John McCormick raises a spectre more suited to Halloween than spring: the possibility that CIOs in public companies could be required by the US government to certify that the information they supply to governemnt agencies is correct. As the article points out, given that much of the information stored in corporate systems is wrong or incomplete (the article quotes a Gartner guesstimate of 25% being in this category) this could result in a few worry lines on CIO foreheads.

I think that, at least for now, this is scaremongering. The US government is aware of the considerable backlash against Sarbanes Oxley from business, and indeed some minor softening may occur in due course. The notion that they would compound this massively by asking for certification of all data in a company, something that is manifestly impossible anyway, seems far fetched. Even if the governemnt were “selective” as the article suggests, then presumably areas of interest would tend to be things which are currently carefully regulated anyway e.g. FDA documents in the pharma industry, or information in defence companies. Even the current administration would hardly try to put in regulation that would allow government agencies to go on fishing trips through corporate data, and then demand certificatoin that what they found was right.

Or would they?

In Hollywood there is something of a herd mentality. If one studio brings out a gladiator film (say) then the others feel obliged to do likewise. Software is something of a fashion business, and so some similar behavior occurs. It seems like the indispensable fashion accessory at the moment is a data quality vendors: one simply can’t be seen out without one, darling. Hyperion showed off its latest purchase this week: Upstream software, a small data quality vendor from Michigan. As in fashion, the price is so much more tantalizing if it is only available to those in the know, and so the terms of the deal were not announced. I believe that Upstream’s revenues were about USD 8M and had about 30 employees. At some point Hyperion will presumably have to come clean, since they are a public company. Recently data quality vendors have been snapped up at bargain-basement prices, and certainly Hyperion has the sort of bank balance that it could pay fro Upstream out of loose change even if it paid a full price. However its most recent results show a certain amount of stumbling. Even though profit margins were still strong at 16%, but license revenues (the key to long term health for a software vendor ) actually fell by 6% on a year over year basis. Nonetheless, Hyperion has an enviable franchise as the undisputed king of financial consolidation, and is highly profitable.

The deal actually makes good sense to me: financial consolidation is Hyperion’s core business, and those of us who work in the industry know just how flaky the quality of data can be in those superficially shiny ERP finance systems. Hence a data quality spin makes good sense for Hyperion’s message to nervous CFOs. Unfortunately data quality is a very intractable problem, involving as it does human nature, and even the cleverest software can only assist with fixing issues of this nature. The data quality software vendor market may be shrinking, but underlying the problem of data quality itself is not.