Modern Enterprise: Information, the DNA of Business

This world has been transformed in the last 30 years. Nations have understood the value of information and intelligence for eons – but in the last few decades, information, information management and information technology have become accessible to the people.

Why is information so valuable? In order to understand the importance of information, one needs to understand what it is and how it relates to People and Processes. Information inside a company is very similar to DNA. A cell in any living creature uses DNA to replicate itself in mitosis, and knows how to produce the necessary building blocks of life that sustain biological organisms. Information within a company is used to understand the company, and know the pertinent details of the input, outputs and processes within.

Information

Database Diagram Information is anything that has value to an organization. What is information? It could be anything. It could be the email mailing list of customers. It could be the product catalog which contains the details of the products, the pictures of the products, the price to partners and the price to customers. It could be the contracts that an organization has signed. Anything that is considered valuable to any person in your organization is information.

Data is different from information. Information can consist of data, but by itself data is not valuable. In order for data to have value, it has to have proper labels and those labels must mean something to the organization.

Let’s consider the following columns of information.

0 1 4 8 12 24 28 32 40 60 82 95
0 2 2 3 5 6 8 9 10 12 14 18

What do these numbers mean? What value does this data have? It really doesn’t have any – but the same data, if given some labels, creates a different perspective.

January February March April May June
Products $0.00 $1,000.00 $4,000.00 $8,000.00 $12,000.00 $24,0000.00
Services $0.00 $2,000.00 $2,000.00 $3,000.00 $5,000.00 $6,000.00
July August September October November December
Products $28,000.00 $32,000.00 $40,000.00 $60,000.00 $82,000.00 $95,000.00
Services $8,000.00 $9,000.00 $10,000.00 $12,000.00 $14,000.00 $18,000.00

Consider a person who owns a store. He records sales on a different piece of paper every time someone buys something. On each piece of paper, he writes down who bought something, that person’s phone number, what he/she bought and how much of each he/she bought, the total amount and whether it was paid by cash or credit.

If the store owner continues to do this, he is better off than if he didn’t record anything. However, if he never reviews the receipts and tabulates what is popular or who buys most often, he will never know to anticipate inventory shortages or to pitch favorite items to returning customers that spend a lot of money.

Information is a large subject to grasp. It’s better experienced through practical examples than through diagrams. The more one works with information, the more likely one is to value it, especially in the context of business. Information can best be understood in the context of People and Processes.

Information and People

If you remember, People and the “business social graph” make up the enterprise. These people all can be categorized under different categories.

In fact, the organization’s list of people is the first and most important piece of information that one can record.

If a company is storing the names, addresses and phone numbers of people, that gives it a certain level of intelligence. Let’s look at the following categories of people and see what we may want to store about them.

Employees

Every legitimate employee that works for you will have several pieces of paper in your company’s records. Employees must have signed an employee agreement. They must have filled out a W-2 or a 1099 form for the government. Beyond this, you may wish to keep on file their resume, their contact information and a record of their behavior.

Since a company’s employees are its most essential resource, it makes sense to keep details about them on file.

This information about employees is usually kept in a class of software called a Human Resources Management System (HRMS). In the past, only large corporations with a dedicated information technology team would be able to keep employee information in electronic format – but today, database software and document management repositories are accessible by non-technical people. HRMS is a highly specialized implementation of software that uses a database or a document repository.

Clients, Customers, Constituents

Depending on what service your organization provides or what it produces, it may call customers by different names.

It’s worth knowing, too, whether a person is a first-time customer, a returning customer, a happy customer or a disgruntled customer.

If a customer has bought 50 times in a year, and continues to buy week after week, there are probably good ways to get her to buy more every week. If a donor (in the case of a non-profit) or a constituent (in the case of an advocacy group) donated thousands of dollars and was never followed up with, he probably won’t donate again.

This type of information usually is maintained today in Customer Relationship Management (CRM) Systems. Similar to HRMS, CRM is a specialized database application.

