Or, The Importance of an Information Strategy
The importance of having a clearly formulated, enterprise-wide and long-term Information Strategy, as part of the company’s overall strategy, has grown like never before. Information is critical to making the right decisions. This critical information includes what is going on right now (Tactical or Operational View), what happened previously (Historical View), and what is likely to happen in the near and distant future (Strategic View). Not having the right information when making critical decisions must be gut-wrenching. You don’t know if it is the right thing to do. Having poor information is as good as not having any information at all.
This is true for organizations at any stage of the growth cycle. Even an Early Stage organization can benefit from an Information Strategy. Typically. at that stage, one isn’t worried about having to consume large amounts of data. The list of customers may be small and the product list manageable and one always has a clear picture of what is going on with the business currently. All reporting and analytics can be achieved in a small database or spreadsheet. However, thinking in terms of a clearly defined Information Strategy will still help, because the exercise itself will help the business understand the right performance metrics to use to measure itself, and the need to have a clearly measurable strategy.
An Information Strategy becomes more critical at a stage when the business has grown from being a mom-and-pop shop with a limited set of customers and products it intimately understands, to a medium-sized organization having a multitude of customers and products that one can no longer hold in one’s head or on a single spreadsheet. Not looking at those customers or products holistically can result in critical business opportunities being lost (cross-selling, up-selling, the right new product introduction to the right market, getting the best rates from the right vendors – decisions based on a better understanding of customers, competitors, products, and vendors); lost opportunities that a competitor can take advantage of to gain market share. The flow of data can be so quick that not being able to translate that to effective information, results in a fragmented view of customers, products, and vendors. (Customers, products and vendors are being used as examples only. The same concept applies to other types of business or organizations equally.)
Not having an Information Strategy will probably result in misinformation being spread across the enterprise. This may mean the right metrics not being used. It may mean poor quality information being used. Different organizational groups may be seeing different versions of the same numbers. They may be pursuing narrow departmental agendas, perhaps using metrics that only show a narrow aspect of their performance in a better light. A balanced, enterprise-wide view is probably not available to any portion of the organization. This is primarily because no one knows what the right information is that each department and individual should be measuring against. No one knows what the strategy is.
Just like a business without a strategy doesn’t know where it is going, a business without an Information Strategy doesn’t know if it is going in the direction that is chose, or whether it should change it’s direction because it is clearly the wrong direction to take. Only the right information will allow a business with a well-defined strategy to understand how well it is executing on its strategy, and whether the strategy itself is delivering on the right results, before it is too late. Too late means lost customers, lost revenue or lost profits. It may even mean the collapse of the business itself.
To be successful, an Information Strategy has to be part of the overall business strategy – one of its components. It should be owned and driven by the business. Too often, the delivery of information becomes part of an organization’s DWBI initiative, with IT driving a mainly technology oriented requirements gathering program. The result is often a low-level (detailed) data warehouse that the business does not understand, with a BI tool layered on top that the business is forced to adopt, even though it may not even remotely meet their needs. Consequently, the business falls upon the old, reliable, but ultimately crippling system of spreadmarts – silos of information sitting on individual users’ spreadsheets, based on detailed data from unreliable, inconsistent sources, with hours being spent on transforming the data into information, with the same data cleansing processes being applied over and over again by highly paid analysts who get precious little time to analyze the information before decicions need to be made upon it. The content, quality, timeliness, cost and, ultimately, the most critical aspect of it all, Trustworthiness, of information being used in the organization, suffers.
On the other hand, the information in an organization that has a clearly formulated Information Strategy is a lot Mo’ Better (Higher Quality), Cheaper, Faster (Timely), and Trustier (Reliable, Decisive, Conclusive), resulting in the organization that clearly knows where it is going, knows that it is the right direction to take, and can make the right decisions based on the most reliable information available, without fear. An Information Strategy will result in a Decisive Organization.
Future posts will explore the elements of an Information Strategy, starting with the elements of an information strategy, the process of gathering requirements to define an information strategy, and the technology platforms available to implement the strategy. Feedback welcome.
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