Quantifying the Cost of Bad Data

Bad data has a measurable cost. The calculation: decision error rate multiplied by the cost of each error. If 8% of pipeline records have inaccurate deal values, and those inaccuracies cause the forecast to miss by $200K per quarter, the cost of bad data in the pipeline is $800K per year. If 12% of customer records have stale contact information, and each stale record costs one hour of sales time to verify, the cost is the hourly rate times the affected records. These are not abstract calculations. They are the business case for investing in data quality. The CFO does not fund "data hygiene projects." The CFO funds "$800K annual forecast improvement projects." Frame the investment in terms of the cost it eliminates.