A better approach to managing information
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The document outlines a new approach to information management that emphasizes the identification and utilization of non-business-as-usual situations to unlock high-value insights. It critiques existing models that often fail to align information with urgent business needs and proposes a framework organized around understanding business processes and the consumption of information. The author argues that in an era of rapid disruption, effective information management is crucial for organizations to remain competitive and responsive.
A better approach to managing information
- 1. 1 | P a g e | A b e t t e r a p p r o a c h t o i n f o r m a t i o n m a n a g e m e n t A better approach to informationmanagement Introduction There are a couple of irrefutable factsthatchallengeourapproachto managinginformation Informationisworthmore if itis usedinsituationsotherthanbusinessasusual. Many organizationsdonothave the wherewithal toidentifythose situationsuntil theyare upon them,therebylosingthe opportunitytobenefitfromhighvalue information. Withsome minoradjustmentstoour approach inmanaginginformation,manymore organizationscouldbenefitfromthese highvalue informationsituations. Let’sgive an example of ahighvalue situation. Assume companyXhasa relationshipwith companyY forthe past three years. Everyweek,approximately$150,000 of productis shippedfromCompanyXto CompanyY,and CompanyX buysapproximately$300,000 of servicesfromCompanyYeach quarter. CompanyX wasable to reduce theirfreightcostsby15% by changingdeliveryservices approximatelytwomonthsago. CompanyY had twoof theirpastshipmentsshortedby $10,000 worththe product,and has reducedtheircurrentorderto $75,000 and placedan orderfor $75,000 withalternate supplier. Due to the processesusedtomatchordersto shipments,the monthlyactivityisnot analyzeduntil 3daysafter the final businessdayof the previousmonth. Giventhe above facts,whatwouldthe informationthatCompanyYis consideringchanging suppliersbecausetheywere shortedbythe new freightcarriercontractedbyCompanyX? Clearly,if the informationthatthere wasa problemwiththe new freightcarrierthatis losingbusiness,andif actioncouldbe takenpriorto customerstestingthe waterswith alternate suppliers,thereistremendousvalueinthisinformation. Ididnot mentionother companieswhichalsocouldhave beenshorted,sothe informationismostprobablyworth much more than the $1.8M annual revenue CompanyXreceivesfromCompanyY. In the physical marketplace,the eyesandears of the salesforce are there to uncoversuch activities. Inthe digital marketplace, however, the cluesof suchactivitiesare everywhere,if theyare accessible. Forexample,theremaybe cluesinsocial media,there maybe cluesin website trafficand blogs,orotherdigitallyaccessible information. Thisdigital information, howeverisaccessibletomanyorganizationsatthe same time itisto your organization, meaningthe windowof opportunityisparticularlyshortwhenitcomestodigital.
- 2. 2 | P a g e | A b e t t e r a p p r o a c h t o i n f o r m a t i o n m a n a g e m e n t The purpose of thiswritingisto manage informationinsucha wayso that these non-businessasusual and disruptive situationscouldbe identifiedthroughsome mechanismandthe valuationof such informationcouldbe assignedsothatthere ismeasurable benefittoaligninginformationtothe vehicles that identifysuchsituations,facilitate swiftactionandensure intendedoutcomes. Shifting how informationis managed Informationiscurrentlymanagedbyhow itissourcedand synthesizedintoanalyticframeworkssothat it can be analyzed. The analyticframeworksare generalizedanddecoupledfromthe processesthat consume information,butitisthese processes,particularlythosewitheithersignificantrisksortime pressures,thatrequire informationbe alignedwiththemsothatit can be digestedwithoutdelay. The problemisthat informationisrarelysourcedinawayopportune foritsconsumption. Eachprocess that requiresinformationmustgathersome fromhere,some fromthere anddeal withthe misalignmentof the sourcesthatare usedto derive andexecute anactionplan. Nowonderitis difficult for manyorganizationstouse informationformuchmore thanbusinessasusual