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With data at the forefront of most business decisions, modern enterprises need a mature and effective data management program to address the complexities and challenges of managing data at scale. But how do businesses determine whether or not the program delivered real value? And how much can value can companies expect from these initiatives?
Even if you're following data management best practices and avoiding the cost of poor data quality, you might have yet to reach your data's maximum potential. Have you chosen the right tooling? Are the results what you were expecting? What are the appropriate expectations?
This blog post explores the quantifiable benefits of a mature data management program based on real-world examples and financial metrics that resonate with your organization's strategic goals. We'll cover the top benefits and their impact on your business. We'll assign real dollar values to all the facts so you can contrast them with the success of your initiatives.
Forrester TEI report
As research for this piece, and to better understand the real value we deliver to companies, Ataccama partnered with Forrester to provide a "Total Economic Impact" of our data management platform. This blog's statistics and data points are based on this commissioned report.
They surveyed 6 of our customers and used their feedback to create a composite organization. This organization generates around $20 billion in revenue and has around 8 million data records.
They then used this feedback to assess the benefits, costs, and risks of using our platform for a company that deploys on cloud infrastructure and rolls out data quality and MDM modules. Each customer experienced poor data quality issues and, after investing in Ataccama, gained access to reliable, consistent, and trusted enterprise data. The calculations are based on the success of this composite data management implementation three years later.
You can read the full report here.
Results of a successful data management program
Based on the analysis conducted by Forrester, a successful data management implementation can lead to some impressive overall benefits. Companies will experience increased speed and efficiency when accessing and using data to make decisions. Ultimately, this averages out to 4 key benefits. The report findings indicate that successful data management initiatives can create:
- $15.5 million in present value (PV) benefits
- Payback on investment in less than six months
- 348% return on investment over three years
- 12.07 in net present value
Forrester's "present value" factors in a 10% reduction to account for risk, while "net present value" is the present value after subtracting the program's costs.
5 financial benefits of a data management program
Now that we've established the high-level statistics, let's delve into the specifics of a successful data management investment and what you can expect from each individual benefit.
1. Avoiding homegrown solutions
Total expected impact: $7.7 million
Companies are often interested in building their data management solutions in-house. On the surface, this method may seem easier to initiate and tailor to your company's interests.
However, creating these solutions using your own resources can be labor-intensive and tie up several of your employees in maintenance efforts to keep the system running. By choosing a pre-built solution, companies cut down on operational costs and free up employees for work on more important projects, such as AI model development.
"A modern tool helps reduce expenses in data storage costs and people working on the system, and it enables us to troubleshoot flaws in our data."
MDM Product Owner, Insurance
You can also reduce expenditures on storage, servers, and mainframes that support your in-house tools. With a pre-built platform, you should be able to build data products more quickly, consolidating disparate data systems and democratizing access enterprise-wide.
Suppose you spent around $2.3 million annually operating your legacy homegrown solution. You could see that shrink year over year, by 60% in year 2 and 100% in year 3. Couple this with savings on yearly salary for around 15 full-time employees (FTE), and the impact is about $7.7 million.
2. Simplified, automated data management
Total expected impact: $2.9 million
Managing data requires several tasks that need to be performed regularly and effectively. Users must monitor data quality, maintain pipelines, resolve issues, prepare data, leverage it for projects and decision-making, and much more.
If your solution doesn't automate most of these capabilities, your progress will slow down, and you won't be getting the most out of your data. Performing most of these tasks manually isn't only more time-consuming, but can also yield less results than those performed by machine learning models.
Your solution should be able to match data sets more effectively than the human eye, recognize patterns in large volumes of data, and establish repeatable rules that will automatically apply to all users.
"About 25% to 33% of the data profiling team's time has been replaced by a push button. A lot of those efforts were redirected to value-add activities instead of operation data management activities."
Data Quality and Governance Senior Manager, Telecoms
With the right platform, you should reduce the time it takes your teams to perform mundane tasks like data profiling by up to 33% with the push of a button. This time savings can grow to 35% in year 2 and up to 40% in year 3. You can also rest assured that at least 50% of this time saved will be redirected toward productive work.
And it's not just for your data-oriented employees. Business employees spend around 25% of their time preparing data. You should see that number decrease by 25%, 50%, and 75% in years one, two, and three, respectively.
