Don't just comply: Prevent

by Larry English, Information Impact International

Missing, inaccurate and misleading information affects not only businesses – it affects society. Laws have sprung up to protect consumers, who pay the price for poor quality information in the form of higher costs of goods and services, higher taxes, inconvenience and wasted time, even injury and death.

Business regulation is intended to protect citizens. But the question is this: Does regulation bring about real improvement? Or does it merely create a minimal "compliance" that satisfies the letter of the law without addressing the true causes?

Why 'compliance-only' fails
If legislation alone produced optimum compliance results, there would be few fines for noncompliance and few complaints from consumers. Unfortunately, that is not the case.

Sarbanes-Oxley is causing organizations to invest heavily in audit processes. However, companies that do not address problems within the information-gathering process are simply adding audit costs without solving the root cause of the problem.

Most organizations rise to meet the letter of the law. However, after-the-fact data inspections actually cost more than implementing proactive process improvement that eliminates the causes of defective information.

The real 'solution'
World-class organizations use regulatory action – or even threatened action – as an opportunity to attack the root causes of poor quality information, and design quality into processes that create and update information. This prevents both internal failure (costs of scrap and rework, data correction, etc.) as well as external failure (noncompliance and customer alienation).

World-class organizations know the four fundamentals of quality: Adopt a strong customer focus; adopt a habit of information process improvement; implement information quality management software that automates information quality processes; and implement training, management accountability and culture change to make information quality part of the enterprise values.

Six benefits of proactive thinking
Remember, poor-quality information harms consumers and leads to government intervention. But organizations that take steps to improve information quality realize six significant benefits. These companies:

1. Reduce costs of process failure and information scrap and rework caused by defective information.
2. Increase satisfaction among employees, who no longer have to hunt and chase, correct or work around defective information.
3. Enhance customer satisfaction by lowering the cost of goods, eliminating order errors, duplicate catalogs and inaccurate bills.
4. Increase profits by enhancing the lifetime value of happy customers.
5. Increase shareholder value, adding profits by cutting the costs of information scrap and rework.
6. Decrease the risk of noncompliance – and potential fines and imprisonment – by improving and controlling processes at the source to error-proof and prevent defective information.

In the end, companies that implement proactive process improvements to eliminate defects that harm consumers gain more than companies that merely comply with the letter of the law. The result? Happier customers, employees, stockholders – and regulators.

Bio: Larry English, president and principal of Information Impact International, is an authority on information management and information quality. English writes the "Plain English about Information Quality" column in DM Review magazine and has authored Improving Data Warehouse and Business Information Quality. English can be reached at Larry.English@infoimpact.com.