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IQ in the News: Lessons Learned

Published
  • April 01 2005, 1:00am EST
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Hardly a day goes by that you cannot find at least one news story of problems caused by poor quality information. Here are only two examples from late January and their lessons learned.

Example 1

Some Tennesseans must have thought they had won the lottery when they received their W-2 forms with someone else's data in it, while others simply gasped at the pay "cut" they suddenly found in their W-2. According to a state spokesperson, The State of Tennessee had a "machinery error." This spokesperson speculated that the error affected only a small number of state employees, saying the mix-ups were "somewhat isolated because they occurred only between employees who live within the same ZIP codes."

Isolated or not, the state had to resend new W-2 forms to every one of its 53,000 employees, at the expense of the taxpayers. A board member of the Tennessee State Employees Association (TSEA) shrugged it off, saying, "Mistakes happen. I'm sure this wasn't intentional."1

IQ Lesson 1: There are always costs of poor quality information. The costs of information scrap and rework here include postage, the cost of the forms, envelopes, reprinting, personnel time in overseeing and conducting the re-sending effort and computer costs, not counting lost productivity as employees discussed the mistake over the water cooler.

A breach of privacy was avoided only because state employee salaries are public information. In private industry, the release of confidential information could have resulted in legal liabilities and loss of confidence among customers.

Recommendation: Every organization, not just the State of Tennessee, should measure the costs of the problems caused by poor quality information when they have such failures. This establishes the business case for process improvements that can prevent nonquality information.

IQ Lesson 2: The attitude of both the State spokesperson and the TSEA board member reflect Stage 1 "Uncertainty" immaturity in the IQ Management Maturity grid. They seem to say, "These kinds of problems are a normal part of business." They lack awareness that these problems are, in fact, not normal. They can be prevented by applying sound quality management principles to information.

Recommendation: The State of Tennessee, as with other organizations, would be a better steward of its tax dollars if it invested in a sound quality management system that can prevent such process failures in the future. Every valid quality management system has demonstrated that the costs of proactive quality management to improve processes is significantly less than the costs of process failure and information scrap and rework incurred.

Example 2

Last summer, the Los Alamos National Laboratory virtually shut down operations when it "discovered" that two computer disks of classified information were missing.

Separate investigations by the U.S. Energy Department and the FBI concluded, however, that the disks never existed. The problem was caused when bar codes were created for the disks, but the disks were not produced.

Because of this problem, the Energy Department decided to slash its management fee payment to the contractor by two-thirds. They will pay the University of California only $2.8 million instead of $8.7 million.2

IQ Lesson 3: The broken process was the lack of a step, controls or checklist to confirm that the information and real world were in sync. The information was apparently created before the disks were created. However, there was no step to delete the information when no disks were actually produced.

Recommendation: You must define every process so that it is repeatable, and control it to prevent errors. Los Alamos should conduct a root cause analysis to find the cause of the failure and improve the process with at least a confirmation step that matches the information with the disks.

IQ Lesson 4: Information quality must be warranted. If you pay for information or for work that includes information, you should expect a warranty, just as you do when you buy a car or an appliance.

Recommendation: Create warranties with suppliers of purchased or outsourced information. Include remedies for nonquality commensurate with the costs caused by nonquality. Several companies are writing warranties into contracts with their information suppliers.

The IQ lessons here are not solely for the organizations that experienced these problems. Unless your organization has a mature information quality environment, it is experiencing problems like this daily. Will you be the catalyst to help your organization prevent such costly and embarrassing incidents?

What do you think? Let me know at Larry.English@infoimpact.com.

References:

  1. Seibert, Trent. "Some W-2's go to wrong people." The Tennessean, January 26, 2005, p. 2A.
  2. "Missing [nuclear lab] computer disks did not exist, nuclear lab probe concludes." Associated Press story, The Tennessean, January 29, 2005.

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