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Value of Data Management

By Data Management

Poor data quality, redundant data, and lost data can cost companies 15 percent to 25 percent of their operating budget. What would a 15 percent cost reduction be worth to your Project or Program?

The "80-20 rule"

Woods Hole Coastal and Marine Science Center Staff on a Field Activity on the R/V Rafael

"80% of a scientist's effort is spent discovering, acquiring, documenting, transforming, and integrating data...20%...is devoted to more intellectually stimulating pursuits such as analysis, visualization, and making new discoveries." --Michener

The Cost of Poor Data Quality

According to Larry P. English, president and principal of Information Impact International, Inc., poor data quality can cost companies 15 to 25% of their operating budget.

Table of Contents

Efficiency and Data Quality 

The Director of DataONE, Bill Michener, uses the "80-20 rule" based on survey results and data management interviews with scientists:

"Eighty percent of a scientist's effort is spent discovering, acquiring, documenting, transforming, and integrating data, whereas only 20 percent of the effort is devoted to more intellectually stimulating pursuits such as analysis, visualization, and making new discoveries."

What if you could spend your discovering, acquiring, documenting, transforming, and integrating time more efficiently?

Larry P. English is the president and principal of Information Impact International, Inc. He is an internationally recognized speaker, teacher, consultant, and author in information and knowledge management, and information quality improvement. According to Larry English, poor data quality can cost companies 15 percent to 25 percent of their operating budget. How can this be?

 

Poor Data Management in the News 

  • Medicare Payment Errors Near $20B (CNN) December 2004
    Miscoding and Billing Errors from Doctors and Hospitals totaled $20 billion in FY 2003 (9.3 percent error rate). The error rate measured claims that were paid despite being medically unnecessary, inadequately documented or improperly coded. The survey did not document instances of alleged fraud. This error rate actually was an improvement over the previous fiscal year (9.8 percent error rate).
     
  • Audit: Justice Stats on Anti-Terror Cases Flawed (AP) February 2007
    The Justice Department Inspector General found only two sets of data out of 26 concerning terrorism attacks were accurate. The Justice Department uses these statistics to argue for their budget. The Inspector General said the data "appear to be the result of decentralized and haphazard methods of collections & and do not appear to be intentional."
     
  • Oops! Tech Error Wipes Out Alaska Info (AP) March 2007
    A technician managed to delete the data and backup for the $38 billion Alaska oil revenue fund - money received by residents of the State. Correcting the errors cost the State an additional $220,700 (which, of course, was taken off the receipts to Alaska residents).

 

Examples of the Cost of Poor Data Management 

  • A wildlife biologist for a small field office was the in-house GIS expert and provided support for all the staff's GIS needs. However, the data were stored on her own workstation. When the biologist relocated to another office, no one understood how the data were stored or managed.
    • Solution: A state office GIS specialist retrieved the workstation and sifted through files trying to salvage relevant data.
    • Cost: One work-month ($4,000) plus the value of data that were not recovered.
       
  • An office contracted out data collection but failed to provide the contractor with appropriate data standards. When the inventory was completed, the data were found to be worthless because they were collected to the wrong standard.
    • Solution: Re-inventory.
    • Cost: $65,000
       
  • In preparation for a Resource Management Plan, an office discovered 14 duplicate GPS inventories of roads. However, because none of the inventories had enough metadata, it was impossible to know which inventory was best or if any of the inventories actually met their requirements.
    • Solution: Re-inventory roads.
    • Cost: Estimated 9 work-months/inventory @ $4,000/work-month (14 inventories = $504,000).
       
  • Cobell Litigation: As of 2011, three Interior Secretaries and 10 circuit judges have been engaged in the case, which has involved the collection of 400 million pages of documents. It has also generated more than 3,500 docket entries, enough to fill a room at the courthouse. Think about how much money and time has been spent by the Department of Interior on this lawsuit. Could some of these costs have been mitigated by better data management?
    • Cost: DOI estimates it has spent $127 million on Indian Trust accounting from 2006-2010.

 

References 

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