Data management is a board responsibility

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Enormous benefits can accrue from good data management, but there are serious penalties for getting it wrong. Recent research will cause anxiety – as some companies realize how their money is being wasted. But all is not lost.

The research was devised to give an insight into a wide range of factors, including management awareness of the crucial importance of data quality, and companies’ level of competence in managing that data.

Sue Tomalin is senior product manager of Experian, who commissioned the research. She is accountable for the entire product development life-cycle, ensuring that ideas are developed through to product launch within time and budget. A straight-talking woman, she sees simplicity as an asset to communication, and good data management as a must.

Tomalin finds it odd that, in an economic downturn, companies are still wasting millions of pounds on badly-targeted mail shots, due to suspect data management, and says the survey report is both thought-provoking and disturbing.

Quotable quotes
“Increased revenue [from Data Management] is measured in millions, as opposed to saving on processing costs which is in thousands.”
– US Top 500

“Our company sells data. If we didn’t get it right, we wouldn’t exist.” – UK Top 500

“Bad quality data has had a very long and negative impact.”
– Australian Mid-market

“We had a lot of data in different systems that wasn’t compatible and the system was scrapped.”
– Australian Top 500

Food for thought
The research turned up many interesting points about marketing data. Did you know that:
• 69% of direct marketing received has incorrect details

• 70% of consumers regularly receive duplicate mailings

• The telecoms sector is the worst offender for bad targeting

• Only 6% of respondents feel that organisations knew them, despite vast spending during 2000

• 65% of people read less than half of the direct mail they receive – and many read none at all

• 84% of all direct marketing is targeted to the head of the household – this means businesses are missing large segments of their audiences.

Money down the drain
3.5 billions shots were sent out in 2000, across all industry sectors. If 70% of people received duplicates, this represents a loss of millions.

The study also revealed:
• Financial institutions favour the male customer when sending direct marketing re banking and credit cards. 53% of male respondents receive this type of direct mail, whereas only 45% of women do. This industry spends over £450 million on direct marketing, and still does not target its audience correctly.

• 15% think that mail order companies know their customers best.

• 20% of respondents felt that the retail industry was most able to recognise their buying habits.

• 73% of respondents felt there had been no improvement in direct marketing at all over the past few years.

PriceWaterhouseCooper, on behalf of Experian, interviewed the chief information officer, IT director or equivalent executive at 600 companies across the US, Australia and UK. This sample included a broad mix of major ‘Top 500’ corporations, middle-market businesses, and companies primarily engaged in e-business – giving a cross-section of corporate activity across the three countries.

Findings suggest that companies’ reliance on data, and therefore their exposure to data quality, is already showing a marked increase, and will continue rising sharply and irreversibly in the foreseeable future.

Over 90% expect their usage of automated decisions and processes to grow during the next two years, with findings suggesting that traditional companies will significantly close the gap on e-business players in their use of automation.

Buck stops with the board
Data quality is an area of collective responsibility in which the buck ultimately stops with the board. If the CIO is being made solely responsible for it, there is a failing in the management structure. Boards are apparently failing to give a lead in this crucial area, so responsibility for data management issues usually remains in the IT department, especially in traditional ‘old-economy’ businesses.

Most respondents claiming to have a data strategy admitted it was driven principally by the IT function, undermining their own pretensions to board-level control. As one UK Top 500 spokesperson said: “Data is something the board don’t give a thought to. It is left to the IT area to deal with.”

DM left to IT
Not only is responsibility for data management in the wrong place, it also looks set to remain there. When respondents wishing to develop a data management strategy were asked where responsibility would lie, board-level leadership hardly figured in their replies – and IT still predominated.

Taken together, these findings underline a widespread failure by companies to appreciate the strategic importance of data management.

Seamless flow
Data must flow seamlessly through every part of any successful organisation, and as such its quality and coherence are crucial to all of them. For a director in charge of marketing, production or customer relationship management to fail to take an interest in data management, or any responsibility for its quality, is a clear abdication of duty.

