to implement data analytics as part of their digital transformation, navigating the rules and regulations can be a minefield. Having industry-leading experts at your side will ensure you don’t lose focus and maximise the opportunities available to you. 

Why does bad data exist?

One of the biggest reasons for low-quality data is a lack of data governance policies within an organisation. No clear guidelines of how data should be collected and maintained leads to inconsistent data formats and silos where information remains fragmented and isolated. Human error is another major reason for low-quality data. Inaccurate data input along with data misinterpretations can all impact data quality in your organisation.  

How to improve data quality

For businesses looking at how to improve data quality, gain better insights into their business and pave the way for a successful digital transformation, here are the practical steps to take:  

  • Assess the state of your current data by conducting a thorough audit to identify any inconsistencies, missing information, and duplicate entries you may have. This will give you a benchmark on where your data is currently at and how it can be improved.   
  • Set up governance policies that establish clear guidelines on data ownership, entry protocols, and access controls. This will ensure accountability within your organisation and make sure everyone is on the same page when it comes to how data is collected, stored and used.  
  • Define clear KPIs to measure the impact your data quality has on your business operations and overall performance. Having a clear line of sight of what outcomes you expect your data to achieve will help you track if they are working.  
  • Standardise your data by implementing consistent formats for all data across your organisation. This will help to clear up inconsistencies and inaccurate recording of data.  
  • Understand where your data is coming from and invest in quality data sources which can give you the best insights.  
  • Invest in staff training so that your team understands the importance of data quality, can interpret what data is telling them and instil in them the knowledge and tools to maintain it.  

Of course, this is just a brief breakdown and many factors need to be considered when implementing an impactful data strategy that creates meaningful results. But having seasoned data experts at your side will help guide you and your organisation through the process.  

Here at MDRx, we understand that successful digital transformation hinges on a solid foundation – and that foundation is built with clean, accurate, and reliable data. From a world-leading cultural heritage charity to prominent currency exchange and crypto network Ripple, we have helped forward-thinking organisations reach their full data potential.  

Our expert team of data scientists and strategists will help you harness the power of data to drive your business forward. So, if you want to improve your data quality and ensure that your business is making the right data-driven decisions then get in touch now.