Prospective Clients

Prospects, leads and potential customers re also usually maintained in a CRM. What’s the greatest benefit of storing all of this information? If there are several people working in your sales force, it would look pretty bad if they were to receive a call from two people trying to sell them the same thing from the same company.

The Greater Community

The greater community in which a company or an organization resides is the source of all of its employees, customers and clients. There are ways to interact with people in the greater community: Email mailing lists, Twitter or Facebook are all valuable methods of community engagement. Even though the community won’t affect the revenue of the organization directly, people in your organization’s community may inform potential customers of something they see on your organization’s broadcast.

Information and Processes

Collecting and storing information about people who act on the success or failure of an organization is important. Storing information for the processes that define the successes and failure of the organization is equally important. As mentioned in the article on Processes, there are several processes that make up the organization. As in DNA, information about processes helps the company know what to acquire as far as time, money and resources, and what to produce and when to produce it.

Internal Processes

  • Sales – The sales process is usually tracked in CRM systems.
  • Marketing – Marketing is usually done with online mailing list software, tied to a CRM.
  • Billing / Invoicing – in order to get paid, bills and invoices have to be created and sent. There are several systems that help companies do this.
  • Time Collection – If the revenue of a organization depends on ‘billable’ time, then collecting the amount of hours people spend on a project or a client is very important. Some of these time collection systems work with billing and invoicing systems.
  • Payroll – Employees like to get paid for the work they do for the organization. Payroll systems can pay people and take care of the taxes that need to be withheld.
  • Accounting – At some point, the owners and operators of the organization have to see the cash flow, accounts receivable, accounts payable and the balance sheet. A good accounting system will work with the payroll, billing and invoicing systems in place.
  • Project Management – A service based organization that delivers its services by including several people in a project with different phases of delivery might want to track projects, time worked on projects, the amount of work done, etc.

External Processes

  • Government – Each business or organization works in the framework provided by the government. These processes involve collecting W-2, W-9, I-9, 1099 or any other forms identifying the employee and their tax status within the organization. For the most part this paperwork is managed in paper file systems.
  • Financial Institutions – Organizations operate on money and almost no legitimate organization operates on cold hard cash. Processes such as deposits, withdrawals and loan payments deal with outside financial institutions.
  • Partner Organizations – If an organization works with others to produce products or deliver services, there are possible points of information transfer that make operating together easier. If a partner organization resells a service, they may want to know the availability of people or resources. This level of integration is not yet achieved by most, but if done properly can help scale small companies working together to great heights.
  • Vendor Organizations – It is inevitable that a company hires other companies. This starts with paying the fixed operating costs such as rent, utilities, advertising, etc. There are other processes, such as vendor procurement and vendor qualification, that deal directly with information about the vendor and what products and services they offer. Modern organizations try to integrate with vendors, similar to how they integrate with their partners.

Intelligence

The use of information within an organization is varied, but it is crucial. Companies tend to go through several phases before reaching true business modularity. Enterprise Architecture as Strategy: Creating a Foundation for Business Execution is a great book on this subject which outlines the different phases and gives great case studies on how to use information and technology. Today’s technology as it relates to information management has steadily increased in quality, usability and reliability – and it continues to drop in cost in terms of time, money and resources.

If an organization wants to grow and excel, it needs to embrace information and technology. Information or technology won’t make or break a company, but it will be a factor in it’s success. Good to Great: Why Some Companies Make the Leap… and Others Don’t is one of the best books in business. It highlights the successful traits of great companies, one of which is the ability to use technology wisely.

In an modern enterprise, the Officers in Chief are peers in the management, execution and operation of an organization. Just as important as the CEO (Chief Executive Officer) and COO (Chief Operating Officer) , are the Officers of Information (CIO) and Technology (CTO).

Business is made easier by intelligent people who can see, understand and solve problems. If an organization has information about the people it deals with and the processes it executes, it can extract intelligence using business intelligence tools and make decisions based on facts. More information doesn’t mean more intelligence, but together these are formidable characteristics for an organization striving to change the world and make it better.

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