Getting a Real Return from your Data Quality / Data Cleansing Initiative
Some important basic areas that we will cover:
ROI: Return on Investment is a simple measurement of the success of a project. You need to know two pieces
Investment: How much the project will cost and how to get the best deal
Return: How much the project will return and how to maximize return
Some common mistakes are: Using large data quality providers (Costs of over $400K) and their initial quote as the investment. The initial investment can be far larger in terms of additional fees, additional full-time ETL and Data quality stewards, and other internal costs.
- Never accept the original quote. Large software providers usually reduce price by 20-50% within the data quality space.
- Expect additional service fees once the project is up and running that can more than double the cost of the project. Set a cap on these upfronts
- Include the cost of internal resources, usually those trained to use the large data quality solution.
- Use an affordable easy to use desktop-based cleansing software tool before buying a large solution, we suggest DataMatch. Achieve 80% of the results quickly, affordably, show your organization the value of data quality, and get the buy-in needed to implement higher cost/effort solutions.
The return for a project is often not given much thought. It is automatically assumed that if a duplicate record is removed, or the data is cleansed, that the return will automatically take place. In reality, it is important to think through the savings, communicate with the stakeholders, insure a plan is in place to capture the savings, and schedule follow up to insure the savings actually occurred.
Typical areas of return:
1: Customer letters, marketing material, invoices, etc. Number of duplicates * Number of Mailings per year * Mailing cost (Postage, envelop, paper, service charges if using an outside firm)
2: Customer Service and Administration savings. By reducing the number of duplicate customers it is easier to serve the customer and improves communication
Note this is typically a cost avoidance. Unless cost is taken out via reducing headcount, etc there is no realized cost savings, UNLESS the organization uses this extra time productively by increasing customer satisfaction, improving customer relationships and increasing sales. It is important to track these metrics before, during, and after the duplicates are addressed.
Improved Sales and Marketing Effectiveness
By decreasing the number of duplicates there is a significant saving for sales.
- No more time pursuing a lead that is already a customer, and more importantly, increased confidence in the lead data. If the sales lead lists have a lot of current customers, sales can quickly lose interest. A cleansed list gives confidence to the sales person.
- Cross referencing accounts across systems you can find areas where customers are buying similar products or services from one division, but not the other. These are very good ‘warm’ leads that sales love. The chances of converting these leads to sales are very high. If you are a multi-division company, this could be the single greatest area to find a solid return on investment, and get high visibility for your data quality initiative.
Accounts Receivable Effectiveness
- Invoice mailings, typically one per month per customer. Number of duplicates * Number of Mailings per year * Mailing cost (Postage, envelop, paper, service charges if using an outside firm)
- Effort collecting from same account multiple times. This is a cost avoidance. However if an initiative is implemented to use this extra time collecting from more accounts, the cost savings will materialize.
- Appropriate identification of credit risk. If selling to a customer with a low credit rating under ten different duplicate names, your organization may be taking an unnecessary credit risk
- Single view of the customer. Ability to see the sales/profit for individual customers, without the noise of duplicates. This enables better decision making and an increased confidence in the data.
In summary there are many areas where cost savings or avoidance can be found, but to truly get the most value it is important to communicate with the various stakeholders in your organization to Get the Most Out of your Data. Our sales reps can walk you though our Data Quality Solution, DataMatch. Note the minimum tracked ROI ever from DataMatch is over 3100%. Why so high? A very low cost combined with a simple plan.
Looking forward to your comments