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How the pandemic has accelerated digital decay

Written by Chris Hyde, Global Head of Data Solutions, Validity

There is a strong belief that data decay has increased as a result of the pandemic. Indeed, as many as 79 percent of customer relationship management (CRM) users agree according to The State of CRM Data Health in 2022. Undoubtedly, low-quality data is often a silent killer for businesses— particularly those that are still recovering from the impact of COVID-19 and are now facing the cost-of-living crisis. As pressure to innovate ahead of competitors continues, it is important for organisations to prevent data quality issues from sabotaging new technology initiatives or campaigns before they leave the ground.

The consequences of data mismanagement

Organisations will find it challenging to make data-driven decisions if they do not have a solid, leadership-backed approach to data management in place. In fact, by not making data management a priority, many organisations enable unethical practices. According to the research, 75 percent of respondents admit that data is sometimes fabricated to tell the story they want decision makers to hear.

This sets an undesirable precedent for future employees and compromises the accuracy of key internal processes such as sales forecasting. This is essential, as 86 percent of respondents say their company’s sales forecasts are created using CRM data. Not only will fabricated data lead to inaccurate forecasts, but it also presents a range of other consequences for the organisation such as incorrect budgeting, insufficient working capital, and a loss of shareholder confidence.

Best practices for CRM stakeholders

Essentially, there are extreme costs which come from neglecting data and a variety of benefits for managing it well. Regardless of the industry, most companies will want to make better decisions for the business, and this is often achieved with sophisticated CRM data. With access to this, CRM users have the opportunity to take advantage of benefits that extend to all corners of the organisation.

When it comes to best practices, the first step is ensuring the leadership team are fully aware of how CRM data quality impacts the company as a whole. Once this is prioritised, it will be a lot easier to obtain the resources for the necessary organisational changes and investments. In addition, the team will benefit from appointing a full-time guardian of the CRM data. Due to the sheer volume and velocity of data flowing into most systems, it makes sense for this to be a full-time responsibility.

According to the study, many companies lack a clear data governance plan. For example, 21 percent of respondents believe managing CRM data is the responsibility of a cross-functional team, and 17 percent think it is the responsibility of a single person or department. Although many believe the CRM is primarily for sales teams, its reach, impact, and utility extend far beyond that. Therefore, organisations should look to create cross-functional integrated data management teams which consist of sales, marketing, operations, and IT professionals.

It is expected that organisations will continue to rely on CRM data – especially if sales volumes increase, business relationships grow more complex, and consumer expectations for a personalised, frictionless experience continue to rise. Fortunately, for many organisations, their finances are recovering as they are realising the importance of investing in data, so budgets are being dedicated accordingly. This extra consideration will enable companies to appropriately manage their data and halt the decay instigated by the pandemic.