Evaluating a model for cost-effective data quality management in a real-world CRM setting

a r t i c l e i n f o Keywords: Data quality Utility Cost–benefit analysis Data warehouse CRM Managing data resources at high quality is usually viewed as axiomatic. However, we suggest that, since the process of improving data quality should attempt to maximize economic benefits as well, high data quality is not necessarily economically-optimal. We demonstrate this argument by evaluating a microeconomic model that links the handling of data quality defects, such as outdated data and missing values, to economic outcomes: utility, cost, and net-benefit. The evaluation is set in the context of Customer Relationship Management (CRM) and uses large samples from a real-world data resource used for managing alumni relations. Within this context, our evaluation shows that all model parameters can be measured, and that all model-related assumptions are, largely, well supported. The evaluation confirms the assumption that the optimal quality level, in terms of maximizing net-benefits, is not necessarily the highest possible. Further, the evaluation process contributes some important insights for revising current data acquisition and maintenance policies. Maintaining data resources at a high quality level is a critical task in managing organizational information systems (IS). Data quality (DQ) significantly affects IS adoption and the success of data utilization [10,26]. Data quality management (DQM) has been examined from a variety of technical, functional, and organizational perspectives [22]. Achieving high quality is the primary objective of DQM efforts, and much research in DQM focuses on methodologies, tools and techniques for improving quality. Recent studies (e.g., [14,19]) have suggested that high DQ, although having clear merits, should not necessarily be the only objective to consider when assessing DQM alternatives, particularly in an IS that manages large datasets. As shown in these studies, maximizing economic benefits, based on the value gained from improving quality, and the costs involved in improving quality, may conflict with the target of achieving a high data quality level. Such findings inspire the need to link DQM decisions to economic outcomes and tradeoffs, with the goal of identifying more cost-effective DQM solutions. The quality of organizational data is rarely perfect as data, when captured and stored, may suffer from such defects as inaccuracies and missing values [22]. Its quality may further deteriorate as the real-world items that the data describes may change over time (e.g., a customer changing address, profession, and/or marital status). A plethora of studies have underscored the negative effect of low …