The impact of poor data quality covers widely from internal operations to customers' view which affects the company's reputation.
Many repercussions can come from having poor data quality, among which include customer dissatisfaction, lack of cost-efficiency, and drawbacks in decision and strategy making. The impact of poor data quality covers widely from operational to external levels. Poor data quality not only affects how the company and employees perform their duties but it also functions in a way where the reputation of a business can be viewed negatively by customers and prospective clients.
Data quality is known as the measurement of the condition of data based on a variety of factors such as its accuracy, consistency, completeness, reliability, and relevancy. Business operations and organizations have become more involved with data quality - this is due to the influx of data processing done by enterprises. Consequently, data quality management is now an essential part of the data management process.
Disadvantages of poor data quality
Disadvantages of poor data quality
As mentioned earlier, poor data quality results in many negative impacts. We'll deep dive more into what these disadvantages are:
- Customer Dissatisfaction
At an operational level, poor data quality can affect and lead to customer dissatisfaction and it may damage a company's reputation. Customers expect that the data they or the company provides is accurate and complete. No one wants to be handed out with an error in the pricing or bill, nor would they want to be addressed differently from the information they've already given.
When customers experience these mistakes, you should be cautious as word will spread about your business's poor data management and service. People can take their negative reviews on social media which may damage your company's reputation and hinder you from gaining clients or customers.
- Lack of cost-efficiency
The operational costs of a business are affected on an overall level, especially when time and resources are spent on fixing and detecting errors in data. According to Gartner research, "the average financial impact of poor data quality on organizations is $9.7 million per year."
Businesses have to think and reconsider the costs incurred in their operations due to poor data quality. Employees may have to spend effort on fixing data when this could have been organized correctly through the use of good data quality management applications.
- Low employee retention
The efforts exhausted on poor data quality likewise affect the productivity and job satisfaction of employees. No employee would want to work where they are given incorrect data to accommodate customers. Employees, unless informed of the poor data quality, have the belief that they are given the correct data when working alongside customers.
Just like in the preceding disadvantage, it would inconvenience employees and they would have to spend extra time fixing those mistakes in the data. Poor data quality decreases employees' job satisfaction which may lead to low employee retention.
- Drawbacks in decision and strategy making
It has been said that poor data quality compromises decision-making. This is true since the company, particularly managers and higher-ups, rely on data to execute their decision-making or the formulation of their strategies. With poor data, businesses will find it more difficult to reach and make better decisions.
On top of that, internal mistrust or conflict may brew within the organization when two or more data are incompatible with one another because of poor data quality. In a scenario where data is required to create strategies, the needed data may be harder to acquire or look for and there may be chances when the data is inaccurate or incomplete which may lead to a more challenging execution of strategies.
After factoring in all these disadvantages from poor data quality, enterprises should make it a priority in their operations to invest in better data management applications. Data is at the core of business function and performance. Hence, ensuring the quality of your data can significantly improve the flow within your organization and your relationship with customers.
To know more about how to manage your enterprise's data quality, feel free to contact One Connect Solutions.