Data quality. Your secret weapon for managing Africa’s downturn

May 7th, 2024

South Africa may be Africa’s leading economy again, but don’t let that fool you. Global instability and tough economic measures are creating a tough environment for businesses across the continent. The natural reaction might be to batten down the hatches and cut costs, but what if the smartest move is to invest?

The herd instinct can hurt

While everyone else is retrenching, data-driven businesses are thriving.

A McKinsey study shows companies that invested during downturns increased profits by 10% while their peers lost 15%. The key? They used real-time, high-quality data to understand their business better.

Think of it this way. With African consumers facing tighter budgets and changing risk profiles, your business needs to be sharper than ever. Here’s how data quality can help you navigate the storm:

Understanding your customers (especially now)

African consumers are feeling the pinch. Their spending power is down, and their risk profiles are changing. Businesses that rely on gut instinct will struggle. But with high-quality data, you can:

  • Improve customer experience: Accurate and complete customer profiles are key to understand your customers better and delivering experiences that keep them coming back.
  • Personalize marketing: Targeted offers that add real value will keep existing customers loyal, and attract new customers from less innovative competitors.
  • Assess credit risk accurately: Accurate customer profiles can feed credit and regulatory risk models to more accurately predict behaviour and risk. South Africa’s African Bank was bankrupted due, in part, to an over reliance on mine workers in their customer base – many of whom lost their jobs due to disruption to the mining sector. At the same time, competitor Capitec grew profits. One of the differentiators was a different attitude to risk.

Data quality: Your path to efficiency and growth

Bad data costs businesses millions. Good data saves millions. Here’s how:

  • Predict the downturn’s severity: Quality data can help business leaders to predict the severity of the downturn, as well as to intelligently plan how to deal with current staff. While it can be tempting to retrench to save costs, this may be against your interests. After COVID, for example, many businesses that retrenched staff found themselves scrambling to rehire or onboard and train new staff when the predicted recession lasted for only a few months
  • Reduce costs: Eliminate bad data’s hidden costs (Gartner estimates an average corporate cost of $12.9 million annually!). Automate tasks with reliable data, freeing up staff for higher-value activities and ensuring a direct, sustainable boost to profits.
  • Increase Efficiency: Automate tasks with reliable data, freeing up staff for more strategic work. One customer cut their client onboarding time by 80% by improving data validation and checks at the point of capture! This resulted in a significant ongoing cost saving and also helped them to close more business due to a better customer experience.

Turning downturns into opportunities

A downturn can be an unexpected ally for data quality initiatives. With capital projects on hold, IT and business teams have more breathing room to tackle data issues. The goal of a data quality assurance program should be to ensure that data issues do not reoccur.

Here’s your action plan:

  • Identify and address data quality problems: Data quality assessments quantify known data quality issues and uncover hidden problems that may be cutting into your profits. This means that you can prioritise data quality initiatives to maximise positive business impact, while managing overall expectations.
  • Implement data quality checks: Check may include data quality dashboards and exception reports used to power manual cleansing efforts, as well as data validation and enrichment processes to stop bad data from contaminating your systems.
  • Utilize data cleansing tools and techniques: Automation can help you to deliver sustainable data quality solutions at scale, saving on rework and ensuring ongoing benefits.
  • Train your staff on data hygiene best practices: Data Quality training can help to change your data culture to prioritise quality over quantity, saving rework and reducing costly errors that affect down stream operations and decision making.

Remember that high quality data does not mean perfect. Yet, with studies by Dr Thomas Redman et al showing that only 3% of data meets basic data quality standards, most companies can quickly make significant improvements to critical data.

Manage risk proactively: Invest in your future, today

By investing in data quality, you’ll gain valuable insights that will help you:

  • Make better decisions
  • Strengthen customer relationships
  • Boost efficiency
  • Reduce costs
  • Manage Risks
  • Drive growth

Even in challenging times, high-quality data is your secret weapon for success. Don’t wait for the storm to pass. Start investing in your data today.

Click here to visit Master Data Management.