Overview

According to the PricewaterhouseCoopers Global Data Management Survey of 2001, "Companies that manage their data as a strategic resource and invest in its quality are already pulling ahead in terms of reputation and profitability." ^[1] This statement implies a quite subtle yet radical notion: Data should be treated as a strategic resource. According to a traditional view, data is the "fuel" driving the automation of a business operation, implying that a company uses computers to help run its business. The forward-looking view of data internalizes the notion that strategic knowledge is embedded in the collection of a company's data and that extracting actionable knowledge will help a company improve its business.

This leads to another intriguing idea that a company may acquire a competitive edge by viewing itself as an information business instead of taking the traditional industry or vertical view. Consider this: Is a supermarket chain a business that sells food, or is it a business that exploits knowledge about customer preferences, geographical biases, supply chain logistics, product lifecycle, and competitive sales information to optimize its delivery, inventory, pricing, and product placement as a way to increase margin for each item sold? The answer to that question (and its corresponding versions in any industry) may ultimately determine your company's long-term viability in the Information Age.

So how do you transform data into a strategic resource? A part of that process involves properly applying new technology to your data, but the most important part is being able to understand and...