Today’s guest post is written by Michael Sebastian who is the chief information officer (CIO) at SourceCheck, a fraud prevention data aggregator and specialty analytics firm. Before joining SourceCheck Mike was the CIO at TDIndustries; he was also a director of information services at the San Diego Sheriff’s department, a consultant at Arthur Andersen, and a developer at AT&T Systems.
Information is perhaps a collection agency’s most valuable operational and strategic asset. Bad or ‘dirty’ data is a significant problem in industry. Improving the quality of an agency’s data is important, not difficult, and will return significant dividends. Focus on business results and partner with people who can help you succeed.
Working in the collection business in this economy isn’t easy. There is more demand for your services but fewer people are paying on their debts. Add the impending holidays, and well, time isn’t your friend. You need quick results. The success equation has changed; reach significantly more people to collect the same amount of money. Do you increase staff or improve efficiencies?
Hectic schedules sometimes prevent us from seeing the obvious, like one of your most valuable assets – your data. Information is the lifeblood of the collection business – “accurate” information.” So how good is your information? If the experts are correct, your business may be subsisting on a diet of missing, incomplete and otherwise bad data. The Data Warehousing Institute (DWI) estimates the cost of bad or ‘dirty’ data exceeds $600 billion annually. Another study indicates that 2% of contact records become obsolete each month, costing a firm 15-20 % of its operating income. The actual cost of bad data may never be known, but it’s safe to say the cost is significant enough to warrant your attention.
Ignoring the data problem is a poor business strategy. First recognize that bad data is a ‘business problem,’ and one that you can tackle – regardless of your technical deficiencies. Smart collection professionals approach technical projects with a business focus. There are plenty of technical people who can help you get to your business goal. It is critical that you do not get immersed in technical discussions if you are responsible for business results. So with your business hat firmly in place, consider the following suggestions for improving your data:
Make Improving Your Data a High Priority: Do your employees and data providers know the importance of your data? If you aren’t serious about your information, they probably won’t take it seriously either. Look at your data as the raw material you use to run your business, and insist on using the best you can afford.
Business Focus: Bad data is a business problem, so be aware of your conversations with we technical people. And be concerned if you’re asking for the time and a (external or internal) technical person insists on telling you how to make a clock. I am amazed at how very smart business people treat technology-related problems as somehow different. We in the technical world can get immersed in computer jargon, endless acronyms, special handshakes, etc.; keep the conversation on business outcomes. Ask a lot of seemingly naïve questions. If your technical services provider insists on giving you technical answers, speak with a supervisor or find another data provider.
Establish Data Accuracy Metrics: Don’t need to spend a lot of time or money on complex measurement systems. But have system or process in place that allows you to easily understand the quality of your data. This could be as simple as asking employees at a team meeting. What is their estimate of correct addresses or phone numbers, is it 80%, 50%, 20%? Who in your organization answer this important question?
Partner to Succeed: A data provider who isn’t willing to take some risk has very little incentive to dig into the issues with you. Anyone can sell data; you need someone who can help you see the big picture. Try developing business relationships that makes sense for you and your data provider. Is there a way that your data provider can offer guarantees on their quality, perhaps base his fee on your increase in collections? This could help both you, you recover more money and your supplier’s commission increases. Simple equation:
Better Information = More Collections = Higher Provider Fee
This might not always be possible but always worth a discussion. You might ask why a data provider wouldn’t consider such a potentially lucrative agreement.
Above all else, remember that technical problems must tie to business results, otherwise why are you doing them – right? Don’t get sidetracked by protracted technical discussions that waste valuable time and don’t add to your bottom line. In this economy you need every advantage you can find. Information is your raw material; make sure you’re using the best you can afford. And partnering with competent and dedicated data providers could mean the difference between surviving and thriving.
