Zoominfo.com recently published a nice data decay infographic (a small version is included at the end of this post), that shows the level of master data change for business information. Why is understanding data decay essential? Many times organizations think that if they establish a huge, one-time effort to clean up their key master data elements, they won’t need to do it again.
Not true, as the infographic demonstrates. Your data can decay over time. Addresses and zip codes are always changing because of postal authorities. People move and change jobs frequently.
Major Cause of Data Decay: Mergers and Acquisitions
One key cause of data decay is mergers or acquisitions. The situation with Sara Lee is a good example. Sara Lee renamed its meat business to Hillshire Brands, while the beverage business remained D.E Master Blenders 1753 (which is also merging with Coffeeco).
Are there any mergers or acquisitions happening in your industry? Think about the types of activities you’d do with this type of business master data:
- Optimize supplier channels
- Optimize logistics costs for suppliers
- Sell product to the vendor
- Market new products to the vendor
- Measure customer satisfaction
To do any of the above tasks, you need a time-based understanding of your company. In the case of Sara Lee: when pieces of its brand were renamed, when pieces of the brand were split, etc. Otherwise, how could Sara Lee executives tell if the company is doing more or less business with the Sara Lee brand this year compared to last year?
The answer to the question above, of course, is that you need to establish an organization that understands that information is an asset that can—if bad—be a silent virus. You may think you’re making good decisions and transacting efficiently, but decayed data is silently making these tasks much less successful.
You also need to establish core quality metrics that you can apply to high-priority master data elements. Operationalize these metrics so they run on a recurring schedule. When the quality dips below a certain threshold, initiate a corrective program *in advance* of the raging data fire.
You’ll also need a data governance organization that can manage the uses of time-based information so you can inform business analytics.
Are you there yet? If you’re not sure, check out the Information Governance Benchmarking and Best Practices survey that SAP launched.