‘Garbage In Garbage Out’ (GIGO) is an informal designation of the following principle: poor inputs provide poor outputs or results. The term comes from IT (IBM company in particular). Inputs were thought of as poor data, as well as bad instructions, bad algorithm, and so on.
How can be the ‘Garbage in, garbage out’ principle applied elsewhere?
Because the principle is actually based on the philosophy of quality management, it can be applied virtually anywhere where we need to emphasize the influence of quality of inputs or the production process for example, on the outputs (result). The strength and popularity of the expression ‘Garbage in, garbage out’ lies in its straightforwardness. In practice, many people and managers tend to concentrate more on the process or procedure (mechanical repetition of routine activities) caused by their operational “blindness” and to forget about other circumstances, such as quality of input data for drawing up a financial plan that would be close enough to the reality.
Therefore, the principle can be applied in planning, decision making, financial management, financial modeling, production management, predictive modeling, simulations and other fields where the failure to ensure the quality of input data results in bad decision making. The consequence is a cascade of poor results.