Warning: A non-numeric value encountered in /home/msightan/public_html/wp-content/themes/Divi/functions.php on line 5837

If the area responsible for the purchase and operation of the ovens for a cookie company were also responsible for the quality of the cookie ingredients, would you expect to love the cookies?

Aspirations in data and analytics are everywhere today, with the growing realization that effective use of information is critical to achieving business success. Yet even with much investment and efforts in the best tools and resources, conflicts and silos are all still too commonplace in data and analytics.

It is also interesting that data is often organizationally framed as an adjacency to technology. Recent high-profile data breaches and new regulations have forced information risk management into one of the top priorities for many organizations. The management and governance of information are being addressed today primarily from the technology point of view, with a heavy focus on risk (security and privacy) and compliance. While the need for risk management and compliance is unquestionable, the currently prevailing approach does this outside of the context of the business need for information, or, independently of value of the information to the business; that is, it only addresses the need to manage the information supply chain and not information value chain.

While no analogy is perfect, we can find a pretty good one in something we may all appreciate—cookies:

  • Data are the ingredients to the insights, as the flour, the butter, etc. are the ingredients to the cookies.
  • Analytical development results in how to formulate the explanations that lead to insights from the data, just as recipe development results in how to formulate cookies from the ingredients.
  • Technology stores, transports, and provides the tools to transform the data into insights, just as appliances and vessels store, transport, and provide the tools to mix and bake the ingredients to produce cookies.
  • The business user consumes the insights, just as the consumer (buys and) eats the cookies.

The cookie value chain is complete when the cookie is consumed; without consumption of cookies, the value chain and its components have no reasons to exist other than for academic or scientific reasons. To ensure that the value chain generates the desired value, the responsibility of each component must be owned by the people who understand the impact of their expertise to the end consumer. As consumers, we understand that while the butter is stored in refrigerators, refrigerator technicians are not experts on butter, and we understand that cookies are baked in an oven does not make oven technicians experts on recipe development.

In contrast, the data responsibilities and even analytics responsibilities often fall under IT. On the surface this seems reasonable since technology often generates the data as well as provide key capabilities in tools and environment throughout the supply chain. However, there are at least two challenges with this approach: first, it assumes custody means expertise, and second, it is designed to manage only the information supply chain, stopping short of managing the value. And dual roles are rarely as effective in practice as intended in a value chain.

It does not have to be complicated. In fact, far too often the fundamentals become lost in the focus on implementing the details of information management. Also, a change in responsibilities and ownership does not necessarily mean a change in organizational structure. Of course, all this needs to be done in the way that best suits the organization and its business goals, and the Human Resources department should play a huge part.

Finally, none of this means that the information supply chain does not need to be managed; rather, information risk management and compliance and the general supply chain must be an integral part of the larger strategy and management of the information value chain. After all, what is the importance of the tightly managed appliances if no cookies are consumed?