As human beings, the most undervalued asset we have is water; for a company, it’s data, the core ingredient of Business Intelligence. You’d think we’d cherish it a bit more, wouldn’t you?
It’s only very recently that data has started to be viewed as a key corporate asset. Just twenty years ago most critical applications stored data in operating-system-supported files and accessed this data record-by-record. Data was not valued except for its ability to glue different business functions together, and thus data became fragmented across the enterprise. As the data became fragmented, so it became almost impossible to envisage its true worth – a true Catch-22 situation. We think that data has no importance so we store it anywhere that’s convenient, thereby making it impossible to use in an effective manner, thus decreasing its importance – so round we go again.
Over the last few years, however, business has changed dramatically, driven by globalisation, greater competition, more choosy customers and the internet, amongst other things that we have already touched upon, and IT has responded by commoditising processes where possible and putting value instead on data. Nowadays many leading companies treasure data and spend millions of dollars converting ‘data into information’ but the transformation is incredibly difficult to do. To unlock data from hundreds of legacy systems and get it into a state where it can be used to produce useful information is a monstrously big task for most companies, and a whole – and huge – world of Business Intelligence has been born to support the process. We must now begin to understand this sea-change in attitude – is it good, is it dangerous, and is data all that differentiates one company from its competitors? Just why is it so difficult to use data to create information?
We’re going to spend some time now in trying to answer some of these questions, but we have to be careful with the term ‘data’ because all data is not equal, indeed some items of data are invaluable and some are valueless, and nearly all change value over their lifetime. It may at this point seem a little odd that an item of data might have a lifetime, but I assure you the concept is quite relevant to us.
In general the value of data:
- Ø Increases with originality – if everyone knows a fact, then that knowledge is a commodity and may be of little value. If we have information that is only known to a few, then that information might be used very competitively.
- Ø Increases when present in detailed form – sales by product by day by store is interesting, but when we know who bought what, when and why and what they bought together, we can make much greater progress.
- Ø Increases over time – last month’s spending patterns are interesting, but when we can compare last month with that same month one year ago, we can start to see annual and seasonal patterns, patterns needed for prediction.
- Ø Increases when it is low in volume – whilst companies generate terabytes of data each year, real information is best conveyed in short, sharp, pertinent chunks.
- Ø Increases when the content is trusted – absolutely key to success is that everyone who gets answers to complex business questions trusts those answers and thus trusts the underlying data.