The companies which have established clear management control over data management are acknowledging that it is a core competency – like managing people or the customer relationship – and that, as a foundation of the business, it should be handled at board level.

Piecemeal approach
Most companies’ react in a piecemeal manner to specific or short-term pressures, with little in terms of a strategic perspective on the wider effects. There is no substitute for a documented, board-backed strategy taking the wider long-term interests of the business into account. But a series of policies is exactly what most of the respondent companies appeared to have.

Trust is crucial
In many areas of business activity, nothing less than total confidence in data is sufficient. Any reservations at all reflect a lack of underlying trust – and in all forms of commercial activity, but especially e-business conducted on-line, trust is crucial.

Chasms of unease
Only 15% of respondents professed themselves ‘very confident’ about the quality of other organisations’ data, suggesting a vast chasm of unease among respondents over the accuracy and integrity of the mass of data now passing between organisations. Since absolute – and shared – confidence in data is vital, greater discussion at senior management level in every company would clearly be a logical first step towards establishing it.

Fundamental asset
Many companies are entering a crucial phase of the data age without full control or knowledge of the one asset most fundamental to their success – data. The value of your business will increasingly depend on the successful management of this asset.

Data management is critical to the future of businesses of all types, and is being addressed at the wrong level, in the wrong place, and in the wrong way across too many corporate organisations. As a result, poor data quality is threatening to undermine massive investment being made elsewhere, in areas from marketing to systems infrastructure. There is clear evidence of organisations failing to tap the huge potential value in their data, whilst continuing to incur the penalties arising from data shortcomings.

Time to act
Given these findings, corporate boards need to seize the initiative on data management, and mount a radical overhaul of their attitudes and objectives. Only through an agreed, documented and rigorously implemented data strategy indivisible from the rest of the company’s strategic drivers, with committed leadership from board level and clear lines of responsibility, will a company put itself in a position to create value in the coming years.

Truvue
Experian’s recently-launched Truvue technology – a customer data integration (CDI) solution – links customer information from disparate databases across an organisation. The principle of CDI is a consistent consumer identification technology which tags each customer with his/her own identifier in the form of a ‘key’ or a PIN. This allows each individual to be recognised and tracked over time and across different data sources. Via Truvue, companies can link points of prospect and customer data held in different databases across an organisation to build up a single, consistent picture of a consumer.

Sue Tomalin
Tomalin has worked at Experian for four years, quickly working her way through the ranks. She provides consultancy to clients, the technical and implementation teams and the global sales forces. Senior account manager for two years in Nottingham, she headed to the States, where she was a product manager in Dallas and New York City. She is a member of the Institute of Direct Marketing and holds a First Class Honours degree in Business Studies from Nottingham Trent University.

www.experian.com

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By admin
04th Jul 2001 04:27

Its a "given" that customer informatin should be shared throughout an organization. However, what is not recognized is that, for the information to make a difference, the design of the organization has to be able to support its flow. For example, "siloed" organizations, i.e., stratification by function, are notorious for impeding the dispersal of information throughout the company. The departments are only concerned with that bit of information that pertains to their function (e.g., sales, turnaround time, etc.}. When customer information determines a firm's design, all aspects of the organization are significantly affected: e.g, reporting structure, whether to be structured by product or geography or market-niche, what should/ could be outsourced, etc. Another way of looking at the issue is that organizational design that reflects information flow can be a competitive advantage for a firm.

Thanks (0)
avatar
By admin
04th Jul 2001 04:27

Its a "given" that customer informatin should be shared throughout an organization. However, what is not recognized is that, for the information to make a difference, the design of the organization has to be able to support its flow. For example, "siloed" organizations, i.e., stratification by function, are notorious for impeding the dispersal of information throughout the company. The departments are only concerned with that bit of information that pertains to their function (e.g., sales, turnaround time, etc.}. When customer information determines a firm's design, all aspects of the organization are significantly affected: e.g, reporting structure, whether to be structured by product or geography or market-niche, what should/ could be outsourced, etc. Another way of looking at the issue is that organizational design that reflects information flow can be a competitive advantage for a firm.

Thanks (0)