Barriers to Exploiting the Information Asset- Published in www.businessintelligence.com November 2003

We can view data like any other tangible asset that is managed as an enterprise resource. Information has an intrinsic value (e.g., a hot stock tip, a news item, a customer purchase record), which is enhanced through processing, packaging, or presentation. By looking at all the information managed within an organization, we discover new ways to use the same bits of information to enhance many data sets across the organization.
For example, consider aggregating billing, sales, and customer support databases to provide enhancements to a Customer Relationship Management (CRM) system. A number of organizations have already discovered this, and are working to strategically merge data from multiple sources. Unfortunately, in a stove-piped organization, some of the following issues doom attempts at information sharing from the beginning.

The "Peter Principle" of Data Integrity
Dr. Laurence Peter's principle about management suggests that in an administrative hierarchy, people tend to be promoted to their level of incompetence. We paraphrase this principle with respect to data - the level of data quality rises as high as it needs to be within the organization that creates or uses that data. This implies that when other groups use that same data set, the data integrity probably won't live up to user expectations, which tends to devalue the corporate information asset.

Islands of Data Growth
In many organizations, the enterprise data environment grows out of different organizations the same way different kinds of bacteria grow in a petri dish. Each group has its own hardware, DBMS, software, etc., and these often don't reflect any kind of organizational standard. As processing power and connectivity has increased, previously isolated groups now can interoperate, leading to issues associated with the lack of organizational data standards. For example, some groups may have data tables with a column for "CUSTOMERACCT," while others refer to "ACCTNUM," "ACCOUNT," "CUSTID," which all refer to the same customer account number.

Personalization of Data Ownership
In companies that reward employees based on performance there is a tendency to allow (or even foster) internal rivalries as a motivation tool, promoting a powerful incentive to personalize data ownership. When this happens, employees tend to constrict the flow of the data they manage to any destination outside of their control as a means for improving their personal position within the organization. When individuals are able to claim ownership over a corporate information asset, it detracts from the ability to exploit that asset.

Weak or Missing Corporate Information Policies
A corporate information policy dictates how ownership, responsibility, and dispute resolution is applied when managing corporate data. Most companies don't have a well-defined information policy, and those that do seldom enforce those policies, severely reducing the possibility of exploiting the information asset.

Organizational Hierarchies Remove Incentive to Improve
Boundaries of control are defined via a corporate hierarchy, and because groups typically focus on operating within short time frames, smaller groups concentrate resources on their internal tactical goals, with little regard to issues associated with centralized assets. Therefore, there is little incentive to participate in any coordinated effort to improve anything outside the organization boundary.

Diffused Management Organization
Diffusing both control and resources limits a smaller group's ability to effect change. For example, the costs associated with data quality improvement may include a software license, maintenance, and personnel to analyze and manage a data quality program. While the benefits associated with such an investment may be spread throughout a company, the costs may exceed the budget allocated to any particular group, and the value added within the group may not justify the expense, even if other groups within the organization also benefit from the improvement.

Employee Turnover and Information Entropy
Employees are tasked with performing certain jobs, but every job has its own idiosyncrasies - organizational behavior issues, business rules, corporate policies, etc. In addition, each worker tends to leave his or her own mark on the position, exploring efficiencies in performing the job. All of this can be viewed as corporate knowledge, although this knowledge is rarely, if ever, documented or transferred in any way other than "lore." As employees leave, they tend to take their knowledge with them, although by all rights this knowledge is also a part of the corporate information asset. In the presence of this kind of knowledge entropy, it is difficult to evolve into a knowledge-aware organization.

Employee Reward System is not Consistent with Corporate Goals
Frequently those employees who are in the best position to help exploit corporate knowledge are penalized when they do apply that knowledge. For example, consider the call center employee who is rewarded based on the number of incoming calls handled. When a customer calls to cancel an account, the agent treats this call as any other customer service call, trying to finish it quickly. Yet if that agent spends extra time to help the customer and use collected customer information to retain the customer, while the company benefits, the employee is penalized when the call quota is missed.

Conclusion
The kinds of barriers that I discussed in this column don't need to be permanent ones. Each one of these issues affecting the ability to make best use of corporate information is a relic of "legacy thinking." Although one might expect that radical changes must be made to the information processing systems, it is more likely that changes to information processing thinking will have a greater effect. In a future column I will explore how we can start to address some of these issues.