Data QualityQuestion 03 of 8

# What are the business risks of poor data quality?

tpTrackingplan answers

Poor data quality poses several business risks that can have significant impacts on a company. Indeed, according to Gartner, the average financial impact of poor data quality on organizations is estimated to be $9.7 million.

1.  **Governance and Compliance Issues**: Poor data quality directly affects a company's governance and compliance processes, leading to additional rework and delays. Failure to maintain accurate and reliable data can result in non-compliance with regulatory requirements, exposing the company to legal and financial risks.
2.  **Financial Costs**: According to the DAMA (Data Management Body of Knowledge), organizations spend between 10% to 30% of their sales on poor data quality issues. These costs include expenses associated with data cleansing, data correction, and data integration. In addition, poor data quality can lead to indirect financial costs, such as missed business opportunities and inefficient resource allocation.
3.  **Damaged Reputation**: Poor data quality can damage a company's reputation. Inaccurate or duplicate data can lead to customer dissatisfaction, mistrust, and irritation. It can also result in privacy breaches, violating data protection regulations like GDPR. Negative media attention and customer complaints can harm the company's brand image and impact customer loyalty.
4.  **Missed Opportunities**: Poor data quality can cause missed business opportunities and service delivery problems. Inaccurate or outdated data may lead to ineffective decision-making and suboptimal resource allocation. On the other hand, high-quality data enables better strategic planning, targeted marketing, and operational efficiency.
5.  **Lack of Trust and Confidence**: Inconsistent and unreliable data erodes trust in the company's data integrity. Users may question the accuracy and validity of the data, which hinders data-driven decision-making and undermines confidence in the company's overall operations. This lack of trust can make it challenging to gain support for projects, investments, and strategic initiatives.
6.  **Inefficient Technology Adoption**: Poor data quality reduces the effectiveness of new technologies and processes. Investments in advanced analytics, predictive modeling, and artificial intelligence depend on high-quality data. Inadequate, insufficient, or irrelevant data can lead to delays, ineffective implementation, and a lack of return on investment. This hampers the company's ability to leverage data-driven insights and stay competitive in the market.
7.  **Non-compliance and Financial Penalties**: Inadequate data management puts the company at risk of breaching compliance standards, leading to potential fines and legal consequences. Failure to meet data protection regulations can result in substantial financial penalties, negatively impacting the company's bottom line.

By recognizing these risks, companies can prioritize data quality initiatives, invest in robust data management practices, and implement effective data governance frameworks to mitigate these potential challenges.

For more information on **how to spot poor data quality issues in your data collection strategies**, check out our article on [** the business risks of poor data quality**](/blog/what-are-the-business-risks-of-poor-data-quality)**.**

**Stop babysitting tags**

Trackingplan audits your real user data around the clock and flags issues before they cost you.

[Start free trial →](https://app.trackingplan.com/signup) [Book a demo](/demo)

Filed under [Data Quality](/categories-faqs/data-quality) · [all questions](/faqs)

More in Data Quality

[Category page →](/categories-faqs/data-quality)

1.  [?What Is Digital Analytics and How It Drives Growth](/faqs/what-is-digital-analytics-and-how-it-drives-growth)
2.  [?What defines high-quality data?](/faqs/what-defines-high-quality-data)
3.  [?What is data debt?](/faqs/what-is-data-debt)
4.  [?What are the causes of data debt?](/faqs/what-are-the-causes-of-data-debt)
5.  [?How to reduce and avoid data debt?](/faqs/how-to-reduce-and-avoid-data-debt)
6.  [?Data Integrity vs. Data Quality: Are they the same?](/faqs/data-integrity-vs-data-quality-are-they-the-same)
7.  [?What’s worse: data debt or technical debt?](/faqs/whats-worse-data-debt-or-technical-debt)

Support

## Do you have any questions?

Your questions are important to us. If there's anything on your mind that hasn't been addressed, reach out to us.

[Let's talk →](mailto:support@trackingplan.com?subject=Trackingplan%20-%20Faqs)

Trackingplan

## See everything. Miss nothing.

Your implementations audited around the clock with real-time, real-user data. Real-time alerts about errors or changes in your data, campaigns, pixels, privacy and consent. Let AI flag issues before they cost you.

[Start free trial →](https://app.trackingplan.com/signup) [Book a demo](/demo)