Data Quality Market Growing

By eweek  |  Posted 2003-12-01 Print this article Print

The Data Warehousing Institute, an industry trade group, last year estimated that poor data cost U.S. businesses $600 billion annually in wasted postage and marketing costs as well as lost customer credibility. In contrast, the market for data-quality software is estimated to reach $600 million this year, according to the Giga Information Group, a division of Forrester Research.

Analysts expect spending to increase. Companies, they say, want to maximize their investments in software that handles customer interactions and data warehousing.

On top of that, federal laws are forcing organizations to clean up. The Data Quality Act, which took effect in 2002, requires, among other things, that federal agencies disseminate correct information. Other measures, such as the Sarbanes-Oxley Act established by Congress to address corporate fraud, put the burden of maintaining and protecting accurate data on companies and public agencies. Meta Group estimates that, over the next five years, the number of companies deploying data-quality software will grow by 20 to 30 percent each year.

Newcomers to data-quality technology admit that software packages are expensive—with entry prices ranging from $75,000 to $200,000—and can be complicated to use and deploy. Nonetheless, the software delivers the expected payoff.

Online travel site Travelocity, for example, has saved "a huge amount of money—many, many thousands of dollars," says software developer Carl Nicol. Travelocity implemented the real-time version of Firstlogics IQ Suite to determine whether customers requesting physical tickets have entered valid addresses to which overnight deliveries can be made by FedEx. "Before, the only way we knew an address was bad was when FedEx bounced the package back. Then we had to resend it, paying FedEx twice."

Executives at Diversified Business Communications using Group 1s data-quality software were able to cut outsourcing expenses. Until recently, says data services manager Pauline McNeil, Diversified used an outsourcer to organize and cleanse customer data—derived from subscription lists and trade-show sign-ups—before sending out direct-marketing mailings. "But every time we wanted to tweak the list, we had to pay the outsourcer up to $3,000 to re-run it and clean it," she says. "Considering that we do 15 or so mailings a year, that adds up." By cutting outsourcing costs, McNeil says, the Group 1 software will pay for itself in a couple of years.

But cost-cutting isnt the only benefit. Avoiding duplicate direct-marketing mailings not only saves money, it also improves customer confidence and satisfaction. Thats important to Save the Children, a non-profit relief organization using Ascential QualityStage software to clean up its million-record donor database. Sergio Bouscoulet, manager of operations, says the software has already spotted and corrected errors or duplications in 15 to 20 percent of the organizations donor records.

"Before, those would have resulted in duplicate mailings that carried non-tangible costs," says Bouscoulet. "Donors might get the perception that we werent making the best use of their money if they received two letters saying exactly the same thing. We certainly couldnt afford that." Next Page: Software market breakdown and summary.


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel