According to global credit bureau services provider Experian, which has just published its annual Global Data Management report, data debt stems from a lack of data understanding or poor legacy data management practices, often resulting in distrust in information - with the research revealing that two in five organisations say individuals within the business do not trust data insights - “but without this trust, businesses cannot harness the power of their data”.
Experian says organisations are starting to see poor data influencing their initiatives, with two-thirds of those surveyed saying a backlog of data debt negatively affecting new data initiatives, such as machine learning, AI or analytics.
“This means that many companies (33%) are not seeing the expected returns on the investments they are making,” says Experian.
The research reveals that despite the recognised challenges, three in four organisations (76%) currently have no strategy in place to address data debt issues - however the research does demonstrate growing awareness and motivation to mitigate data debt with 64% saying they plan to address it in due course.
Experian says that to overcome bad data debt, organisations must invest in data quality using a cross-team approach that breaks up siloes, warning that without data quality standards, checks, and processes to manage how data is captured, maintained, and leveraged, data debt will continue to accrue.
Michael Kilander, Global Managing Director, Data Quality, at Experian, said: “Over the last decade, it’s clear that data has increasingly become a critical asset in helping businesses thrive, and therefore, there’s a strong desire to harness the power of data and drive better customer and financial outcomes”.
“Unfortunately, a rising level of data debt and a data skills shortage are converging to make data insights harder to achieve.”
The research also found that the vast majority (85%) of businesses said data was one of their most valuable assets, and 36% said data literacy was crucial in order to future-proof the business.
And data literacy - described by Experian as the ability to read, work with, analyse, and form arguments with data - is seen by 84% of organisations as a core skill that all employees must have in the next five years. Thirty percent (30%) of those surveyed have a formal data literacy program in place and 36% say they are planning to establish one in the next year.
“Encouragingly, this year’s research highlights more businesses recognising these challenges and initiating the changes necessary to gain insights from their data,” says Kilander.
“For some, this starts with equipping their workforce with the necessary skills-set to be able to manage data. We recently launched a new version of Aperture Data Studio, our flagship data quality and enrichment platform, and have already seen great pick up.
“The tool is designed to support every type of user across a business to leverage the most consistent, accurate, and holistic views of data to successfully manage customer data projects with confidence.”
Kilander says that by creating a culture where sharing data knowledge and tools is the norm, these responsibilities can be distributed across a data-literate workforce, “freeing up valuable time for your data specialists to be truly innovative and drive success”.