The Staggering Business Cost of Data Errors

by Didi Gurfinkel

These solutions can mean the difference between building a formidable competitive advantage or being left in the dust.

©alphaspirit/iStock/Getty Images Plus

Human beings make mistakes all the time. Indeed, we make an average of 118 per year in the workplace alone, from incorrect inputs on Excel spreadsheets to those dreaded, inadvertent “Reply All” messages.

Spanning the spectrum from relatively harmless and easily remedied to costly and significant, human error doesn’t always have far-reaching ramifications – but when it does, the hit to a company’s bottom line can be deeply damaging. That’s especially true at a time when data is the economy’s new oil, fueling some of our most important business processes and informing some of our companies’ most consequential decisions. Even seemingly small data mistakes can have a massive impact – which is why businesses should embrace technological solutions that mitigate these errors and safeguard the bottom line.

A wide range of technologies can provide tailored solutions to specific areas of business need, including key marketing, finance, and IT processes. In a fast-moving world where businesses need up-to-the-minute, accurate data to make their most critical decisions, these solutions can mean the difference between building a formidable competitive advantage or being left in the dust.

The Scope of the Problem

By 2016, bad data cost businesses in the U.S. alone a staggering $3.1 trillion per year, according to an IBM estimate. That figure underscores that for all the talk of big data – and the billions being poured into it – businesses face substantial risks if they aren’t equipped with the tools and capabilities necessary to ensure that all that data is up to snuff.

The problem hasn’t caught business leaders unawares: An Experian survey found that no fewer than 95% have seen poor quality data undermine their businesses’ performance. And human error is among the leading culprits behind data problems. From customer data security lapses to system failures, fallible humans have triggered an array of both PR and balance-sheet crises for businesses large and small alike.

Beyond the business world, data errors can have serious consequences for society. Take the spreadsheet error that caused authorities in the U.K. to temporarily miss nearly 16,000 positive COVID-19 cases, complicating contact tracing and virus mitigation efforts. With both livelihoods and lives on the line, how can organizations improve the accuracy and the reliability of the data that makes the modern economy run?

The Role of Technology

The answer lies in technological tools designed to verify data quality and save businesses precious time and money otherwise devoted to manual data manipulations.

These include data analytics and forecasting tools, robotic process automation, cloud and SaaS platforms, and artificial intelligence-driven technologies. Automated solutions are especially effective at minimizing data errors: AI technology, for instance, does not tire from repeated data analysis or require breaks between tasks. Armed with AI tools, businesses can better protect data consistency and catch input errors before they cause serious harm to the bottom line.

The gains from these tools extend even further. Automation supports higher productivity, for example, by freeing up time for employees to focus on more complex and intellectually challenging tasks, reducing the need to invest substantial time and financial resources in tasks like manual data entry. A wide swath of industries and functions stand to benefit, including finance, marketing, sales, administrative management, and much more. These fields still need the creativity, experience, discernment, and knowledge that human professionals can provide – but they don’t need to rely on error-prone employees to handle tasks that AI systems can handle perfectly well.

Embracing the Future

Trial and error is an essential part of innovation. The history of business and technology is one of many a successful visionary who went through multiple unsuccessful iterations of a big idea before finally striking gold. But while it’s perfectly normal and even healthy to err from time to time, the stakes are too high when it comes to something as fundamental as data.

That’s where automation comes in – helping companies eliminate costly errors, improve productivity, and devote more of their organizational resources to innovative projects. Far from being a threat to human employment, such automation will be a boon to jobs, by supporting new value creation and business expansion.

Of course, it’s essential for businesses to be mindful of where technologies are still in their nascent stages and to ensure proper manual involvement and oversight of automated tools. Technology is only as good as the code with which it’s programmed – and before new technologies are implemented, it’s vital to understand its ins and outs and to verify that it is indeed capable of meeting the organization’s needs. Once businesses have crossed their t’s and dotted their i’s, they can unleash the power of automation to vault them to new heights of success.

Didi Gurfinkel is the CEO of DataRails.