EIU Business Forum

03 Nov 2003

CFO: Flood of corporate data overwhelms business managers
Key points:

- Despite—or perhaps partly because of—a sizable drop in the cost of storing and retrieving information, many corporations are in danger of being swamped by information

-Experts estimate that anywhere from 10% to 30% of the data flowing through corporate systems are bad—inaccurate, inconsistent, formatted incorrectly, entered in the wrong field, out of a value range and so on

-To clean up the problem, some companies have turned to what's known as ETL (extract, transform and load) software

-With Sarbox approaching, finance managers will likely be fielding tough questions about data—particularly from audit committees

A flood of corporate data, intensified by Sarbanes-Oxley compliance, threatens to overwhelm business managers, says CFO

Recently, a major technology vendor sent out questionnaires to senior business managers about data and decision-making. A number of them came back with additional comments, most of them variations on a theme: "Data are buried in a sea of noise." "Swamped in information." "I'm drowning." Despite—or perhaps partly because of—a sizable drop in the cost of storing and retrieving information, many corporations are in danger of being swamped by information. Software applications from ERP to CRM to SCM may generate great efficiencies, but they also generate great floods of data. So great, in fact, that nowadays CIOs speak of petabytes (quadrillions of bytes) of storage rather than mere terabytes (trillions), a trend that must surely worry the branding heads at Dayton-based Teradata, a subsidiary of NCR Corp. But not just the sales heads: in a survey released by the technology company in September, more than half of 158 corporate executives said their businesses have two or three times the amount of information available to them as they had last year.

What's more, a lot of these data are useless, or worse. Experts estimate that anywhere from 10% to 30% of the data flowing through corporate systems are bad—inaccurate, inconsistent, formatted incorrectly, entered in the wrong field, out of a value range and so on. In its most recent study of corporate data integrity, the Seattle-based Data Warehousing Institute found that nearly half the surveyed companies had suffered "losses, problems or costs" due to poor data. The estimated cost of the mistakes? More than US$600bn.
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