With only 14% of UK businesses being aware of the fines they will face for failing to protect data under GDPR, the next six months or so will witness a collective panic as organisations rush to become compliant.
The third post in our GDPR series argues that the myopic approach of focusing only on penalties and compliance costs misses the point completely. GDPR imposed improvements in your approach to data governance provide your organisation with major opportunities for deriving tangible business benefits by adopting a more strategic approach to data management and data use (see the advice provided in Post 2 of this series – Ensuring Compliance).
Early movers will stand to gain most.
Innovative, forward looking organisations should regard GDPR compliance as an investment for the future NOT another burden to bear. Adopting a strategic approach will ensure that your data management processes and policies are ‘fit-for-purpose’ in a data driven digital world.
The discussion around GDPR needs to move from the ‘stick’ to the ‘carrot’. By adopting a more positive, strategic mindset, organisations can benefit enormously from GDPR imposed changes to data governance. As one author puts it, a strategic approach can move us from Gloom, Doom, Panic and Retribution to Great Data supporting more Personal customer Relationships (The Three Big Benefits of GDPR).
To understand the potential business benefits your organisation can derive from GDPR, it is important to take a step back and understand why the new directive is being introduced in the first place.
Why is GDPR being introduced?
To date, the protection of personal data has dominated discussions around GDPR. There is, however, another equally, if not more important, aspect.
The digital economy is a data driven economy. Variously described as the raw material or oil of the 21st century, data driven business models are critical to the future competitiveness of EU business and to the efficient, cost effective management of our public services.
How organisations manage the growing volume of data at their disposal has become mission critical. There needs to be a mutually beneficial relationship between organisations and their customers. Organisations benefit from data driven innovation. Customers benefit from personalised products and services based on the actionable insight derived from Personally Identifiable Information (PII). For customers to willingly provide this information, they need to be convinced that their PII is secure, protected, risk free and being used only for the purposes intended.
Leveraging the full potential of this mutually beneficial relationship is the ultimate driving force underpinning GDPR. The overall aim is to create an environment for the safe, strategic use of data allowing European businesses and public sector organisations to derive a wide range of benefits as outlined below; while at the same time providing assurance to customers.
Poor data quality is a barrier
While the new directive should provide the required assurance at the customer end, poor data quality will prevent most organisations from implementing innovative, data driven business strategies.
A large body of research evidence exists highlighting the massive costs associated with poor data management. A recent study by Experian concluded that inaccurate data had a direct impact on the bottom line of 88 per cent of the organisations surveyed, with the average business losing 12 per cent of its revenue from poor data quality. The main ‘wasters’ being wasted marketing spend, wasted resources and wasted staff time.
The hidden costs of poor data quality may be even higher in terms of poor customer service, reputation damage and customer attrition. A February 2017 study by Royal Mail Data Services concluded that the majority of UK organisations still operate with poor quality customer contact data; costing the average organisation 6 per cent of annual revenue. Ninety-one per cent of those surveyed stated that their organisation was ‘plagued with data quality issues’ with 20 per cent of customers being lost annually due to poor data.
Across the Atlantic, a Harvard Business Review paper from September 2016, quoting research from IBM, estimated that poor quality data was costing the US economy a staggering $3.1 trillion per year.
Unless organisations act now by implementing a robust data quality management strategy, GDPR will significantly reduce the amount of usable, permissioned customer information at their disposal.
In the absence of significant progress in this area, data could become the asbestos rather than the oil of the 21st century.
With constantly connected customers and IoT connected devices generating an increasing volume of big data, developing and implementing a data quality management strategy has become critical to success in the digital economy.
Ten key business benefits
Complying with GDPR may be viewed as a ‘pain’ for your organisation, something you could well do without on top of everything else you have to deal. But it also presents a major opportunity for building sustained customer and competitive advantage, done properly and moving early.
Implementing a strategic approach to data quality management and GDPR compliance can deliver a wide range of business benefits as summarised below:
The bottom line is that clean, reliable, secure data providing a single view of the customer = business success.
As usual, all comments and feedback on this post are very welcome.
Please do not hesitate to contact us if you would like an informal chat about your responsibilities under GDPR or the implementation of a data quality management strategy for your organisation.
Posts 1 and 2 in this series can be found here: