Is management asking you: What is the return on investment of information quality (IQ) management? Who is "doing" information quality well? (What benchmarks?)

Now you can tell them! This column shares: the real savings leading-edge organizations have achieved and documented through IQ management; what these organizations did to accomplish them; how you can measure costs of nonquality; and the IQ money-back guarantee.

The companies of seven IQ practitioners (who were allowed to share their benefits publicly) speaking at The Information Quality Conference in San Diego (September 8-12, 2003) have measured and documented savings of $576,925,000 as a result of their information quality improvement. That's more than one-half billion dollars – of wasted time, materials and other direct costs of process failure and information scrap and rework caused by poor quality information and data. Not only that, some practitioners say their opportunity gains have been even greater than direct savings!

The investment costs required to achieve these benefits were a fraction of the costs of the information scrap and rework eliminated. One organization realized a return on investment (ROI) of more than 700 percent.

Is this a fluke? No! By applying sound information quality management principles, any organization can achieve the same degree of savings.

These organizations achieved these results by understanding and applying sound quality management principles such as Six Sigma, total information quality management (TIQM) and others to processes that create, maintain, move and deliver information. The organizations:

  • Recognized that IQ problems are business problems that create waste (information scrap and rework) that is entirely avoidable.
  • Found effective ways to get their message to management who could create change.
  • Created partnerships between information systems staff and business areas, and from business area to business area, to work as a team to understand and solve each other's IQ requirements.
  • Effectively exploited IQ software tools to automate as much IQ assessment, data correction (cleansing) and defect prevention as possible.
  • Measured the business costs of nonquality information and then measured the savings achieved to sustain management commitment.
  • Implemented training in IQ management techniques. One organization has licensed IQ training courses for IQ staff, business management, and information producers and is providing training to everyone in their company.

TIQM Process P3 (Improving Data Warehouse and Business Information Quality) defines how to measure the costs of nonquality information. Keys to direct cost measurement include:

  • Calculate direct versus indirect (lost and missed opportunity) separately. Indirect costs ("soft" measures) can be calculated fairly precisely based on customer lifetime value.
  • Identify your organization's key performance indicators and business drivers. Translate the costs of nonquality information directly to how nonquality prevents accomplishment of key business objectives.
  • Identify critical information with known quality problems that have significant negative impact on the business.
  • Identify business processes requiring that information.
  • Meet with subject-matter experts to identify whether the impact of nonquality (all IQ characteristics, completeness, accuracy, timeliness, etc.) is high, medium or low.
  • Study the processes with high impact first to measure the waste, then medium impact (as time permits).
  • Measure the waste of all categories of resources. People-time spent in rework, verifying and correcting information, reentering the same data in disparate systems and gathering information from multiple databases. Money paid to customers, fines for noncompliance, money paid to third-party providers for data correction and deduplication of customer data. Costs of multiple communications to the same party, or raw materials scrapped due to inaccurate inventory data or inaccurate product specifications. Space and equipment consumed by processes of information scrap and rework. Computer, network and storage equipment consumed by operational redundant data, redundant data-create applications, etc.
  • Document the procedures used to measure costs.
  • Measure the degree and costs of nonquality before and after you improve a process.
  • Document your ROI gained in a permanent "IQ Lessons Learned" knowledge base to sustain management commitment.

If you are serious about information quality and want to create business benefit through your IQ initiative, then The September IQ Conference is for you. Find out how these organizations reduced their costs of nonquality so dramatically.

If your management is skeptical, have them read The IQ Conference's money-back guarantee. See conference details at

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