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Updated Apr 10, 2024

Why Data Integrity Is Crucial for Your Business

Follow these tips to ensure quality and reliability with your company's data.

Mark Fairlie
Mark Fairlie, Senior Analyst & Expert on Business Ownership
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A editor verified this analysis to ensure it meets our standards for accuracy, expertise and integrity.

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Data tells us who our best customers are, which staff members perform well and how to improve efficiency in our businesses. Companies need this data to make the right decisions about their current and future direction.

But leaders must be sure that the information they’re working from is accurate, up to date, consistent and concise. Below, we explain what data integrity is and recommend five resources to help you improve data management and integrity in your business.

What is data integrity?

Data integrity refers to how reliable a database is throughout its life cycle. Can the information a database contains be trusted?

For a database to have integrity, it needs the following five characteristics:

  • Accuracy: Data should reflect reality and be free from errors.
  • Attributability: It must be clear who has recorded new or altered existing data and when this was done.
  • Contemporaneousness: When someone records new or alters existing data, the addition or change must be recorded onto the database straight away.
  • Legibility: Entries should conform to notation protocols (in other words, people should add or amend data using the same set of instructions) so that others can understand them. Where information is corrected, the reason for the change must be given.
  • Originality: All data should be stored in its original and unaltered state.

There are two types of data integrity: physical integrity and logical integrity.

Physical integrity refers to who has access to data. Data can be stored either on hardware, including cloud hardware, and/or removable media like flash drives and DVD-ROMS. To achieve physical integrity, your data must be retrievable immediately following an event, such as flooding, extreme weather, device failure, cyberattack and connectivity and power outages.

Logical integrity requires the following four characteristics:

  • Entity integrity requires a primary key, which is the unique identifying ID on every database column row/record.
  • Referential integrity requires a foreign key, which is a shared reference linking a record on one database to another. For example, an “order number” foreign key may feature on both a customer relationship management (CRM) record and a dispatch record. A change on the CRM record will not change the dispatch record which uses the same foreign key.
  • Domain integrity is a way of validating data in a database column (for example, the presence of an “@” sign and a recognized TLD for email address data).
  • User-defined integrity are extra fields, unrelated to the other three, where additional information is stored.

Why is data integrity important?

Businesses require accurate, up-to-date data to make the best decisions. Data gives stakeholders and executives a better understanding of their strengths and weaknesses in comparison to their competitors. Data allows businesses to identify opportunities to reduce costs, increase productivity and enter new markets.

The best everyday decisions are made using real-time data. This lets you have a pulse on your business’s efficiency in the marketplace and on the performance of your competition.

However, the reality is that many executives and small and medium-sized business owners don’t have access to what they need. According to recent findings by HFS Research, 90 percent of executives believed that high-quality data was a critical factor for ensuring successful outcomes. But about 75 percent of them do not have a high degree of trust in their own data or their company’s data architecture. 

Tip: You might find planning and implementing a data breach and cybersecurity plan easier by working with an independent IT partner.

Common threats to data integrity

The most common threats to data integrity are:

  • Lack of perceived importance: Maintaining data integrity needs to be a core business process driven from the top whose importance needs to be clear to all.
  • Lack of processes: You need processes to determine how data is being entered into and altered on your system, what data is recorded and who’s responsible for recording data. Many companies use workflow diagrams that show data input and output and all of the changes that might occur in between.
  • Lack of regular auditing: Regular data sweeping using validation and auditing tools to find errors quickly. It can also uncover data disparities in systems and processes.
  • Access to data is too broad: Staff should only be able to access the data they need to do their work. If their log-ins are compromised, this restricts what data a hacker can access by default.
  • Lack of user training: You need to invest in employee training to ensure that all database users (including contractors) know how to correctly record and alter data. This greatly reduces the chance of mistakes and incorrect formatting. That won’t eliminate all human error but it will reduce it. 
  • Not having backups: Internal and external bad actors threaten the security and privacy of your data. You need to make regular use of top online backup services to back up your database to protect against this as well as any data loss from pre-processing errors or hardware/software failure. 
  • Poor cybersecurity: Companies should identify which data is of the greatest value and run a cybersecurity audit to determine how best to protect it. [Related article: Cybersecurity for Small Business Owners]
  • Poorly configured hardware and software: When selecting new hardware or software, you should make sure that it will work with existing technology and requires little or no configuration. Companies should ensure software patches are downloaded on the day of release and retire software that is no longer being supported by a vendor.

How to ensure data integrity

Now that you understand why data integrity is so valuable for companies, it’s time to learn how to achieve it. When stakeholders and executives are confident in their data, they can move forward more aggressively with plans and growth.

Most big companies gather data through numerous approaches, including the following:

  • Company websites
  • Back-end databases
  • CRM systems
  • Enterprise resource planning systems

Plenty of companies use a combination of these data-collection methods. But what can you do to ensure data integrity? Here are some ideas:

  • Management: Make sure your business’s management understands the significant role data integrity plays in your daily operations.
  • Delegation: Assign clear functions and duties to ensure everyone takes responsibility for maintaining data integrity.
  • Systems, processes and screening: Front- and back-end systems are mostly responsible for data collection, but you also need a process to establish how data is being entered into these systems. Most companies use workflow diagrams that show data input and output and all of the changes that might occur in between.
  • Policies: Many companies are now establishing and executing policies demanding the regular examination of data. One common practice is to create data-integrity reports that focus on data disparities in systems and processes. Such reports can help companies proactively address data issues.
Bottom LineBottom line
Data integrity practices help to stop CRM data decay meaning that, when you reach out to customers with new products and services, you won’t be working with out-of-date contact details.
Mark Fairlie
Mark Fairlie, Senior Analyst & Expert on Business Ownership
Mark Fairlie brings decades of expertise in telecommunications and telemarketing to the forefront as the former business owner of a direct marketing company. Also well-versed in a variety of other B2B topics, such as taxation, investments and cybersecurity, he now advises fellow entrepreneurs on the best business practices. With a background in advertising and sales, Fairlie made his mark as the former co-owner of Meridian Delta, which saw a successful transition of ownership in 2015. Through this journey, Fairlie gained invaluable hands-on experience in everything from founding a business to expanding and selling it. Since then, Fairlie has embarked on new ventures, launching a second marketing company and establishing a thriving sole proprietorship.
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