3. Reduced risk of mismanaged data
Total expected impact: $1.3 million
Poor data management leads to bad data quality, which has significant consequences for your organization. Businesses that fail to address data mismanagement can suffer financial losses, reputational damage, legal ramifications, and a long resolution process.
As companies recognize the impact of this data management malpractice, it becomes clear that handling data more effectively is a necessity. Organizations can experience monthly losses of $1 to $3 million and conflict with overarching regulations like the EU AI Act and the GDRP.
"Our cybersecurity officer is very happy because now he knows where our risks are. They know where to direct their efforts, and there could be issues that need to be remediated, like masking or encryption to protect private information."
Data Quality and Governance Senior Manager, Telecoms
If your data management solution is successful, you should be able to scan large numbers of databases for sensitive data like personal identifiable information (PII) to mitigate data breaches. Your solution should also provide improved compliance monitoring to carefully monitor for misalignments with laws and readily supply records when required by regulatory entities.
Suppose your company is experiencing a cost of around $6 million annually due to poor data management of multiple incidents. With the right platform, you could reduce that risk by 8% in year 1, 10% in year 2, and 12% in year 3, significantly weakening the blow when these incidents occur.
4. Customer 360 improves business outcomes
Total expected impact: $1.8 million
A Customer 360 offers a comprehensive view of all data an organization has collected about a particular customer. It relies heavily on MDM processes that consolidate customer data, help in disparate systems, match duplicates, and remove inaccurate data from a single source of truth or "golden record."
Having more reliable data about customers to work with leads to a personalized customer experience, improved customer service, reduced customer churn (fewer current customers leaving), and driving product development with customer insights in mind.
"Because we have this centralized view of our clients, we're able to consolidate the identity of our customers even if they have different user names across our five customer portals. MDM is connected directly to our systems to support identification."
VP of Global Client Experience, Financial Services
A successful MDM solution will provide marketing teams with better predictions of buyer behaviors, enhanced cross-sell conversion rates, improved retention, and improved overall marketing performance. In support, you'll improve the experience and reduce call volumes in contact centers.
Suppose you use this enhanced customer marketing tool to release more campaigns. You could expect five new campaigns in year 1, 10 in year 2, and 15 by year 3, with a 10% higher profit margin from the increased accuracy of data models. In your call centers, you should experience a drop in call volume from fewer portals and a reduced need for support by 0.9% in year 2 and 1.5% in year 3.
5. Streamlined systems migration and rationalization
Total expected impact: $1.9 million
Depending on the number of systems and locations where your company stores data, this can create substantial maintenance costs and lead to data quality issues such as duplicate records. MDM solutions offer a unified view of your customer records, which allows you to consolidate these systems, eliminate redundancies, and shrink maintenance costs to the necessities.
"We have five portals with different logins and passwords. We decreased the number of calls [to the call center] that were necessary to reset passwords."
VP of Global Client Experience, Financial Services
If your organization has a large number of online customer portals with different login credentials, you could find yourself in this situation. An effective MDM solution can streamline internal operational efforts, reduce entry to a single sign-on for each user, and replace several temporary privacy solutions.
Suppose you're a company maintaining several of these portals. You could need as many as 80 developers to keep them running. A successful solution could save these teams 15% of their time in year 2 and 25% in year three. But maintenance isn't the only expenditure. Licensing costs can also skyrocket when you have multiple portals using multiple login credentials. By decommissioning systems you don't need, you could achieve $1.4 million per year in savings, with 60% of that coming in year 2 and 100% in year 3.
Guarantee these results by selecting Ataccama
Now, you should have a better understanding of how valuable a data management program can really be when it reaches its full potential. Fortunately, you don't need to look far and wide for a data management solution that provides these results.
Forrester's survey is based on our customers. By choosing our platform, you can rest assured that you will experience a similar process and all of these benefits (if not more). Beyond these important values, there are also many unquantifiable benefits our customers experience from using our platform, including:
- Enhanced cross-functional collaboration.
- Improved customer experience.
- Better data quality to support business initiatives.
- Improved business continuity with knowledge retention.
Our platform is AI-enabled and geared toward providing companies with everything they need to succeed with their data management programs. Sign up for a demo today and download the full report to begin realizing your goals.
