Research shows dirty data a risk to New Zealand businesses implementing AI.
New research released by Datacom shows New Zealand business may not have the quality of data to capitalise on AI and all it offers. Just nine percent of New Zealand businesses consider 100 percent of their data to be “clean” and 30 percent of companies think that half or less of their broad data set is free of issues.
Nearly half (47 percent) of New Zealand businesses believe that “close to 75 percent” of their data is clean. Data that is not clean or “dirty data” has issues such as having duplicates or being outdated, insecure, incomplete, inaccurate or inconsistent.
Datacom New Zealand Managing Director, Justin Gray, says this dirty data presents significant risks for businesses as the adoption of AI ramps up.
“The quality of AI outputs is wholly dependent on the quality of data that is available – garbage in, garbage out. For example, AI can be a powerful predictive tool and can identify patterns and trends within your business that you can use to guide strategic decisions, but if the data is off, then the AI analytics will be too.”
The research also revealed that while many businesses have the right intentions for their data, basic hygiene practices around data management are lacking with 40 percent admitting they do not conduct regular data cleansing and a further 13 percent being unsure if their business does.
Just under half (48 percent) of businesses conduct “regular data cleansing” but, among the businesses that do, 51 percent are not clear on how regularly this process takes place.
Data audit and assurance protocols are also lacking with 46 percent of businesses stating they did not have these in place and a further 11 percent being unsure.
Despite the shortfall in data management and hygiene practices, the research shows businesses are using their data for multiple critical tasks including to streamline business operations (80 percent), strategy and decision-making (79 percent), improving customer experience (77 percent), and improving processes (76 percent).
The research, commissioned by Datacom, comes from a survey of 200 senior data and IT managers and sought to understand whether New Zealand businesses are positioned to effectively use their data.
“The results show a clear need for data and IT managers to reevaluate their current processes if they want to use their data as the foundation for quality real-time analytics and insights, and if they plan to introduce AI tools and platforms into their business that will rely on the integrity and accuracy of their data,” says Gray.
When asked about specific barriers or issues being encountered when utilising data, businesses identified the top issues as incomplete data (51 percent), duplicate data (46 percent), inaccurate data (43 percent), and low-quality data (39 percent). Compliance or regulation issues around data were also identified as an issue by 34 percent of respondents and privacy risks (30 percent) and security risks (22 percent) were another data issue.
“These issues mean businesses are very vulnerable if they are relying on this data to help them make strategic decisions. If they can’t trust the data, they can’t trust the insights.”
New data storage and protection demands
The research also looked at how and where businesses are storing their data. Some organisations are using a mix of locations but the most common data storage location is still on-premise servers (53 percent), alongside private cloud (35 percent), New Zealand data centres (34 percent), public cloud (31 percent), and offshore data centres (15 percent).
Gray notes as emerging technologies evolve, the rate at which data will be produced and collected will increase rapidly and businesses need to plan for how their data is managed, stored and protected as the volume grows.
“Those companies that are relying on on-premise servers, for example, need to prepare for the rapid data growth that will come with greater AI usage and look at introducing back-up options for data storage so they aren’t left scrambling.”
The research showed that 91 percent of New Zealand businesses believe their organisation has adequate data and security protocols to protect their information but only 60 percent of businesses have data governance policies and procedures in place, managed by trained staff.
The Datacom-commissioned survey of 200 senior decision-makers (CTI, CIO, CDO and senior IT managers, data steward), working in New Zealand organisations with 100+ employees, was conducted in May 2024 by Curia Market Research.
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