Information vs. Data
- Details
- Created on 04 October 2008
- Written by Steve Burrows
What is "Information"?
What is an "Information System"?
These are key questions that the Information Technology industry, and IT practitioners, seem very unclear about. Data is not the same as Information, yet the major thrust of the IT industry is still focused on providing and supporting Data Processing Systems, rather than Information Systems. The technologies that are sold to us as IT are presented to us as if their existence is going to make some fabulous difference to our organisations and the way we work, when in reality most of these technologies simply provide for the capture and retrieval of data.
So, what is Information? The word has many diverse and ambiguous interpretations, but a common thread through them is that information is data which has meaning within the context in which it is presented. To know that the gross margin on a sale is 73% is data - we don't have a benchmark to interpret it - but when we are told that the gross margin on a sale is 73% against a target margin of 65% it becomes information - it communicates to us that the sale in question is probably profitable.
Likewise, to a sales manager a list of 120,000 prospects is data, whereas a qualified list of 3,000 propects with a need is definitely information. The same qualified list of prospects that is valuable information to a sales manager is demoted back down to data when presented to a credit control manager. So it is relatively easy to explain the difference between data and information - data is a collection of facts - information is a collection of pertinent facts.
Information is data which has been processed and presented appropriately for the context in which it is to be used.
What then is an Information System? It must be a system which delivers data processed and presented appropriately for the context in which it is to be used. More concisely, my definition is:
An Information System is a system which delivers data with purpose.
From this we can understand how to differentiate between Information Technology (IT) and Information Systems (IS). IT is technology, it provides the engineering building blocks with which to construct systems. These systems may be Data Processing Systems or Information Systems, or even, as I will explain shortly, Business Systems. Ultimately IT is analogous to a pile of bricks and a supply of cement, it is not very interesting until an architect directs the builders at to what they should construct - IT, the IT Department, and the IT Manager / Director are useless without a design of Information System to build.
A word processor is not an Information System, nor is a spreadsheet. Both are components of Information Technology. Either may become (components of) an Information System with the introduction of a few forms and macros designed to give them a specific purpose, such as the generation of a Sales Proposal, Quotation, or Cashflow Model. The transformation of IT into IS is achieved by design for purpose [1].
What is a "Business System"?
Information Systems are systems which deliver data with purpose, as described above. Typically that purpose is to facilitate the execution of a step of a business process - it may be to send out a mailshot to a qualified list of prospects, or to create a quotation, or take an order etc. The Information System provides the data pertinent to the activity being performed in that step of the business process. In reality the role played by technology in the execution of business process is commonly much greater than the delivery of information, the systems capture and often execute the steps needed to move the business process forward - they execute business process based upon the data they hold, supplementing the actions of people who are relieved from executing the mundane predictable and repetitive steps within the business process and who are thus enabled to focus their attentions and talents on the more complex actions and decisions needed within the process. In this behaviour the Information System makes another step forward, it not only transforms Data into Information, it also executes Business Process.
A Business System is a system which executes Business Process.
Business Systems are the current goal - the logical progression forwards from Information Systems. The more day to day business process that we can automate through systems, the greater our efficiency in utilising people in the workforce. In order to achieve effective Informatrion Systems or Business Systems the designers and those supporting the systems need to understand the business processes that the systems are intended to support. The effective utilisation of IT within business depends upon the integration of the two - IT must try harder to understand Business, and vice versa.
[1] This brings us to the crux of the major problem in exploiting IT within business - how to create IS out of IT. Typically when we hire IT people we do so on their claimed credentials in administering servers, maintaining networks, supporting users etc. We don't generally hire IT people for their understanding of the sales pipeline, inventory management, distribution etc., so we should not be surprised when they fail to comprehend our purpose in processing data, and thus fail to deliver constructions of Information Technology that meet our needs for Information Systems. If we desire Information Systems we must include within the skillset a few Architects who understand our business processes in addition to understanding IT, so that they can direct the construction of systems that meet our needs. If the only IT people we employ are people who only understand IT then their valiant efforts to provide systems that suit our business purposes are likely to fail. In the jargon of the IT industry these special people who design IS for business are commonly referred to as "Business Analysts" or "Enterprise Architects" (I prefer the term "Business Engineer") depending on the level at which they work; because of their rare hybrid Business/IT skillset they are expensive, but without them IT remains IT and cannot develop to provide IS.
