Information – Converting 'Noise' into Knowledge

The Collaborative CxO

Today, organisations spend a significant proportion of their IT budgets on storing, governing and securing their corporate data. In all these efforts, it is often forgotten to capture and leverage the business value of their corporate intellectual property. Enhancing the value of information by turning it from just 'noise' into knowledge, however, is the crux for the creation of strategic advantage.

Key Insights:

IDC sees a growing trend towards collaborative technologies, to aid organisations in the provision of information sharing. However, the key is in the ability for CIO's and CxO's to work closely together and foster a culture of knowledge sharing within an organisation. With the right tools in place knowledge can be shared, transferred, and applied and it makes a significant contribution for supporting informed decisions about everything from marketing to R&D, unearthing information that is widely disseminated but buried in volume, improved decision making and strategic planning, increased versatility of the workforce, and improved customer services. As Albert Einstein once said "Know where to find the information and how to use it - That's the secret of success".

Companies that apply a proactive approach in utilising information management technologies tend to be on the quest to reduce the processes or people required to make a decision. And most importantly, these companies strive for fact based decision making that is pushed throughout the organisation as close as possible to the point of impact. Whether to the customer facing teller at a bank, the check-in clerk at the airport or to the sales representative on the road. Meanwhile, the technology followers, more often rely on their "gut feel" to support their strategic and tactical business decisions. A global IDC study conducted across 1,072 organisations in November 2007 supports this statement. CIO's challenge to manage information chaos quickly spreads to business pain felt by the CxO and the information users. Figure 1 illustrates the evolution of information utilisation.

Crossing the Knowledge Chasm

New Zealand companies have recognised the value and power of information if given in the hands of the right people. "Collaborative technologies and knowledge management" topped the list of CIO priorities in IDC's ANZ Forecast for Management Survey 2008, a strong indication that we can expect greater activity in this space. Companies that are ambitious to be amongst the leading pack, however, should also keep in mind that technology is only an enabler of knowledge management - not a means to an end. Business outcomes will require a cultural and behavioural change that will need to include a high level of 'fostering knowledge sharing'. This can only be achieved through strong buy-in and support from the executive and management teams. As Henry van Dyke once said "Culture is the habit of being pleased with the best and knowing why".

The Great Productivity Drain

Besides the inability to create a dynamic, responsive and fact-driven corporate culture, technology laggards also face a drain of business productivity. IDC's ANZ Forecast for Management survey 2008 revealed that the average information user spends 5.3 hours per week searching for internal information and 7.3 hours per week searching for external information (shown in Figure 2). These numbers seem fairly reasonable.

But here is what is wrong, the blue column indicates how much time is wasted by the average user searching for information. Almost 4 hours per week, every week, for 52 weeks of the year, wasted in futile information searching tasks. So how does this translate into dollars, quite significantly, NZ$15,750 p.a. is spent on every information user to search for information if we apply an average annual salary of NZ$50,000. Out of which NZ$4,625 is spent on users not being able to find the information they require to successfully perform their business duties. This is quite a phenomenal revelation.

Information. It's the lifeblood of the modern enterprise

Information is the lifeblood of the modern organisation in an increasingly digital world. IDC estimates that in 2008 the Digital Universe contained approximately 446,800,000,000 gigabytes (535,964 Petabytes) of data, the equivalent of 71.6 gigabytes per person on the planet. Following through with this calculation, New Zealand - with a population of approximately 4.2 million people - would account for 300,720,000 GB or 287 PB of data. And this digital universe is expanding rapidly. In fact, IDC expects it to be 10 times bigger within the next 5 years. Unfortunately, the information-lifeblood analogy breaks down under scrutiny. Information in the enterprise doesn't course effortlessly through electronic veins. Instead, it lives in structured and increasingly unstructured format on thousands of hard drives on servers, desktops and laptops, in USB memory sticks and, still, in paper files.

Information Overload Gets Physical

The explosion of data represents significant challenges for the CIOs and IT managers within our organisations. The simple task to provide sufficient storage capacity is only one of the challenges that comes alongside the digital expansion. In fact, IDC forecasts that by 2011 we will only be able to store half of the information that we will create. The shortfall in storage capacity will pressure organisations to decide what information is worth storing and what should be erased. A decision that will cause sleepless nights within the CIO community. And this is not even touching on other challenges such as information governance, disaster recovery or information security. The latter in itself will push boundaries with expected 475 million mobile internet users globally by 2012 (compared to 56 million in 2008) and 1,242 billion user interactions per day in the same year.

IDC Conclusion

Information is money - but only when it is, timely, more accurate, more relevant information, and it comes under expert insight (converting "noise" into knowledge) through a collaborative ('fostering sharing') organisation - is it indeed more money. IDC expects more and more companies to embrace this philosophy during 2009 and beyond. The technology is widely available in this flat world. It can, however, offer a never-ending series of temporary competitive advantages. Enough of these strung together will surely help a company stay ahead of its competition.