Click here to close now.




















Welcome!

Industrial IoT Authors: Tim Hinds, Ian Khan, Cloud Best Practices Network, Patrick Hubbard, Kaazing Blog

Related Topics: Microservices Expo, Industrial IoT

Microservices Expo: Article

$3 Trillion Problem: Three Best Practices for Today's Dirty Data Pandemic

Maybe your software is healthy, but is your data terminally ill?

In survey after survey, about half of IT executives consistently agree that data quality and data consistency is one of the biggest roadblocks to them getting full value from their data.

This has been consistently true all since the Chinese invented the abacus. I suspect it will be true long after quantum computing has solved every other problem that humanity faces.

 

Incorrect, inconsistent, fraudulent and redundant data cost the U.S. economy over $3 Trillion a year - an astounding figure that is over twice the amount of the 2011 Federal Deficit.

Similarly, many experts estimate that HALF the money spent on developers goes towards "software repair". So we're living in a world of sick software and dirty data. And the cost of all this is staggering.

 

I've long been a proponent of healthy software - but healthy software can only function properly in the presence of healthy data. Does quality software even matter if the underlying data are defective? Agreed - that's pushing the point to the extreme.

The rapid, iterative, continuous testing model has measurably improved the quality of software development. Evangelists such as Kent Beck have had a huge impact on this. I recently posted a freely downloadable white paper on this topic. But where are the evangelists for data quality? Where is an open source "JUnit for Data" and if it's out there, why isn't everyone using it?

The Cost of Bad Data
Anyone care to make a guess at how much money is wasted every year due to dirty or duplicate / redundant data? I'll start by presenting one common user story - one you probably have also recently experienced. And then expand on it.

Recently, I went to my mailbox and waiting for me was yet another invitation from a major bank to join their credit card program.

This shouldn't come as a surprise, as people everywhere are deluged by credit card offers. Except that I already have the particular card in question. Not only that, but because the particular bank in question has managed to acquire a number of other banks and credit card lines of business, between my personal and my corporation, I believe I now have five Visa cards from this particular bank.

I also occasionally get mail from them offering me cash bonuses to open up a checking account at their bank. Probably wasted postage, as I already have two checking accounts there. I suppose I could open up a third, just to get the $100.

Every month, I get a significant number of expensive looking direct mail offers from this bank, often with slightly different variations on my name, which I promptly throw away. Aside from the impact on the environment and the wasted direct mail expense, it's a bit irritating to me. I hate junk mail, and I feel compelled to shred things like credit card offers. So they've burdened me (an existing customer) with yet another "thing to do". So they've spent money, hurt the environment, irritated an existing customer, and now I get to make fun of them online. Bad investment on their part.

QAS (an Experian company) estimates that the average company wastes $180,000 per year simply on direct mail that does not reach the intended recipient because of inaccurate data. But this is just one miniscule slice of the data quality issue. In fact it's only one small part of the "direct mail" data quality issue. A lot more money is wasted in "inappropriate offers" and "duplicate offers" such as the ones my bank sends. I also get offers from several companies that are convinced that I'm married to the previous owner of my house. Those offers reach me, yet are immediately shredded. No sense opening them. So the "big picture" just for direct mail is much larger than what QAS shows.

None of this accounts for the "irritation" factor - what is the cost of annoying existing customers (or potential customers) with badly targeted offers?

Yet direct mail and all other forms of advertising together add up to a tiny slice of the bad-data pie.

Fraud Is a Bad Data Problem
Some time back, the US Attorney General's office stated that they believed that 14 percent of health care dollars are wasted in fraud or inaccurate billing.

Why do I lump fraud in with "bad data"? Bad data comes in two forms - accidentally created bad data and intentionally created bad data (for example, fraudulent billing). Either way, it's bad data. It doesn't matter how it got there, it's defective. And a lot of it could be detected and remediated "at the point of entry".

Healthcare accounts for over 16% of the U.S. GDP (Canada is 10%, Australia is 9% as a comparison). The U.S. GDP is currently approximately $14 Trillion - therefore healthcare spending in the U.S. amounts to $2.25 trillion. And the cost of bad data in Healthcare- $314 Billion.

That's just for fraud or inaccurate billing. What about other areas in healthcare (e.g. lost data, "bad patient outcomes", duplicate patient testing, manual rework, etc.)?  Even if we round down, we're still taking about $500 Billion for one industry alone.  If I extrapolate that out to the entire U.S. economy, we're talking about a $3.1 Trillion problem.  No matter how far off my estimate is (on the high side or the low side), it's a problem of astonishing proportions.

Cost of Bad Data to Business and IT
A classic but very worthwhile book from information governance expert Larry English posits that the business cost of nonquality data may be as high as 10-25% of an organization's revenue, and that as much as 50% of the typical IT budget may be spent in "information scrap and rework".  If that is the case, then my $3.1 estimate is not out of line.

