There is a big gap between the perceived ability of organizations to unlock the value in their information on one hand and the reality on the other.
This goes for, among others, the needed strategy and governance requirements, analysis capability, skills, tools and information management maturity to fully unlock that potential. In other words: a large majority of organizations isn’t capable of extracting value from their information, even if business leaders realize it’s important and in many cases – wrongly – think their organizations are capable to extract that value.
Numerous reports emphasize this de facto gap. In 2015, for instance, PwC and Iron Mountain conducted research to understand how organizations across the globe are capable of truly managing their information in an end-to-end way with a focus on the creation of value and competitive advantages. The findings are far from positive.
What You Will Learn
Extracting value from information: an ongoing mission
It’s clear that information management excellence and maturity are core drivers of optimization and transformation on the level of various business and customer/stakeholder aspects such as innovation capacity, customer experience excellence, competitive benefits as such etc. Information was always a driver but now it is far more so and in the years ahead the role of information will grow faster than ever.
Based on the research, Iron Mountain and PwC created a first-ever so-called Information Value Index. Attention though: the index is not about the valuation of information as such (this is where infonomics would come in) but serves as a comparative index, measuring how well (or poorly) businesses across various countries manage their information for competitive advantage.
The most important take-away for us is that only 4 percent of businesses seem able to extract full value from the information they hold. In other words: according to the PwC and Iron Mountain research virtually all organizations (what is 4 percent after all?) have a way to go before they can extract that full value. Again: this is regarding the information they hold which means that the information available in other ways isn’t taken into account (but it is becoming increasingly important).
There is a clear business need to unlock the value tied up in information. To do so, businesses must foster a culture that supports the development of a long-term information strategy and embraces a comprehensive governance framework. The need becomes even more apparent as business units take direct ownership of assessing how to make information work for them by using innovative technologies. Source.
Obviously, extracting FULL value is not that easy to achieve and it’s important to have an information management capability whereby value is extracted from information where it matters most for the business and the various stakeholders first. The ability to extract full value in that sense is an ongoing mission in a rapidly changing world.
Information management and the value/benefit challenge in numbers
However, the results of the research are all the more worrying when we see that 43 percent of businesses obtain little TANGIBLE benefit from their information and, worse, 23 percent derive NO BENEFIT WHATSOEVER.
Simply said this means that for nearly a quarter of businesses, information management delivers zero results if we look at it from the value and benefit perspective. Or in other words: for those organizations holding information seems to be merely a cost (as you need to invest to hold it).
These findings that have been confirmed (regardless of the exact percentages) in so many similar surveys which looked at the de facto information management and value extraction capacity or information management capability of organizations, are frightening. They should be really frightening for the concerned businesses and organizations that want to thrive and survive in the digital transformation economy, let alone the next stage of the information age, where information – and the ability to unlock value from it – is fundamental, business-critical and an economic good as such for the information leaders.
The research clearly showed a gap between what business leaders believe regarding this ability to make the most of their information and the reality. Or, to quote from the paper (PDF opens): “Many organizations are confident that they have the capability to extract value from their information for commercial and operational advantage. Our analysis shows, however, that this confidence is largely misplaced“.
Other note-worthy findings from the “Seizing The Information Advantage” report:
- 76 percent of businesses fall into what the report calls the misguide majority category: businesses that, quote, “are either constrained by legacy, culture, regulatory data issues or simply lack any understanding of the potential value held by their information. They have little comprehension of the commercial benefits to be gained and have therefore not made the investment required to obtain the information advantage”.
- 36 percent of businesses lack the tools and skills they need to extract full value from the information they hold. Data analysis capacity is an issue. 27 percent of European and 22 percent of North American businesses don’t employ data analysts to extract value from information.
- Not knowing what information is not valuable. 28 percent of respondents don’t believe they know how information flows through the business and where it’s most valuable.
- Protecting what matters. 21 percent don’t believe they know how information flows through the business and where it’s most vulnerable.