Data Quality Engineering in Financial Services

Chapter 1. Thinking Like a Manufacturer

This chapter introduces concepts of efficiency, effectiveness, and Lean manufacturing along with several examples of high-quality excellence in manufacturing. Manufacturers use raw and semifinished materials to create products. Thinking like a manufacturer means thinking about data as a raw or semifinished material and thinking about data management processes much like manufacturers think about the production process in a factory. There are many similarities between manufacturing a product and managing data:

• Both use raw and semifinished materials

• Both require detailed manufacturing control specifications

• Both include quality validations and verifications

• Both use quantitative tolerances and measures to confirm conformance to a specification

Operational Efficiency

There are many definitions of operational efficiency, but I define it as the ratio between the inputs to run a business operation and the outputs gained from its production. Improving a business’s operational efficiency means the output-to-input ratio also improves. Common business inputs typically include money, intellectual property, and employees. The business outputs typically realized include products, revenue, customers, market differentiation, productivity, innovation, and so on.

Poor data quality is one of the main contributors to operational inefficiency in the financial industry. It impacts a financial firm’s ability to efficiently conduct business and it can lead ...