The Power and Perils of Data

At an excellent IDM Data Council evening event last month, Di Roach from DunnHumby gave an inspiring and entertaining talk about what can be achieved when data is used well. Iin this case it was Tesco with its highly effective Clubcard programme.

Data generated by Clubcard now underpins all Tesco business strategy, driving its awesome business performance. Tim Mason, marketing director at Tesco has said, “we could not run our business without Clubcard”, and, according to leading brokers JP Morgan Cazenove, “Clubcard data is responsible for Tesco’s emergence over the last decade as the dominant market player”.

Wow, fellow data professionals – we’ve arrived! Or have we?

Boards like Tesco’s are now nearly universal in recognising that they “must do data”. However, unlike Tesco’s, many organisations are clearly failing to do data well.
According to research published last week on by the Ponnemon Institute, a staggering 70 per cent of UK businesses have been hit by one or more data security breaches in the last year, compared to 60 per cent in the year before.

Many high-profile cases of data loss have been kept off the headlines by MPs’ expenses, swine flu and the recession. They will be back – the BBC reported just last week a leading bank receiving a £3 million fine from the FSA for three cases of data loss.

Such data breaches have created real concern amongst consumers about ID theft, which have probably fuelled their long standing frustrations about how their details can be used by marketers to make money, damage the environment via “junk” mail, and irritate them with irrelevant advertising messages at inconvenient times through more intrusive marketing channels including e-mail, phone or mobile.

The perils of poor data governance are clear in terms of increasingly substantial fines, significant brand damage and shortly the possibility of imprisonment for negligent or dishonest directors. Apalling data practice has now put regulators well and truly on the case.

Christopher Graham, the new Information Commissioner, will want to make his mark. The Walport Report currently in review has proposed that the Edited Electoral Roll, a key reference data set for marketers to improve data quality, is removed from use. In Germany following a major theft of data, legislators are in the process of forcing through mandatory opt in for all channels including mail. This new law could well be rolled out across Europe by the European Commission.

Together, such legislation, combined with consumer reluctance for their data to be used in marketing, could significantly reduce the opportunity for boards to use data as a key element of business strategy and consequently reduce its value as a core business asset.

At the IDM Data Council meeting before the DunnHumby session I was surprised and delighted to be invited by the IDM Data Council to take over as chairman from Iain Lovatt, who has done a terrific job over the last three years. I’ve long admired and supported the excellent work of the IDM developing people and driving best practice in the DM, data and digital industries.

The IDM Data Council comprises a group of talented and committed senior data professionals who freely give of their time to help raise standards in data. Under Iain it has played a major part helping to establish data as a priority at board level, recognised as a key business asset and driver of business performance.

My goal as the new chairman will be to build on this success and, with colleagues, continue to raise standards in data management so that the power of data can be unleashed over the long term. It’s an incredibly important time for the industry and I believe that it’s vital that we don’t delay, that we tackle the data perils head on, so that data’s true value can continue to be used to drive business performance.

Good news is that I’m confident that when done well, the power of data will drive Government, its regulators, businesses and their boards to realise, like Tesco, that data is crucial to business and general economic success.

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