In a recent post on TechRepublic entitled, “Understand your value as an IT Partner,” I introduced the concept of an IT Value Pyramid. Inspired by the wisdom hierarchy, I created this pyramid to reflect the progression information management leaders should be making to reach the optimum state of partnership within the organization. Like Maslow’s hierarchy of needs, each level builds upon the next.
(click to enlarge)
Let’s begin with the Data Supplier. At this level, the leader is responsible for collecting and organizing data. This is a fundamental first step in bringing value to the organization, but represents no true partnership with the organization. Instead, the organization looks at your organization as a very basic service. Transactional systems will be bought, built and / or customized to collect data that’s filtered into the company, typically driven by operations strategically, but often funneled through the Finance organization. For instance, when orders are processed, they need to be stored somewhere, and the company instinctively realizes this, but doesn’t have the time or the inclination to really care about the details. That’s where the Data Supplier comes in. You keep the data around, because it makes sense. When they (i.e. anyone else in the organization) need the data, you get if for them and / or try to make it easy for them to retrieve with simple, siloed reporting.
The Information Provider
At some point, the organization will realize that there’s power in connecting the dots between the different stovepipes of data within the organization. When embraced, the IT leadership graduates from Data Supplier to Information Provider. I was talking with a mid-sized company that rents tools to electrical companies. They had good sales data, and they had good inventory data, but the two weren’t connected. As a result, they were often selling into situations where they had no inventory to fulfill. On the other side of the problem, they were unintentionally stockpiling inventory and incurring extra costs, without informing the sales people that they should be pushing certain products. Both situations were bad, and could be fixed with proper data warehousing and business intelligence.
The Information Provider starts considering architecture for strategic reporting. They build operational data stores that cleanse and coalesce data into operational master data marts that represent the “single source of the truth.” An example would be a 360 degree view of the customer; collecting data from sales, order management, and customer service; resolving conflicts between the systems; and publishing the data in a centralized way. They also build data warehouses and data marts that intelligently organize the data into proper subject domains, with advanced dimensional reporting, change data capture, and historical tracking.
Although the Information Provider really ramps up the value provided to the company, there’s still very little partnership with the organization. Oddly enough, it’s not surprising to see this function still routed through Finance, which itself is not a strategic function, and not viewed as a partner to the organization. So although a significant amount of value is being generated, and beginnings of partnership leverage are being formed, organizationally it’s not realized. You’re just a service provider of another service provider. The reasoning has more to do with the model than the value.
The Knowledge Advisor
Unfortunately, a lot of companies today stall at Information Provider, but some will advance to Knowledge Advisor. The transition from information to knowledge involves learning, that is learning from the past. One of the huge advantages of having a data warehouse, is the ability to track data as it changes over time. This is something a transactional system cannot and should not do. Even an operational data store may retain some data for operational reporting, but the real wealth of information, from a historical standpoint, lies within the data warehouse. Once companies realize, and start embracing this power, information turns to knowledge. They look at historical trends to explain things about their company that couldn’t be explained without that perspective.
The Knowledge Advisor will actually start consulting with the business. They’ll typically be directly supporting strategic functions like operations and marketing, instead of being funneled through Finance (although they still might support Finance). The critical strategic functions will start asking the IT organization, “What do you think?” And, the IT organization will have the power to provide a well informed response. The IT organization might also get direct requests from the executive staff for an executive dashboard, or the engine to drive their balanced scorecard. This is a significant advance for the IT organization—but it’s still under the modus operandi of a service operation. This organization is not primarily responsible for the analytic function of the company; however, they are sometimes the customers of the IT organization.
The Wisdom Partner
The Wisdom Partner is what Maslow would call the “self-actualization” of the IT organization, and represents a true partnership platform with the organization. The difference is significant, both in organizational form and engagement. Organizationally, the organization (you might not even call it IT at this point), contains the analytic function of the company. This organization can not only trend, but forecast, and create predictive models. The seasoning of historical data, coupled with the powerful analytical capacity to synthesize, infer, and forecast, puts the company’s wisdom in the hands of this organization. This is an invaluable partner that cannot be easily replaced or outsourced.
