A Framework to Understand How Poor Data Quality Hurts Business Performance

Poor data quality costs businesses an average of $13 million per year, with the impact varying across industries. Ensuring data quality is crucial for organizations and requires understanding its role in specific business contexts, setting up data management and governance practices, and using appropriate tools to prevent and troubleshoot issues. The cost of low-quality data depends on factors such as the industry and how it's used within a company. Businesses typically use data in four ways: not at all, for operations, to inform strategy, or as a product. A three-part framework can help identify how data quality impacts business performance. To prevent and troubleshoot data quality issues, organizations should focus on the root cause of problems and utilize data observability tools to monitor dimensions of data quality and shorten time-to-detection and time-to-resolution.