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Dirty data is a business problem, not an IT problem, says Gartner

Over the next two years, more than 25 percent of critical data in Fortune 1000 companies will continue to be inaccurate, incomplete or duplicated, according to research and advisory firm Gartner Inc.

Stamford, CT-based Gartner said it expects that three-quarters of large enterprises will make little to no progress toward improving data quality until 2010. To gain competitive advantage from information, organizations need to identify data stewards in the business who are responsible for the quality of the information and manage information as a corporate asset, the company said.

“Data quality is not an IT problem,” said Andreas Bitterer, Gartner’s vice president of research. He made his remarks this week at the company’s inaugural Business Intelligence and Information Management Summit in Sydney. “IT can help fix it, but the business must own the problem.”

However, Mr. Bitterer said technology will play a role in fixing many data quality issues, and organizations need to invest in a portfolio of data quality solutions such as profiling, cleansing, matching and enrichment.

Mr. Bitterer also said that dirty data or poor data quality is an often-overlooked business issue, and it can have a large negative impact on a business.

Gartner research shows that poor-quality customer data leads to significant costs, such as higher customer turnover, excessive expenses from customer contact processes like mail-outs and missed sales opportunities. But companies are now discovering that data quality has a significant impact on their most strategic business initiatives, not only sales and marketing. Other back-office functions like budgeting, manufacturing and distribution also are affected.

Compliance and transparency are now at the top of the list of most companies’ data concerns, according to Gartner. Legislation such as the US Sarbanes-Oxley Act, the European Basel Accords and the Privacy Act in Australia now demands that information is accurate and managed appropriately. Mr. Bitterer said that by introducing data quality initiatives, some companies have added millions of dollars to their bottom line as they gain benefits such as increased sales, lower distribution costs and better compliance

According to Gartner, the market for data quality tools is currently small (approximately $300 million in annual license revenue) but growing. Large vendors, such as Business Objects, IBM and Pitney Bowes, have entered via acquisitions, while numerous small vendors have developed their own data quality technology.

In addition, more companies are starting to put more focus on data quality initiatives. In Gartner’s annual survey of 1400 CIOs worldwide released this month, business intelligence was again ranked the number one technology priority, as organizations increasingly rely on data to drive growth and innovation.

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