Which of the following is a benefit of managing reference data effectively?

Which of the following is a benefit of managing reference data effectively?

• A. Increased system downtime
• B. Lower cost and reduced complexity of data usage
• C. Higher degree of redundancy in data
• D. Increased manual processes

Answer: (B)

Managing reference data effectively leads to a lower cost and reduced complexity of data usage, which is a significant benefit. Reference data plays a crucial role in defining the permissible values and categories that data can take, such as codes, labels, and classifications that are consistently used across an organization. By ensuring that reference data is accurate, well-maintained, and accessible, organizations can streamline their data processes and reduce the complexities associated with data integration and analysis. When reference data is managed effectively, it minimizes the chances of errors and inconsistencies in data, which can lead to costly inefficiencies. It also enhances overall data quality and usability, as users can confidently rely on standardized data definitions. Consequently, this can lower operational costs related to data management and usage, freeing up resources for other strategic initiatives. In contrast, the other options highlight negative outcomes. Increased system downtime, higher redundancy in data, and increased manual processes all indicate inefficiencies that can arise when reference data is poorly managed. These factors would detract from, rather than contribute to, effective data management strategies.

Managing reference data effectively leads to a lower cost and reduced complexity of data usage, which is a significant benefit. Reference data plays a crucial role in defining the permissible values and categories that data can take, such as codes, labels, and classifications that are consistently used across an organization. By ensuring that reference data is accurate, well-maintained, and accessible, organizations can streamline their data processes and reduce the complexities associated with data integration and analysis.

When reference data is managed effectively, it minimizes the chances of errors and inconsistencies in data, which can lead to costly inefficiencies. It also enhances overall data quality and usability, as users can confidently rely on standardized data definitions. Consequently, this can lower operational costs related to data management and usage, freeing up resources for other strategic initiatives.

In contrast, the other options highlight negative outcomes. Increased system downtime, higher redundancy in data, and increased manual processes all indicate inefficiencies that can arise when reference data is poorly managed. These factors would detract from, rather than contribute to, effective data management strategies.