circumstances. Today,evenwithadvancedanalytictool (e.g.,R,SAS, etc.),InMemoryanalytictools(e.g., Qlikviewand Tableau) andcolumnaranalyticenvironments(e.g.,databaseappliances,BigData,etc.) datascientists, or those whoare specificallyengagedtoprovide analyticsupporttobusinessstakeholders,spend almost20% of theirtime identifyingthe rightdatato use and approximately60% of theirtime reorganizingthe informationtofitthe businessquestionsathand(Forbes,March,2016). If there are trustworthinessorrelevance issuesthatneedtobe factoredoutof the information,itiseasytosee why our analyticframeworksare goodfordealingwithbusinessasusual situationsandsome highly repeatable andframednon-businessasusual situations(i.e.,shrinkageinretail,patriotactviolationsin banking,etc.) butisill suitedtodeal withthe surprisesthatappearonregularlyinthe financial press. What we hope to unveil inthiswritingisabetterwayof approachingthe situationandbuildinginan overall frameworkthatincentsthe organization tobe readyforand pounce onthe importantnon- businessasusual anddisruptive situationswithinformationthatisreadyto digestbythe business community. Four Quadrants of informationmanagement Our analysis,basedonouroriginal researchandinformationavailable elsewhere (BigBangDisruption, Knowles,2016, The ClaytonRichardsonReader,HarvardBusinessReview,2016, In our analysis,we have groupedthe practicesof informationmanagementintofourquadrants,thesebeing: The technologydriven quadrant,whichisthe legacymodel. Inthismodel,informationis managedforefficiency,meaningthateachsource of informationismanagedtogetherbecause there are efficienciestobe gainedbymanaginglike informationtogether. Typical driversfor the technologydrivenquadrantare initiativeswhichallow the analysisof informationthrougha
- 3. 3 | P a g e | A b e t t e r a p p r o a c h t o i n f o r m a t i o n m a n a g e m e n t multi-purpose model,andare oftenexposedthroughdataquality,MasterDataManagement (MDM) and data lineage opportunities. All of these initiativesare focusedonthe sourcingof informationandidentifyingthe bestsource for data,butnot necessarilyonhow the information will be consumed. The largestissue withthe technologydrivenquadrantisitisfocusedon organizingdataalongknownusage patterns,andnon-businessasusual anddisruptivesituations are notcommonlyassociatedwithknownusage patterns. These organizationsare more likely to be blindsidedbydisruptions. The Chief AnalyticsOfficerdrivenquadrantisfocusedonorganizingdataso that itcan be combinedandconsumedthroughanintegrationlayermanagedbytechnologistsforexpected (businessasusual andmodelednon-businessasusual) businesssituationsandbydatascientists for unexpected(non-businessasusual anddisrupted)businesssituations. Because ittakestime to organize informationtofitthe currentnon-BAUor disruptive situation,thisquadrantcanbe commonlydepictedaslate todisruptions. While theyare lessprone tobe blindsidedbyas manydisruptions,theyare notgoingtobe as effectiveasotherorganizations,particularlyin those where the businessclimate iseitherhighlydisruptive orthe transactionturntime is particularlyshort. The Opportunisticdrivenquadrantisfocusedoncapturingearlywarningsfromsocial media,log analyticsandothermeansto identify non-businessasusual anddisruptivesituationsasameans to give extratime toanalysts. Thisopportunitydrivenmodel isuseful inhighlydisruptive markets,butis easyto misscluesinmore stable marketsbecause large swingsandtrigger pointsare not identifiable fromthe watchedtriggersources. Organizationsinthisquadrant have significantinvestmentsinsocial media,streamingsourcesandothervenueswhichcan helpdecipherchangestothe statusquo. We considerthe targetquadrantone that organizesinformationalongthe processesthat consume informationratherthanthe sourcingof information. Thisquadrantdemandsan understandingof howbusinessprocessesalignedtovalue propositionswill consume informationandhave triggeringmechanismsbakedintothe modelstodecipherwhenone or more assumptionstothe value propositionhave changed(signalingeithernon-businessasusual or disruptive situations). Thisquadrantalsois focusedonfacilitatingasclose toimmediate consumptionof informationaspossibleanderadicatingreasonsfornotusingavailable information(calledresistance inthe model).
