Data quality can directly affect a company’s — or city’s — profitability
Recently, in a landmark ruling, South African courts ruled against the City of Johannesburg in a billing dispute. The court found that the onus is on the municipality, not the client, to prove the accuracy of the meter readings on which disputed bills are based. Although quite a coup for customers, this ruling also means that the city needs to address its data issues to avoid such issues — issues that not only affect payment, but also have a dramatic effect on the bottom line.
Every organisation that does business, transacts. Products or services are sold and invoices are raised to receive payment for them. This billing process is what drives business, and accurate and complete billing data is at the very core of the success of any organisation. As shown by this ruling, billing disputes are bad for business. Not only can they delay, or as in this case, completely cease payments, but they can also cost money in administrative and legal charges.
Disputes may arise for many reasons and in any business. Common disputes include disagreements between customers and suppliers over contractual terms or conditions; alleged errors in billing information, as in the case cited, where readings of data were allegedly incorrect; or as delaying tactics, where customers deliberately dispute billing in order to delay or avoid payment, citing missing or incorrect information as a reason. All of these reasons for a dispute can be mitigated if organisations ensure their data is of sufficient quality.
Quality data supported by sound data lineage can provide suppliers with valuable — and revenue saving — information. In the case of a usage-based service, such as that offered by the City of Johannesburg, this information could include evidence that meters are, in fact, installed at the consumer sites; evidence that the correct meter is being read for each consumer; and evidence that the correct meter is tested for each case. Such information, when properly recorded and stored, proves invaluable in the event of any dispute.
Of course, billing is not the only area where poor quality data has a direct effect on profitability. Other areas include stock and order management, where poor quality data could result in costly errors; sales, where customer acquisition and retention is based on the quality of data to hand; and even maintenance services, where poor quality data could negatively affect the service provided.
The link to poor quality data may not be obvious — in many cases, disputes are blamed on systems, processes or human error — but having quality data available gives suppliers the upper hand. Where disputes are raised due to errors such as a typo, they can be quashed and corrected quickly on the production of the right data. It makes sense, then, that accurate billing data be available for the complete revenue assurance process, especially given that the supplier is legally required to prove the accuracy of their bills.
• Allemann is MD at Master Data Management