The power that information holds over an organization can be one of transformation as well as one of stagnation. How companies use and leverage their information assets can set them apart from their competitors. Yet, when we discuss quantifying the value of such information or data, things become complicated real quickly. So, can we truly define the value of enterprise information management in a way that speaks to the bottom line?
When speaking to a group of information management professionals recently, they unanimously agreed that you could, in fact, prove the value of an information management program. However, when I asked, “How so?” the response was ambiguous in nature, with, “It depends.” Certainly, it does—depending on whom you are talking to.
Information managers have a very unique opportunity at this very moment to learn from the lessons of the document and content management industry—an industry that is being revolutionized by service-based business strategies. C-suite leaders are recognizing that customer service and experiences are competitive differentiators, taking the organization’s document management investments from the back office to where the business makes its money. Can information management do the same? The shift in customer preferences and the increasing control in which they dictate how they want to interact with a company effectively connected document and content management to a core competency of the business—marketing and sales. Linking content management to the complete customer journey proved its business value. Where the difference lies is that information managers should be much more proactive in finding as much value from their information assets as they can, without relying on an external catalyst to do it for them.
The trick is to define value from a 10,000-foot strategic perspective. When you do so, you shake off siloed priorities and goals. Today, companies care about profit margins, competitive positioning and speed to market and, increasingly, corporate social responsibility. So, in this light, what is “value?” According to Michael Porter in his book Competitive Advantage: Creating and Sustaining Superior Performance, “In competitive terms, value is the amount buyers are willing to pay for what a firm provides them. Value is measured by total revenue, a reflection of the price a firm’s product commands and the units it can sell.”
So, if value is based on revenue, what is an organization’s value chain? According to Porter’s concept, “The relevant level for constructing a value chain is a firm’s activities. The value chain displays total value and consists of value activities and margin. Each value activity also uses and creates information.” Here is why information is a powerful asset. If you can calculate a numerical value to show how an activity is performing, via information assets, then you can show “whether a firm is high or low cost compared to competitors.” Yet, it’s not just about these raw numbers. If you can’t create context around the data on how it improves your processes, technologies and business goals, you’re just an organization with a lot of information but not much else. “The speed with which you can convert data into insight and that insight into action is now the defining characteristic of competition,” says Tony Costa, senior analyst serving customer experience professionals at Forrester Research.
In reality, this is a tall order. While business leaders might account for their information assets in rigorous fashion, are they really assessing the “value” of those assets? So, going back to Porter’s concept, is the data used to measure revenue? According to Gartner Vice President and Distinguished Analyst Doug Laney, he believes that “less than five percent of enterprises accurately calculate the value of their data, measure its benefits or properly inventory their information.”
The problem with information is that it’s not an end in itself. It supports actions or decisions within an organization. Perhaps, this is why we see risk as the biggest motivating factor for information management programs. There is a consequence for non-action or indecisiveness in funding a program. That’s concrete. However, we need to focus more on “value” and the value activities that create competitive differentiation. It’s not just about consequences—but benefits.
That’s where we’re stuck. We know that we need data to support value propositions to corporate strategies and competitive positioning—in order to sell your programs. Information managers need to (a) understand the business value (i.e., how you make money as a company), (b) how information feeds the value activities to create said value and (c) how to present those values to the C-suite, creating business context around data. It’s no surprise that these calculations are hard to find. It will require innovative and brave information managers to take this step into the future. We believe so strongly in this mission that we are hosting an exclusive working group at the DOCUMENT Strategy Forum to create these valuations. No more, “What if? The time is now to show what the value of information management is to the business. We hope to see you there.
Allison Lloyd serves as the editor of DOCUMENT Strategy Media. She delivers thought leadership on strategic and plan-based solutions for managing the entire document, communication and information process. Contact her at allison.l@rbpub.com or follow her on Twitter @DOCUMENTmedia.
When speaking to a group of information management professionals recently, they unanimously agreed that you could, in fact, prove the value of an information management program. However, when I asked, “How so?” the response was ambiguous in nature, with, “It depends.” Certainly, it does—depending on whom you are talking to.
Information managers have a very unique opportunity at this very moment to learn from the lessons of the document and content management industry—an industry that is being revolutionized by service-based business strategies. C-suite leaders are recognizing that customer service and experiences are competitive differentiators, taking the organization’s document management investments from the back office to where the business makes its money. Can information management do the same? The shift in customer preferences and the increasing control in which they dictate how they want to interact with a company effectively connected document and content management to a core competency of the business—marketing and sales. Linking content management to the complete customer journey proved its business value. Where the difference lies is that information managers should be much more proactive in finding as much value from their information assets as they can, without relying on an external catalyst to do it for them.
The trick is to define value from a 10,000-foot strategic perspective. When you do so, you shake off siloed priorities and goals. Today, companies care about profit margins, competitive positioning and speed to market and, increasingly, corporate social responsibility. So, in this light, what is “value?” According to Michael Porter in his book Competitive Advantage: Creating and Sustaining Superior Performance, “In competitive terms, value is the amount buyers are willing to pay for what a firm provides them. Value is measured by total revenue, a reflection of the price a firm’s product commands and the units it can sell.”
So, if value is based on revenue, what is an organization’s value chain? According to Porter’s concept, “The relevant level for constructing a value chain is a firm’s activities. The value chain displays total value and consists of value activities and margin. Each value activity also uses and creates information.” Here is why information is a powerful asset. If you can calculate a numerical value to show how an activity is performing, via information assets, then you can show “whether a firm is high or low cost compared to competitors.” Yet, it’s not just about these raw numbers. If you can’t create context around the data on how it improves your processes, technologies and business goals, you’re just an organization with a lot of information but not much else. “The speed with which you can convert data into insight and that insight into action is now the defining characteristic of competition,” says Tony Costa, senior analyst serving customer experience professionals at Forrester Research.
In reality, this is a tall order. While business leaders might account for their information assets in rigorous fashion, are they really assessing the “value” of those assets? So, going back to Porter’s concept, is the data used to measure revenue? According to Gartner Vice President and Distinguished Analyst Doug Laney, he believes that “less than five percent of enterprises accurately calculate the value of their data, measure its benefits or properly inventory their information.”
The problem with information is that it’s not an end in itself. It supports actions or decisions within an organization. Perhaps, this is why we see risk as the biggest motivating factor for information management programs. There is a consequence for non-action or indecisiveness in funding a program. That’s concrete. However, we need to focus more on “value” and the value activities that create competitive differentiation. It’s not just about consequences—but benefits.
That’s where we’re stuck. We know that we need data to support value propositions to corporate strategies and competitive positioning—in order to sell your programs. Information managers need to (a) understand the business value (i.e., how you make money as a company), (b) how information feeds the value activities to create said value and (c) how to present those values to the C-suite, creating business context around data. It’s no surprise that these calculations are hard to find. It will require innovative and brave information managers to take this step into the future. We believe so strongly in this mission that we are hosting an exclusive working group at the DOCUMENT Strategy Forum to create these valuations. No more, “What if? The time is now to show what the value of information management is to the business. We hope to see you there.
Allison Lloyd serves as the editor of DOCUMENT Strategy Media. She delivers thought leadership on strategic and plan-based solutions for managing the entire document, communication and information process. Contact her at allison.l@rbpub.com or follow her on Twitter @DOCUMENTmedia.
