Mind the information gap

Businesses have access to a lot more information these days - but it's not making decisions any easier...

Last Updated: 31 Aug 2010

Technology means that we have more information at our fingertips than ever before – and not just the wealth of useless trivia available online. Thanks to CRM systems, Wikis and so on, it’s never been easier to accumulate business data. Problem is, most organisations aren’t very good at translating this into better, faster business decisions.

And it’s an expensive mistake – technology consultancy Capgemini reckons this is costing the British economy a whopping £67bn a year. According to its research, organisations believe that using information more effectively would make them on average 29% more productive – which would add £46bn to the bottom line of UK plc and cut £21bn in public sector admin costs.

The issue is that business leaders aren’t getting the information they need to make decisions – two-thirds of those surveyed reckon they’re taking more than five critical decisions a week without the right information. Since they’re making more decisions they ever, and since they see a direct link between fact-based decisions and effective performance, it’s not surprising they’re worried. Instead, they’re increasingly reliant on gut feel – and although Malcolm Gladwell might argue that this is just the way we process subconscious knowledge, managers tend to feel a lot less confident about it.

These days the problem isn’t usually a lack of information – it’s the way people share it. Capgemini picks out two common faults: ‘information islands’, when information is not shared effectively between different parts of a single organisation, and ‘fragmented truths’, where a company ends up with several versions of the same data.  This isn’t good, particularly if you’re a customer-facing organisation – you end up doing things twice or trying to sell people things they’ve already got. Or, like Egg last week, you reject some customers as credit risks even though they have £100,000 in a separate account…

According to Capgemini’s Ramesh Harji, the key is for businesses to treat information as a corporate asset, just like the IT hardware they use to store it. And this might require a shift in attitudes – sometimes people don’t share information because they think it might be worth their while to know something others don’t. ‘You have to move from a culture of having to share to a culture of wanting to share’, says Harji. ‘As the UK becomes a knowledge economy, our differentiation is the knowledge we have and our ability to collaborate and come up with innovative stuff’. As you’d expect, it’s down to the leaders of the organisation to establish this mindset across the company.

OK, so thinking about your knowledge management systems probably doesn’t fill you with a huge amount of excitement. But it can clearly be very lucrative if you get it right...

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