Information and data are currently two most expensive things in the world. Information is crucial for the development of companies, but it comes from data.
These two are linked through all aspects of business. Think about it, your marketing and sales teams rely on data when they’re creating strategies, but the conclusions they make from the data is actually information.
Now, having good, reliable, information is a competitive necessity, and if you don’t have it, your business will probably fail.
Information vs Data
As already mentioned above, information comes from data. Data are raw facts, while information are actionable insights. After that, knowledge comes as an integration of the information and other experiences the user had.
And finally, those who use these bits of knowledge can turn it into wisdom.
What makes information so crucial for the business? Once you know the key characteristics of information, it will be easier to understand why it’s a necessity.
Information as a resource is valuable for businesses and individuals alike. We rely on good information to complete simple daily activities, but also when we’re making complicated business decisions.
Which is exactly why we can distinguish 5 main characteristics that make information good information:
Information loses its value when it reaches the recipient at the wrong time. In order for your business decisions to make sense, the data you’re processing into information must be timely. You must be able to find information exactly when you need it, otherwise it’s worthless.
Besides being there on time, information must be “up to date” to be usable. Yesterday’s news won’t bring you any good.
Accurate information is information without mistakes and errors. But it’s also the one that’s clear, and free from bias.
Wrong, biased information can cause huge issues within a company. Let’s say that your team leader performed an employee evaluation. They aren’t very fond of that employee, they had a few disagreements in the past, so now that employee got unsatisfactory results and might be laid off because of their report.
Now, if you had accurate information, let’s say from the employee monitoring software, you would know that this employee actually did very well in the past period, and that there’s no need for extreme measures.
This can be a major or a minor issue, depending on the employee, but it could happen in any other aspect of your business as well.
In order for information to be complete and help your business decision-making it must contain answers to five main questions:
The same principle is used by journalists when they’re crafting a news story. The ideal news story should also answer all of these questions. But, why is that important in the domain of information?
Imagine getting a report with unclear file names and times, without any explanation. You won’t have any idea what it is, and you’ll need to find the person who sent it to ask questions. The whole process will be a waste of time you could have spent doing something more productive.
On the other hand, that same employee could have sent you a full report including clear file, project and employees’ names, detailing which column is related to project time, which one to time spent at work. Such report would answer all 5 questions, and you wouldn’t need to chase the employee for additional explanations.
What’s relevant for your team leaders might not be relevant to you, as a manager or business owner. You all have different job roles, different responsibilities, therefore, the information you’re getting must be relevant for those roles.
Information must be easily accessible to be valuable. Back in the old days you would have a rolodex with your client’s business cards on your desk, so you can call them. Today, there are Customer Relationship Management software which keep all information centralized. If you have remote sales and customer support teams they can access info about the customers at any point, from anywhere in the world.
What Makes Information a Strategic Resource?
Information becomes a strategic resource when it allows you to accomplish pionir advantage, or maintain competitive advantages.
The facts is that not every information will provide you with a sustainable competitive advantage. Such information must create value, otherwise it’s meaningless. On the other hand, useless information can be a competitive disadvantage, since they just clutter up the system.
Furthermore, your information must differ from competitors’ in order to be valuable. Otherwise, you’re on the same level.
Finally, the factor determining the length of your competitive advantage is how easy it is to obtain the information you have. If it’s easy to purchase, it won’t be long before someone else in your industry gets it. The longer this information stays hidden, the longer you’ll be above your competition.
By protecting valuable information, you’ll be protecting your business’ growth. You should keep in mind that information impacts different companies in different ways. Therefore, your management’s approach, process and the way they use this information will depend on the information itself, but also on your company’s general behaviour.
The development of your company relies on the way you’re balancing between strategic management and IT management. Which is why it’s extremely important that you find a way to gather information about all segments of your company, and the easiest way to do it is by implementing a remote employee time tracking software into your company.
This article was originally published on July 9th, 2016. It was updated on October 30th, 2019.