Another Calculation Method - The 1 - 10 - 100 Method
I have previously described the 1-in 10 rule. In the article “The real Cost of Bad Data” it is described how industry analysts had made the 1-10-100 Method.
The average cost of correct entered contact information into the master database cost
$1 is includes data validation solutions, wages for the employee and cost of computer equipment.
If you do the adress validation and de-dupication after the the submission of data in a batch cleansing, the average cost per entry is $10.
With the commonly used Laissez-Faire solution (doing nothing) the cost is greater than $100 per record.
It is also stated in the the article that up to 20% of the contact data is wrong when it is
saved.
A quick calculation. You have 100.000 records with 5% incorrect data. Then the bad
data costs you 100.000 x 0,05 x 100: $500.000 or 2.500.000 DKK
Time to end Laissez-Faire!
Filed under: Cost of Poor Data Quality, Tips to improve Return of Investment (ROI) | Tagged: Calculation Method, Poor Data, ROI
Appreciated if you could help me on explanation of 1:10:100 rule of quality or through suggesting a good/easy reference (book).