What is the information footprint?

Text/Jeffrey · L. Sampleux, Michael · J. Russo.

"The information footprint is a figurative statement, and it's an increasingly important question: what information assets does your company have?" 』

How much land do you own? How many people did you hire? How big is your factory? At different times in history, these questions have had another question: How rich are you? This is because at every point in the business evolution, each of these issues touches on the core of wealth creation at the time--land, people, and machines.

Today is another period of change, as a new problem of potential wealth indicators arises: how much information do you have? The development of information technology has finally reached a sufficiently stable and inexpensive state, and pervasive, we believe that the competitive edge of the business world has begun to be based on information.

Our view is: For most enterprises, the threshold and cost of information technology is not high, it increasingly has become the potential of enterprise assets. Companies should manage it as a product, not just a by-product. In other words, technology is a tool, but information is the real source of value creation. The importance of information technology is obvious, and enterprises have invested a lot of money in it. However, as modern digital technology greatly increases the amount and breadth of information that we can collect and use, it can be said that information actually benefits from technology. People are often unaware of its existence, but it has great potential.

Internet companies such as Google and Amazon have shown us the value of creating, collecting, analyzing, and deploying information. In addition, traditional companies such as UPS and Capital One also tell us that the information generated by the transaction can be used to optimize the operation of the enterprise and promote innovation. Many companies have borrowed ideas from these companies that specialize in information technology, but we recommend a more comprehensive framework for finding and evaluating information-creating opportunities that we call "information footprints." The information footprint is a figurative statement, and behind it is an increasingly important question: what information assets does your company have?

The footprint has three dimensions: length, depth, breadth. Information footprints are no exception.

Length。 Length refers to the deployment of information outside the enterprise, which is intended to support existing business operations. This dimension includes many early information technology strategic uses, such as software to manage customer relationships, supply chain logistics, and real-time production.

The spread of information in value systems allows for better synchronization of activities and faster completion of tasks. This is because everyone has the same information--real data, not forecasts of sales or production--and works on that premise. In other words, information dissemination--the extension of the information footprint--stresses efficiency. The metrics used to measure it are the amount of time, inventory, or the extent to which the customer's convenience and satisfaction are improved. For example, UPS can track each package and share it online with customers because of improvements in information technology.

As for the length of the information footprint, the central question managers face is "what information can we collect and share with the major stakeholders in the external supply chain or value system in order to improve efficiency?" ”

Depth。 Depth refers to the degree to which an enterprise deploys information internally to improve operations. This is the initial task of the IT department in most companies. However, advances in information technology have increased the potential diversity, volume and speed of internal information flows. This can be seen in the business data analysis and the "Big data" movement.

The inputs to the details of the information allow the enterprise to gain insights into the richness of the information and thus fine-tune its various decisions and activities. Some notable success stories in this area include the fine-tuning of Capital One's credit analysis and the analysis of product specifications by Deere & Company to reduce product and sales complexity.

The goal of this dimension of information footprint is effectiveness-the use of digital technology and more detailed information to improve decision-making and transformation processes. The fundamental question for senior executives here is: what additional information do I need (or what additional information can I use) to make my current business more efficient?

Breadth。 Breadth refers to the extent to which information is deployed as a key resource or a springboard for entering new markets/developing products or services. The goal of this dimension is mainly "entrepreneurial spirit", in other words, to find ways to use information to develop new products or enter new markets.

This type of information is usually part of the enterprise's existing activities (which is one of the sources of differentiation for the new product), but this internal information can also be combined with external information.

In today's competitive environment, many companies should ask themselves a simple and powerful question: how many new businesses have we gained by leveraging information, or how much new revenue has been added? This is one of the indicators for measuring the breadth of information footprint.

Development information Footprint

A new type of enterprise with rich internal information but thin traditional assets is appearing continuously. Google, Facebook and other companies as an early example, let us start thinking about the transfer of corporate value sources. These companies provide a range of information-based services that create richer, information-driven value-added activities.

However, the managers of traditional companies should not lose confidence or feel that their companies have a bleak future in information. A range of existing activities by traditional companies can generate information-probably more than internet companies. In addition, this type of information-generating activity differs according to the specific circumstances of each company and therefore has unique value.

In other words, all companies can and should treat information as assets. In our view, when managers say "Roi" or "Traditional asset return", the "information rate of return" on the tip of the tongue, it means that information is truly an asset. At that time, companies will really move from the industrial age to the information age and begin to truly understand and build a competitive advantage based on information.

(Responsible editor: Mengyishan)