3 Reasons Why Fragmented Customer Data is Worse Than No Data at All

Fragmented Data

According to a study by Dresner Advisory Services, a staggering 83% of businesses recognize the vital role that data plays in their strategy. It’s like the old adage of 4 out of 5 dentists recommending sugarless gum to their patients who chew gum. Who is that 5th dentist endorsing sugared gum, and who are these 17% of companies not using data to influence strategy? Anyway, I digress. At this point, data is a well known driver in business strategy, and proven to pay off when managed effectively.

But while the importance of data, especially customer data, is widely acknowledged, we often overlook the significance of its findability and completeness. Businesses everywhere – yes, even those in the aforementioned 83% – are struggling with what is most easily described as data fragmentation. And the resulting business strategies are (knowingly or unknowingly) strung together like a road trip planned on a 40-year-old atlas with missing pages.

Here’s three reasons (the tip of the iceberg, really) why your company’s fragmented customer data may be doing you more harm than good:

Reason 1: Misalignment of Efforts. The foremost problem with fragmented data is that it leads to a misalignment of efforts within your organization. When data is scattered across different departments or individuals, each party operates based on a limited understanding of the customer. This can result in chaos, with one team relying on metrics that suggest one user need while another team has data they believe suggests a different user need. It’s like having two chefs in the same kitchen cooking you a meal using completely different recipes.

Reason 2: Squandered Resources. A close second is the waste of valuable resources, both in terms of time and money. According to McKinsey & Company, employees spend an average of 1.8 hours per day searching for and gathering information. That amounts to more than a full work day per week burned “looking around”. Much of this wasted time is the direct result of fragmented or hard-to-find data. Do you realize how many needles there are just in your company’s customer data haystack!? Your frustrated employees do. The cost of this wasted time extends beyond monetary losses; it also impacts your speed to market and puts you at a significant competitive disadvantage.

Reason 3: Erosion of Trust. Fragmented data has another detrimental effect; it eventually erodes trust within your organization. It breeds doubt among team members. It can breed false confidence in others (when they think they have the data to prove their point). When the accuracy and completeness of the data cannot be trusted, decision-making becomes paralyzed or, even worse, a free-for-all of intuition and anecdotal evidence. “Making the best of it” is not a business strategy, of course, but the silos and black holes of today’s customer data management practices have us doing just that.

In today’s complex business environment, data-driven decision-making is crucial. And customer data is right at the center of this requirement. It is imperative that we find ways to obtain holistic views and insights. Fragmented data not only hampers efficiency, but it also impedes the growth of your organization. Complete data, greater knowledge, better decisions. It’s why Rutabaga is here.

Photo by Volodymyr Hryshchenko on Unsplash

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