How data standardization delivers ROI

Holding onto data is almost useless for a business if it does not have a proper data management strategy. A robust data management strategy relies on a methodical, step-by-step approach—much like how you'd approach building a house. We've used this analogy many times here at Experian Data Quality, but that's only because it makes a lot of sense when referencing data standardization.

Data standardization is but one step to building a good data management strategy, but it is a fundamental step in making your data actionable. Just as a solid foundation is essential for a strong house, data standardization is necessary to build a strong data management program. As a result, it is in your best interest to invest in a data standardization system. Data standardization allows organizations that strive to be data-driven to make decisions quickly and efficiently.

What is data standardization?

Data standardization is the process of transforming or manipulating data into a consistent format. As businesses collect data, the information most likely settles into multiple, disparate systems, all of which may have slightly different rules and formats for how the data is stored. These small differences can result in misunderstandings and misinterpretations of your organization's data. Inconsistent data leads to distrust, second-guessing, and time lost completing checks to verify that the conclusions made off that data are actually correct.

In a data-driven business, time will be far better spent acting on data than manually verifying and reformatting it. Standardization takes manual checks out of the equation. With the right data standardization tools, you can spend your time using your data rather than fixing it.

How does data standardization work?

The business data standardization process takes data from multiple disparate sources and, based on rules you define, transforms it into a consistent, usable format. It gets rid of anomalies and outliers, so that you can identify errors in your data and make it easier to analyze.

Due to differing requirements across different systems, along with typos and human error, the data that flows into your organization comes in a variety of formats. Using multiple data entry systems can lead to inconsistent capitalization, punctuation, obscure acronyms, alpha-numeric characters living in fields they shouldn't be, and so on. Data standardization tools eliminate these inconsistencies and help you define how data should appear in your database.

Unlike data cleansing, which periodically corrects and eliminates errors in data, data standardization is an ongoing process to connect and sync formatting across multiple data entry systems. Data standardization is helpful for properly formatting:

• Country and state abbreviations
• Email addresses
• Company names
• Addresses
• Common typos and mispellings
• Phone numbers

How does data standardization benefit my business?

Data standardization is crucial for a data-driven business. Any business can store data, but clean, clearly formatted data that can inform business operations will set a business apart. The advantages of data standardization allow your business to do the following:

Improve data accessibility

Data is most effective when it is accessible to as many people in an office as possible. When data can be easily shared between staff members and departments, businesses are more efficient in decision-making and developing action steps. Consistent data allows everyone to be on the same page at all times without needing to reconsider or reformat data.

Save time and money

Second-guessing your data has consequences. The need to manually verify and correct data uses valuable time that could be spent making decisions and taking action. Data standardization confirms that your data is formatted consistently regardless of which system was used to collect it, and consistent data means you can trust your investments.

Make more informed decisions

Data that follows a common format is easier to interpret, sort and analyze. Easy-to-interpret data allows you to recognize trends and gain further insight into your customer base, allowing you to better informed decisions as a result. When you make data-supported decisions, you are able to strategically target your spending and investments, providing you with a higher return.

Reach your customers

Standardized data plays a key role in reaching new and previous customers. Consistent formatting for data like email addresses and postal addresses ensures that you can reach your customers through targeted marketing campaigns. With reliable data, you position your campaign to be as successful as possible and do not waste money sending to incorrect or improperly formatted addresses.

Why should my business standardize data?

Ultimately, standardized data increases efficiency and potential. If you're still in need of convincing, I'd be happy to share a personal use case. My organization relies on a marketing automation platform, a CRM, and Google Analytics, in addition to more platforms that all collect and store data. This data is crucial for business-wide forecasting and projections. As we strive to gain insight from our data, it is imperative that everyone has a standardized view and understanding of the data being used to make these decisions.

Unstandardized data would be a nightmare in these processes, leading to confusion between departments and wasted time spent manually converting data. It is necessary that everyone in the business is on the same page and is able to easily interpret and analyze data, otherwise, data is more of a burden than a value. If you're undergoing a data migration or modernization project or if you've been charged with cleaning up your customer database before initiating a loyalty program or marketing initiative, data standardization is a non-negotiable first step in the process.

Data is one of the most important assets businesses hold today. It can either empower your organization to connect with new customers and reach new heights or be a deadweight that wastes time and drags your team down. I think the choice here is clear.

Standardize your data for a higher return on investment

Why run the risk of letting inconsistent data sabotage your success? Treat your data as a strategic asset. Easy-to-interpret and reliable data is invaluable for decision-making, systems efficiency and building customer connections. Standardization is the key to maximizing its potential and seeing higher gains from your data. At Experian Data Quality, we can help you standardize your data to increase its value. 

Originally written by Shirley Zhao, 2017.