Exploiting Corporate Information Assets - Market Research Reports

Summary:

The asset of information is generated by every organization on a continuous basis, and yet in many cases this asset is simply being filed away and forgotten, or even disregarded completely. Some organizations cannot even see, much less measure, this asset, and, as a direct result of this lack of oversight, remain mired in slow processes, and are only capable of delivering limited levels of service to internal, as well as external, customers.

It is therefore essential that organizations recognise information as an asset – something that has value, is measurable, and which can be utilized, like any other asset, to further the fulfillment of the organization’s strategy. Although there is some recognition of the importance of information, few organizations have a clearly defined strategy for information, or formally evaluate its worth to the enterprise. Neither is there an accepted convention for including information assets on a company’s balance sheet.

The advantages of exploiting corporate information assets are diverse, as the concept of information usage touches upon every operational aspect of the organization. In theory, therefore, it is possible to feed captured information back into processes at almost any point in order to make them more informed and intelligent. Obvious examples of benefits include the ability to learn more rapidly from mistakes, react more dynamically to shifts in the market, and increase productivity in areas such as collaborative development of new products and services. The value proposition for an information strategy will certainly vary from organization to organization, and one of the intentions of this Report is to help indicate which operational areas would benefit the most from such an initiative.

BUSINESS ISSUES
The fundamental role of information is to reduce the uncertainty of decision-making – in a world where one had perfect information there would be no decisions to be made, because there would be no uncertainties. Clearly this is not the prevailing state of affairs, so at both an individual and an organizational level, we aim to acquire more information to reduce the degree of uncertainty. The problem therefore becomes a cost and value equation – when does the cost of acquiring further information outweigh the advantage to be gained.

Traditionally, most organizations have sought to use IT for process automation, and to reduce labor costs, rather than specifically to manage and exploit information. Process automation is an area of diminishing returns from an IT perspective, and with more than two-thirds of the value of an organization being represented by its information assets, including its brand, its processes, its intellectual property, its knowledge base, and its human capital, it is logical that the application of IT should focus on these areas.

A part of the problem is the fact that information is such a pervasive element of operational processes, in public as well as private sector organizations, and is generated, used, and disposed of across every department. It follows that no single system, solution, or process can fully define, much less manage, the information flow. To date, this has made it difficult to determine value in a consistent manner, and also to ensure that the relevant information can successfully make any required transitions across multiple systems and processes.

A major issue to be taken into consideration is that cultural issues impact significantly upon the use of information, and it is essential to position knowledge workers as being stakeholders in the success of an information strategy. If this step is not taken, then there is a strong possibility that they will sabotage the initiative, whether deliberately or accidentally. Either to protect their own jobs, or through ignorance of new working conditions, employees are likely to fall back on established ways of completing processes that they are responsible for, and this will severely undermine the information strategy. This problem is not unique to Exploiting Corporate Information Asset (ECIA) initiatives, but has a particular impact here, and organizations that fail to account for it from the outset will suffer the consequences.

TECHNOLOGY ISSUES
From a technology perspective, information should not be treated in isolation and the design of information-processing systems should form part of a wider enterprise architecture framework. Key applications include BI, performance management, ECM, BPM, collaboration, and portals. These will be underpinned by a software infrastructure that is capable of presenting a comprehensive set of business services, integrates information from disparate applications, and combines these capabilities through the definition and execution of business processes.

BI defines a broad category of applications for gathering, analyzing, and reporting on data, to support business decision-making. The recent Web-enablement of BI applications has delivered these capabilities to a much broader audience and is a classic example of how information mobility can have a powerful effect on an organization’s way of working. Organizations should look to build BI capabilities into business processes, paying particular attention to the creation of a closed-loop feedback mechanism, and the ability to detect and react to events within operational systems.

These same capabilities are being used to support more sophisticated performance management systems at an enterprise level, which combine key performance indicators generated by business intelligence applications with the traditional disciplines of budgeting and forecasting. This provides senior executives and line-of-business managers with a customized view of the business parameters and performance appropriate to their role, and forms part of the overall management control system.

