In Greek mythology, ichor was the ethereal golden fluid that was the blood of the gods and immortals. So is information the golden lifeblood that runs through your organization? In APMG’s COBIT 5 Foundation course material, there are a couple of slides about the value of information. Students seem somewhat disinterested, blasé or jaundiced when shown these slides. It is now considered somewhat corny to say, “Information is the business currency of the 21st century.” And why not? We often make or hear this statement. Is it that it is so obvious or that we do not understand the profundity of the statement? Who knows? I must admit that it took me a while to get past the banality of the statement and truly understand the meaning.
So what does it really mean? Well, we create value by powerful or novel business ideas and technologies. It is the flow of information into the act of creation by managers and organizations that differentiates organizations and provides value. All business is information—amassing, creating, refining, combining, processing and delivering information.
Growth of your organization comes from creating new value for your customers. New value is created from better ideas. Ideas are, and come from, information. Information drives value, profits and competitive advantage. You may think you have a competitive advantage, but all you really have is either asymmetric or temporary access to better information than your competitors. And better information drives value and profits. Once the information is freely or widely available, you lose your advantage and, maybe, your business. What follows is that information is the fundamental unit of value in your organization. Every business is an information business—yes, even those that make durable goods—and succeeds or fails based on the extent that the organization is a superior delivery apparatus for potent and quality information.
Every business is an information business—yes, even those that make durable goods—and succeeds or fails based on the extent that the organization is a superior delivery apparatus for potent and quality information.
Information goes into all products and services, but unlike other inputs, it is not consumed in the process—acting like a catalyst—and, in reality, new information is created. We have information about the processing if nothing else. Information is retained and enhanced within the organization. Information begets information—more information, better information, more accurate information, more varied information, more specific information. As we learn in COBIT 5, this is done in an endless cycle. We never quite obtain perfect information or the expected cost is too high.
One fundamental difference with information is that it refutes the law of diminishing returns. In Economics 101, we learn the law of diminishing returns, which states that in all productive processes, adding more of something, while holding all others constant, will, at some point, yield lower incremental per-unit returns. In fact, it could lead to negative returns. But information is different. Good information always has increasing returns and infinite marginal returns. Information does not wear out or degrade in the traditional sense when it is used, but rather, increases in value when used. You can resell information over and over again. I have several clients that make good money just repackaging information for consumption. Paradoxically, when the number of users of information increases forever, its costs decrease forever.
Many organizations believe that they maintain competitive advantage because they protect their intellectual property. However, when we do not expose information beyond our organization, it loses value and we will soon find it ceases to be useful. For instance, we may have a new and improved product or idea about which we need to tell someone. Some information leakage is desirable because leakage in requires leakage out. And the former is invaluable. If your organization did not learn from information like COBIT 5 and transform your organization, then you would become irrelevant. As we learn from COBIT, information is at the very core of our processes and systems. Information is the ambrosia that sustains our processes. Sprinkle a little of the right information on a process and, voilà!, our process improves or its lifetime is extended.
So the next time someone says information is a business enabler, you should nod and smile knowingly.
Peter T. Davis, CISA, CISM, CGEIT, COBIT Foundation, COBIT Implementation, COBIT Assessor, COBIT INCS, CISSP, CPA, CMA, CMC, ITIL FC, ISO 27001 LI/LA, ISO 27005/31000 RM, ISO 20000 FC/LI/LA, ISO 9001 FC, ISO 28000 FC, ISTQB CTFL, Open FAIR FC, PMI-RMP, PMP, PRINCE2 FC, SSGB
Is the principal of Peter Davis+Associates, a management consulting firm specializing in IT governance, security and audit. He currently teaches COBIT 5 Foundation/Implementation/Assessor, ISO 27001 Foundation/Lead Implementer/Lead Auditor, ISO 31000/ISO 27005 Risk Manager (RM), ISO 20000 Foundation, ISO 22301 Foundation, ISO 9001 Foundation and Project Management Institute Risk Management Professional (PMI-RMP) courses.