When you attempt to create value, you have to make a choice between alternatives and this requires reliance on information. Understanding how to create “quality” information is paramount to decision making. One way to improve the quality of information is to make sure there is a strong flow of external sources – looking at market trends, surveying the customers, pursuing new technologies, and of course, competitive intelligence. These external sources provide the “reality checks” we need to remove internal bias, common to so many organizations.
“For managers to produce information required for their work, they have to address two broad questions:
1. What information do I owe to the people with whom I work, and on whom I depend? In what form? And in what time frame?
2. What information do I need myself? From whom? In what form? And in what time frame?
– Competing with Information: A Manger’s Guide to Creating Business Value with Information Content, Edited by Donald A. Marchand
Another way to improve the quality of information is to look at your people. Information is how people communicate their knowledge so things get accomplished. Since information relies on people, it only stands to reason that the quality of information has a lot to do with the quality of people; i.e. the skills, expertise, training, experience as well as their communication skills. This can greatly impact the quality of information – improve your people if you want to improve your information.
The quality of information also follows certain characteristics. These characteristics can lend serious value to information. Here are a few examples:
• Up to Date – Information that is current usually has more value than old, outdated information.
• Accuracy – Some sources of information tend to have higher accuracy than others.
• Impact on Decision Making – Information that is useful to decision making will lend value to the organization.
One common problem in creating value through information is putting the information in front of the decision maker. This requires that people have access to information. Too often, organizations have fragmented silos of information, contributing to inconsistency in decision-making. Pulling all of these stovepipes of information together into one common repository can yield numerous benefits, such as: Faster response time by decision makers, better creditability with stakeholders (employees, customers, suppliers, etc.), improved accuracy through verification, and more value added through the application of analytical tools.
Obviously, technology plays a big role in making this happen – everything from better access to filtering of the information overload. Perhaps the single biggest technology behind the management of information is something called the Data Warehouse. The Data Warehouse pulls together all of the desperate databases, providing not only wider access, but also increased analytical capability through the understanding of relationships between all of this data. So if you are serious about creating value through information, you’ll probably have to consider some form of a data warehouse.
“Capitalizing on the information a company owns about its customers, suppliers, and partners is now the value proposition for sustainable long-term growth. Better information, then, transforms business. Better information also transforms the terms of collaboration between businesses.” – The Value Factor by Mark Hurd and Lars Nyberg
Finally, the roadmap to value through information is creating systems and processes for learning. Author Peter Senge popularized this concept in his book The Fifth Discipline – namely that we all need to become systems thinkers, having the ability to fit the pieces together. This entire process is commonly referred to as the Learning Organization. And this is a big factor behind creating value through information! And when coupled with the right people and the right technology (such as a data warehouse), information can add a lot of value for anyone touched by the information.
“The knowledge economy stands on three pillars. Knowledge has become what we buy, sell, and do. It is the most important factor of production. The second pillar is a mate, a corollary to the first: Knowledge assets – that is, intellectual capital – have become more important to companies than financial and physical assets. The third pillar is this: To prosper in this new economy and exploit these newly vital assets, we need new vocabularies, new management techniques, new technologies, and new strategies. On these three pillars rest all the new economy’s laws and its profits.” – The Wealth of Knowledge by Thomas A. Stewart