Companies House proves £9m data governance value of just one letter

A tiny data governance error destroyed Taylor & Sons after Companies House recorded the insolvency of its near namesake Taylor & Son

A tiny data governance error has destroyed a 124-year old Welsh family business. Taylor & Sons collapsed in a matter of days after Companies House recorded the insolvency of its near namesake Taylor & Son.

Companies House is an executive agency of the Department of Business, Innovation and Skills, and makes money from selling data. The credit reference agencies who are among its customers amplified the error of the missing ‘s’, made on 20 February 2009, and the Cardiff engineering company’s 3000 suppliers cancelled orders thinking the firm was in financial trouble. Within two months it was - the company went into administration, at the cost of 250 jobs.

This week a High Court judge ruled Companies House to be liable for the firm’s collapse and imposed damages believed to be in the region of £8.8m.

Computer Weekly blogger Philip Virgo said that the case brings to the fore a need “to bring the UK information governance regime (both public and private) under proper judicial oversight”. He added: “We have much debate about information security and data protection but far more harm is caused because accurate information is not available when and where it is needed”.

Virgo invoked the 800th anniversary of Magna Carta when England’s King John submitted his rule to baronial constraint, commenting that, “We need to address the duties that the 'data barons', as well as the state, owe to the rest of us with regard to their use of our personal data”.

But how significant is this case? Companies House tried to correct its clerical error three days after it was made, but the online juggernaut was by then already in train. Is, then, the entire system to blame? And should suppliers to the firm, like Tata Steel, have shown a bit more common sense when the error was revealed? And would a firm like Taylor & Son, employing some 250 staff, not be turning over more than £9m each year?

Andy Hayler, a data governance expert and CEO of analyst firm The Information Difference, said: “It sounds like a simple error with huge consequences, but given the scale of what happened it would seem clear that Companies House should have some more robust processes in place in order to avoid what seems quite a simple mistake to make.

“There might be some technology that could help avoid such an error in future, but a manual double checking process might be wiser given the serious consequences."

Hayler cites a host of egregious data quality errors, including the case of “a global company that ordered packaging of the wrong size due to a unit of measure being wrong, at a cost of €15m”. And a “major multi-national that sold a well-known product for over a year across the whole of Asia Pacific at no profit due to a simple pricing error in their ERP system”.

Clearly data errors are not the preserve of the state or its agencies.

Read more on Data quality management and governance

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