Turning data and information into profit
Making profit is the ambition of most companies. It is done by providing products and services to the market that consumers are willing to pay for – above the cost of production. Profits are a result of why the company is in business, and how it structures and organizes its resources to match the conditions and pre-requisites of the market.
Data and information is the fuel and glue that allows the company making the right decisions and investments to drive profits. Without insights to how the market works, it would be impossible to match the ever-changing demand of the customers. With increased digitalization and higher unpredictability, the need for the right information (at right time and quality) is becoming more and more important. A faster and accurate information flow allows the company to quickly parry the unpredictable threats of the digital era. Accurate data and information is key for profits in the digital era.
Establish a common vocabulary
When studying companies, the information management structure is often very complex and slow – hindering the company to performance and compete in the digital market. The fact that many companies have trouble to define who their customers are and what characterizes them in a unified way. A couple of months ago, I meet with a digital transformation team to analyze how the digital capabilities created value to their customers. The plan was to do a four-hour workshop, but we spent half the time just to discuss who the customer was. This was something that had been avoided for some time as it was considered “too painful”. The first step is always to have a common vocabulary (glossary) of concepts part of the information architecture. How can you otherwise discuss how to improve the system?
When working with information systems, we have identified six key information management domain that are essential for a fast and accurate information flow – supporting corporate profits.
- Information Architecture: Ability to reduce information and data complexity to stream-line the data & information flow
- Information Value Management: Realizing the information asset. Understand and optimize how information management supports business ambitions and value creation
- Information Skills & Competence: The capability to continuously maintain and develop information management to support value creation
- Information Governance: Defining roles and responsibilities, organization and decision making (mandate) in information management
- Information Management (including maintenance): The operative management of information and data according to best practice way of working (in practice)
- Leadership & Culture: Creating the right atmosphere for data driven management and business value focus
When studying these six information domains, it is possible to conclude that all of these domains need to work well for a fast and accurate information flow. It is easy to see information management from only a maintenance and operational perspective (tools and processes) but without embracing the complete picture, the company will not unleash its full information potential. My un-scientific observation is that the average information maturity of companies is below 50% (based on the maturity of each of the six information domains) with high impact on company performance and revenues. Profits is based on fast and accurate data and information management.
To improve information management in a company and organization does not have to be overly complex or costly knowing exact where to focus and why. Here come some recommendations on how to proceed:
- Assess which of the information domains that is the root cause to the information challenges. Focus on solving the root causes rather than improving where you feel comfortable.
- Get the basics in place! Come to a common understand of the conceptual design (principles) of information management including a common glossary.
- Focus on data/information quality to secure that decisions are based on accurate data/information. Where does the data/information comes from and who can secure its right quality?
Information management is getting increased attention in most companies. But still, in 2019, it is still in many companies considered a technical challenge. What we need to understand is that information management is a business challenge spanning across leadership, culture, value management and governance in turning data and information into profits. Only with the right focus can we get the right outcome!