In the introduction to his book, English states "With this proliferation of information, the challenge of managing data and providing quality information has never been more important or complex."

That was in 1999. With so much more data today, and a surprising lack of attention to the data quality issue, I can only imagine the total economic impact of things today. I do not doubt that the cost of bad data has risen.

Dealing with bad data at the I.T. level is expensive. But if I.T. doesn't deal with the bad data problem, then the cost gets pushed downstream to the "business", where the business costs are geometrically higher. The model is not that different from that of "healthy software", where it costs $1 to uncover a defect during developer/unit testing, but $100 to fix that defect if the software is released to the end-users.

"Low Hanging Fruit" - Best Practices for Bad Data Avoidance
I am not saying that there are any easy fixes to the bad data problem. Even something as relatively simple as cleaning, standardizing and de-duping a mailing list with 10,000,000 entries is essentially impossible to get completely right no matter how much effort is put into it. Yet there are some relatively easy things that can be done to substantially improve the quality of our data.  As with so many other problems in life, the some version of the 80/20 rule applies to this as well.

Best Practice #1: When integrating data, fix the quality problem during integration
As data are added or integrated, data should be tested. Profiling is a simple, fast, relatively easily implemented and highly effective way for eliminating significant volumes of defective data.

When developers write a new application for the input of some new data, it's normal for input fields to be "validated" - a simple "hard coded" form of profiling. Month number needs to be between 1-12. 13 is never correct.  Not rocket science. And it's universally done.

Yet people have far fewer reservations about integrating data from here, there and everywhere - often not checking for even the most egregious data errors, and thereby polluting the organizational drinking water (i.e. all the data and applications downstream).

I strongly suspect that's why I get so many offers from my current mega-bank. Since the banking implosion, this particular bank has purchased every other bank around. And their credit card businesses. And their marketing databases. And (apparently) smashed them together. So I get offers for Hollis Tibbetts, Hollis W. Tibbetts, Hollis Winslow Tibbetts, Hollis Tibbets, Hollis Tibbitts and so on.

Integration of data isn't necessarily just a "big bang" event - like when one company acquires another and smashes all the data together, or when two divisional customer applications get merged. It can be more insidious and more when you have "trickle" integration - the slow feed of new data from one system into another (either within the organization or from customers/suppliers/partners).  This is the class of integration that is causing a lot of the problems previously discussed with healthcare fraud.

Either way, FIX IT before integrating it. Once the poison enters the corporate drinking water, it's a lot harder to get out (not just technically, but especially politically/organizationally).

Best Practice #2: When migrating data, fix the data problem as PART of the migration project
Spending $1 billion to upgrade your Seibel system like the US Government is doing? Sounds like a great time to fix your data quality problem.

If you're doing something like migrating your customer data from Seibel to Netsuite or Salesforce.com, data quality should be a major element in your project plan (and budget). Fixing the problems during the migration are easier than fixing them later:

  1. You probably already possess a lot of knowledge about the existing legacy systems, the types of problems in the data. But your new system is relatively unknown to you. So it's likely to be easier to fix data issues from a technical perspective BEFORE they get loaded into the new system.
  2. As part of the data migration process, you can export the data to a staging platform (On Prem or Cloud), leverage any number of data quality tools/engines, and then import the data into the the application platform.  This approach may partially pay for itself in an easier/smoother upgrade to the new application, but that's a rounding error in the overall scheme of things.
  3. Organizationally and politically, companies are much more likely to spend money to clean data if it's part of a project like "upgrade the CRM system". I'd hate to be the CIO that spends a mountain of money to upgrade the CRM system and then goes back to the board asking for another mountain of money to fix all the bad data that just got loaded into the CRM system. That's how CIO's become ex-CIOs.

Best Practice #3: Data profiling and data de-duplication engines
Data profiling engines are a great technology for quickly improving the quality of data as it is integrated from one system into another. At the highest level, they are an engine that scans data, and applies certain easily definable rules to data elements, such as formats, ranges, allowable values and can evaluate relationships between different fields.

Furthermore, these engines can also be used to analyze existing data stores very rapidly and generate "exceptions files" for manual, or semi-automated remediation (if anyone can find a totally automated data remediation system, I'd love to know about it). So they can be used in "continuous testing" or "batch testing" mode.  In batch mode, they're ideal for application migrations or big-bang integrations, as they're easiest to use them if you have your data in something like a staging database.  But they can also be used to test data as it is "trickle integrated" into production systems.

