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The World’s Most Expensive Data Entry Errors and How to Avoid Them

We look at some of the most expensive data entry errors in history and how order-to-invoice automation can eliminate the most common and costly procurement errors.

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BlogImage_DataErrors8-7.pngFor most of us, a typo isn’t a big deal. We can correct it later, and, even if we don’t, there are few consequences. For some workers, however, an uncorrected typo heralds disaster for them and their employer. Typos made by procurement professionals, bankers, and traders have destroyed businesses and wiped billions of dollars from the value of stock exchanges.

We often think of automation as a tool for increasing the speed and efficiency of business processes, freeing employees to work on tasks that require intelligence and creativity. But one of the most important benefits of automation is correctness. Machines don’t make typos.

They don’t send purchase orders for 10,000 units of a product instead of the 100 units that were approved. They don’t create invoices for a tenth of a value of the delivered product because they accidentally transposed a decimal point. By automating the transfer of data between buyer and seller, B2B businesses eliminate a source of risk that has caused the demise of many businesses.

Let’s take a look at some of the worst examples of data entry mistakes to drive the point home.

Fat-Fingered Traders

In 2002, a trader at Bear Stearns – a bank that later went out of business – accidentally entered $4 billion instead of $4 million when attempting to sell the shares of some major corporations. The mistake led to a 100-point drop in the Dow Jones Industrial Average, wiping out billions of dollars in value for shareholders.

In a similar error, a London-based trader for Lehman Brothers, another bank that is no longer in business, in 2001 ordered the sale of £300 million shares of AstraZeneca and BP instead of £3 million, wiping £30 billion from the value of the stock exchange.

And in 2005, a Japanese trader who intended to sell one share for ¥610,000 instead sold 610,000 shares for ¥1 each, costing their employer over $300 million.

Mistakes of this sort are more common than you might think. The most careful and experienced professionals make data entry errors when they’re stressed or fatigued.

Alitalia Airlines Fiasco

In 2006, Alitalia, Italy’s national carrier, launched a promotion on flights from Toronto to Cyprus. At the time, the intended promotional price was $3,900, a compelling bargain compared to the standard price. However, a data entry error led to the promotion being entered into the company’s online ticketing system at $39. Before the error was spotted, over 2,000 passengers had bought tickets, which Alitalia honored, losing over $7 million.

Smaller Amounts, Bigger Impact

We’ve looked at some of the most expensive data entry errors in modern history, but mistakes involving less extreme amounts happen every day in businesses across the world.

AT&T discovered that cumulative data entry errors in purchase orders and invoices caused it to overpay suppliers by tens of millions of dollars. A UK-based healthcare business under-ordered a vital chemical catalyst because of a procurement error. Because the chemical was unavailable, a key production line had to be shut down, and, eventually, the company went out of business.

Human error in the supply chains of small and medium businesses is avoidable. Automation of the exchange of data between eCommerce and eProcurement platforms eliminates error-prone manual data entry. Requisition orders, purchase orders, and invoices can be moved between buyer and seller automatically, ensuring that a slip of the finger can’t lead to disaster. 

PunchOut2Go has helped thousands of organizations around the globe completely eliminate these errors with end-to-end automation of the procure-to-pay process. Contact us for more information.

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