- 4. 4 | P a g e | A b e t t e r a p p r o a c h t o i n f o r m a t i o n m a n a g e m e n t Figure 1 | The four quadrants of information management, InfoSight Partners, 2016 What does it mean to map information? The intersectionof processesdevisedtosuccessfullyexecute avalue proposition,eachwhichconsume informationbyactors(those involvedinthe executionof the processes) haspotential value,inthatif the informationmappedtothe processisconsumedbythe processasanticipated,then aportionof the value propositionachievedisattributable tothe consumedinformation. Informationnotconsumedbythe processesasenvisionedisdescribedasresistance,anderadicating resistance isthe secondmajorfunctionof the targetquadrant(the firstbeingthe mappingprocess). There isa thirdmajorfunction,whichisnotperformedinmanyorganizations. Thatisthe processto recognize value forthe information. Whilethe value canbe mathematicallycomputed,there are many softcomponentsof the computation,anditisrecommendedthatsomethingmore akintoroyalty computationsbe utilizedforthe recognitionof informationvalue.
- 5. 5 | P a g e | A b e t t e r a p p r o a c h t o i n f o r m a t i o n m a n a g e m e n t Figure 2 | Mapping and valuing information, InfoSight Partners, 2016 Organizing torecognize informationvalue A bigpart of the targetquadrant ismanaginginformationalignedtoitsconsumptionbybusiness processesalignedtovalue propositionsasopposedtothe more commonapproachusedtoday,whichis alignedtosourcingof data. Thisis a major shiftandrequiressome new organizationalrolestoachieve thisshift. The roleswhichleadthe effortto recognize the value of informationassetsare: The ChiefData Officer(CDO),whoisaccountable forarchitectingthe mapthat linksbusiness models,informationandprocessparticipantsandnegotiatesaroyaltyrate for successfully utilizedinformation. The ChiefRisk Officer,whoisaccountable foridentifyingoperational,opportunisticand systemicrisks,includingsecurityandprivacyrisks. The ChiefInformationOfficer(CIO),whoisaccountable forcreating,maintainingandoperating the machinerythattransformsdata intoinformationanddevicesthateradicate resistanceto usinginformation. The ChiefAnalyticOfficer(CAO), whois accountable forcreatingmodels,maintainingand operatingmodelsandalgorithmsutilizedinachievingvalue propositionsandensuring repeatabilityandtraceabilityof modelsandalgorithmswhentheyare reusable. The Data Governance Council (DGC), whoisaccountable foreradicatingresistance tousing informationinprocessesdevisedtoachievevalue propositions. The Data AssetManager (DAM), whoisaccountable formanagingthe organization’s informationassets.
- 6. 6 | P a g e | A b e t t e r a p p r o a c h t o i n f o r m a t i o n m a n a g e m e n t Figure 3 | The roles leading the valuation of information, InfoSight Partners, 2016 Why is it important to manage informationdifferently In the firstof the series,we presentedthe fourthindustrial revolutionandthe relativelylonggestation periodsforeachof the industrial revolutions. Itisour positionthatwe are at the cusp of the fourth industrial revolutionandthata highlydisruptiveclimatecanbe anticipatedforthe nextseveral generations. Whatmakesthisdisruptive perioddifferentthanpastdisruptiveperiodsisthe factthat the enablerinthisfourthindustrial revolutionisinfact,information,andthose whocanwield informationwill thriveduringthisperiodof disruption.
- 7. 7 | P a g e | A b e t t e r a p p r o a c h t o i n f o r m a t i o n m a n a g e m e n t Figure 4 | The four phases of the Industrial Revolution, InfoSight Partners, 2016, The fourth Industrial Revolution, Schwab, 2016 About the Series InfoSightPartnersispublishingaseriesof writingswhichwill focuson aspectsof the age of disruptionin whichwe live,andhowto use the informationassetsof anorganizationasa catalystto thrive. Thisis the secondarticle inthe series. About the Author Mark Albala is the President of InfoSight Partners, LLC, a business consultancy which provides financial and technology advisory services devised to facilitate focus into the value of information assets. InfoSight Partners is led by Mark Albala, who has served in technology and thought leadership roles and serves as an advisor to analyst organizations and Lynn Albala, an officer of the NJ State Society of CPAs (who leads the financial advisory services offered by InfoSight Partners, LLC). Mark can be reached at mark@infosightpartners.com.