De-duping engines generally fit into the same category. I haven't seen them be as effective as data profiling engines, yet I believe they're essential. The technology for de-duping is considerably more sophisticated - with a large number of different algorithms and tunable thresholds and such. It's a harder class of technology to implement. More manual effort is involved. And, unlike profiling (where there is NEVER a month "13"), de-duping can "get it wrong", so the technology needs to be applied more selectively.

Conclusion
I've never understood why these engines haven't been more popular. There is no "JUnit for data" as far as I know. But commercial solutions are available - they're not terribly expensive and rapidly pay for themselves.

On the other hand, I've never understood why organizations are so tolerant of bad, dirty data. They waste millions and millions directly because of it (and untold quantities of money in "wasted opportunities"), but are reluctant to spend $15,000 on a data quality engine to help fix a significant portion of the problem.

More Stories By Hollis Tibbetts

Hollis Tibbetts, or @SoftwareHollis as his 50,000+ followers know him on Twitter, is listed on various “top 100 expert lists” for a variety of topics – ranging from Cloud to Technology Marketing, Hollis is by day Evangelist & Software Technology Director at Dell Software. By night and weekends he is a commentator, speaker and all-round communicator about Software, Data and Cloud in their myriad aspects. You can also reach Hollis on LinkedIn – linkedin.com/in/SoftwareHollis. His latest online venture is OnlineBackupNews - a free reference site to help organizations protect their data, applications and systems from threats. Every year IT Downtime Costs $26.5 Billion In Lost Revenue. Even with such high costs, 56% of enterprises in North America and 30% in Europe don’t have a good disaster recovery plan. Online Backup News aims to make sure you all have the news and tips needed to keep your IT Costs down and your information safe by providing best practices, technology insights, strategies, real-world examples and various tips and techniques from a variety of industry experts.

Hollis is a regularly featured blogger at ebizQ, a venue focused on enterprise technologies, with over 100,000 subscribers. He is also an author on Social Media Today "The World's Best Thinkers on Social Media", and maintains a blog focused on protecting data: Online Backup News.
He tweets actively as @SoftwareHollis

Additional information is available at HollisTibbetts.com

All opinions expressed in the author's articles are his own personal opinions vs. those of his employer.

@ThingsExpo Stories
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of streaming data in the cloud with an enterprise grade SLA. It features built-in integration with Azur...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
With the proliferation of connected devices underpinning new Internet of Things systems, Brandon Schulz, Director of Luxoft IoT – Retail, will be looking at the transformation of the retail customer experience in brick and mortar stores in his session at @ThingsExpo. Questions he will address include: Will beacons drop to the wayside like QR codes, or be a proximity-based profit driver? How will the customer experience change in stores of all types when everything can be instrumented and analyzed? As an area of investment, how might a retail company move towards an innovation methodolo...
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Treloar, President and COO of Bebaio, will explore examples of brands transforming their businesses by t...
A producer of the first smartphones and tablets, presenter Lee M. Williams will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. In his session at @ThingsExpo, Lee Williams, COO of ETwater, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater.
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer,...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevOps to advance innovation and increase agility. Specializing in designing, imple...
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes about through a Communications Platform as a Service which allows for messaging, screen sharing, video...
SYS-CON Events announced today that IceWarp will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IceWarp, the leader of cloud and on-premise messaging, delivers secured email, chat, documents, conferencing and collaboration to today's mobile workforce, all in one unified interface
The Internet of Things (IoT) is about the digitization of physical assets including sensors, devices, machines, gateways, and the network. It creates possibilities for significant value creation and new revenue generating business models via data democratization and ubiquitous analytics across IoT networks. The explosion of data in all forms in IoT requires a more robust and broader lens in order to enable smarter timely actions and better outcomes. Business operations become the key driver of IoT applications and projects. Business operations, IT, and data scientists need advanced analytics t...
Akana has announced the availability of the new Akana Healthcare Solution. The API-driven solution helps healthcare organizations accelerate their transition to being secure, digitally interoperable businesses. It leverages the Health Level Seven International Fast Healthcare Interoperability Resources (HL7 FHIR) standard to enable broader business use of medical data. Akana developed the Healthcare Solution in response to healthcare businesses that want to increase electronic, multi-device access to health records while reducing operating costs and complying with government regulations.
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducted a live demonstration of how quickly application development can happen when the need to comply wit...
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Architect for the Internet of Things and Intelligent Systems, described how to revolutionize your archit...
MuleSoft has announced the findings of its 2015 Connectivity Benchmark Report on the adoption and business impact of APIs. The findings suggest traditional businesses are quickly evolving into "composable enterprises" built out of hundreds of connected software services, applications and devices. Most are embracing the Internet of Things (IoT) and microservices technologies like Docker. A majority are integrating wearables, like smart watches, and more than half plan to generate revenue with APIs within the next year.
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Opening Keynote at 16th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, d...