Case for an Information Value Chain

Michael Porter introduced the concept of the Value Chain in his 1985 classic Competitive Advantage: Creating and Sustaining Superior Performance. He described the notion of how a product gains value by activities conducted within the chain. By assigning costs and value drivers at each step, organizations can create a framework to enable powerful analysis and insight into synchronized collaborations, both within the organization and amongst business partners. The concept has been embraced by management strategists worldwide.

Data and information required to support business functions, promote innovation, reduce costs, improve collaboration and enhance responsiveness to marketplace changes can benefit greatly by extending the same concept to establish a business sponsored "Information Value Chain".

The goal behind the value chains - improve visibility, demonstrate value that exceed costs and improve profit margins - allows organizations to strengthen its core competencies and manage competitive differentiators.

Major business data domains of Customer, Supplier (Vendor), Product (Material) are candidates that should be evaluated within the value chain. In my blog on data ownership I identified roles that should participate in each of the standardized elements of the value chain. These roles should be supported by IT roles of architects, administrators, stewards and analysts.

By creating an enterprise data strategy, identifying key information management activities within the chain and enabling performance visualization through periodically evaluated metrics, an Information Value chain will bring improved information awareness, provide actionable insight and help your organization separate information "cash cows" from investment "duds".

In the process they uncover two important truths. All data is not created equal and all data does not contribute equally to the profitability of an organization.

With these truths alone, we begin to answer a very important question. Why dedicate our resources and capital to manage all data equally if they are not equal contributors?