ECM is concerned with the effective capture, processing, and storage of all information types, with an emphasis on providing a convenient framework for information retrieval and utilization. ECM has become a key technology as it has expanded to include many of the key information sources within the organization, including e-mail, working documents, formal legal and historic records, and Web pages.

In information terms, BPM can be considered as an integration technology: it supports the design, execution, and analysis of an organization’s key processes, and is capable of linking together information from applications such as ECM, with analysis and performance data from BI systems, in a business context that meets the needs of the employee. It may also support information collaboration within the defined process. Analysis of the data generated during process execution is an important input for process improvement, and provides information for operational decision-making.

Because many decisions require collaboration between individuals, technologies to support this process have gained in importance, particularly because organizations are increasingly using distributed models of working. Formal collaboration solutions can support applications such as e-learning and on-line meetings, but a more fundamental requirement is for collaboration features to be built into the everyday working environment. It is also important from an information perspective to capture, as far as possible, the output of the collaborative process to build up the organization’s knowledge base.

Portals are progressively becoming part of the software infrastructure, but their role in personalized information delivery should not be overlooked. One of the critical aspects of an information strategy is the speed with which information can be accessed or delivered to support business decisions. A portal helps to combine disparate information sources into a single presentation that can be customized to the specific requirements of the individual.

The demand for reliable levels of data quality also underscores the success (or indeed failure) of information strategy and this is an area where many organizations have struggled in recent years. If the organization expects to reap rich rewards from any information strategy, data quality must be treated as a business problem rather than an IT problem, and organizations must recognise that investment in data quality can produce a positive return on investment.

MARKET ISSUES
One might expect that information technology is a primary contributor to managing and exploiting information assets, but closer examination throws up a paradox that has generated considerable debate. If IT has been successful in this respect, we would anticipate information costs to have reduced as a percentage of an organization’s overall costs, whereas in fact the opposite has been true – although total costs have declined over the last 50 years, information costs as a proportion have risen significantly.

Technology certainly has a role to play in supporting these activities, but must be driven by a clear understanding of the role of information, and how the organization intends to benefit from it (i.e., its strategy). In simplest terms, we can think of data (the raw material) being transformed by business rules (contained within software applications) into the information required to deliver that strategy. The strategy itself, and particularly the metrics used to measure information, must be embedded within the relevant technology solutions. For example, where collaboration or data analysis form part of an organization’s strategy for a specific process (such as new product evaluation), then these capabilities should be part of the process itself. Similarly, if an information source has been identified as an essential input to a particular business control point, it should be intrinsic to that activity.

The market for information management solutions is very broad, but this report believes that the use of IT to exploit information is in practice still in its infancy. It is therefore less important to focus on a specific technology category, than to establish a set of core capabilities that support an information strategy. These include elements such as information capture, storage, collaboration, search and retrieval, integration, categorization, transformation, presentation, measurement, and analysis.

Specific solutions must therefore be evaluated against these criteria, and against their overall contribution to the information strategy. Organizations should first and foremost look to exploit existing IT investments as part of this strategy, rather than immediately seeking brand new solutions that will themselves require integration. Once an information framework has been defined, an audit and gap analysis can be generated to indicate where further investment may be required.

Many vendors are now demonstrating a better understanding of information management requirements, and we are beginning to see many of the aforementioned capabilities being incorporated into different product categories – search and collaboration are two good examples. However, there is still considerably more progress required, particularly in building information measurement capabilities into applications.

In the current climate, compliance with information-related legislation and regulations is one of the most powerful drivers for the adoption of information management technologies. An effective information strategy is essential for organizations to protect themselves against the risk of failure to comply with legislation, and has therefore become an ‘easier sell’ to the Board. In the longer term, whilst these threats must continue to be addressed, competitive advantage will be gained by those organizations that are able to define an effective strategy to exploit information, and take full advantage of the Information Age.