The Data Supplier
Let’s begin with the Data Supplier. At this level, the leader is responsible for collecting and organizing data. This is a fundamental first step in bringing value to the organization, but represents no true partnership with the organization. Instead, the organization looks at your organization as a very basic service. Transactional systems will be bought, built and / or customized to collect data that’s filtered into the company, typically driven by operations strategically, but often funneled through the Finance organization. For instance, when orders are processed, they need to be stored somewhere, and the company instinctively realizes this, but doesn’t have the time or the inclination to really care about the details. That’s where the Data Supplier comes in. You keep the data around, because it makes sense. When they (i.e. anyone else in the organization) need the data, you get if for them and / or try to make it easy for them to retrieve with simple, siloed reporting.
The Information Provider
At some point, the organization will realize that there’s power in connecting the dots between the different stovepipes of data within the organization. When embraced, the IT leadership graduates from Data Supplier to Information Provider. I was talking with a mid-sized company that rents tools to electrical companies. They had good sales data, and they had good inventory data, but the two weren’t connected. As a result, they were often selling into situations where they had no inventory to fulfill. On the other side of the problem, they were unintentionally stockpiling inventory and incurring extra costs, without informing the sales people that they should be pushing certain products. Both situations were bad, and could be fixed with proper data warehousing and business intelligence.
The Information Provider starts considering architecture for strategic reporting. They build operational data stores that cleanse and coalesce data into operational master data marts that represent the “single source of the truth.” An example would be a 360 degree view of the customer; collecting data from sales, order management, and customer service; resolving conflicts between the systems; and publishing the data in a centralized way. They also build data warehouses and data marts that intelligently organize the data into proper subject domains, with advanced dimensional reporting, change data capture, and historical tracking.
Although the Information Provider really ramps up the value provided to the company, there’s still very little partnership with the organization. Oddly enough, it’s not surprising to see this function still routed through Finance, which itself is not a strategic function, and not viewed as a partner to the organization. So although a significant amount of value is being generated, and beginnings of partnership leverage are being formed, organizationally it’s not realized. You’re just a service provider of another service provider. The reasoning has more to do with the model than the value.
The Knowledge Advisor
Unfortunately, a lot of companies today stall at Information Provider, but some will advance to Knowledge Advisor. The transition from information to knowledge involves learning, that is learning from the past. One of the huge advantages of having a data warehouse, is the ability to track data as it changes over time. This is something a transactional system cannot and should not do. Even an operational data store may retain some data for operational reporting, but the real wealth of information, from a historical standpoint, lies within the data warehouse. Once companies realize, and start embracing this power, information turns to knowledge. They look at historical trends to explain things about their company that couldn’t be explained without that perspective.
The Knowledge Advisor will actually start consulting with the business. They’ll typically be directly supporting strategic functions like operations and marketing, instead of being funneled through Finance (although they still might support Finance). The critical strategic functions will start asking the IT organization, “What do you think?” And, the IT organization will have the power to provide a well informed response. The IT organization might also get direct requests from the executive staff for an executive dashboard, or the engine to drive their balanced scorecard. This is a significant advance for the IT organization—but it’s still under the modus operandi of a service operation. This organization is not primarily responsible for the analytic function of the company; however, they are sometimes the customers of the IT organization.
The Wisdom Partner
The Wisdom Partner is what Maslow would call the “self-actualization” of the IT organization, and represents a true partnership platform with the organization. The difference is significant, both in organizational form and engagement. Organizationally, the organization (you might not even call it IT at this point), contains the analytic function of the company. This organization can not only trend, but forecast, and create predictive models. The seasoning of historical data, coupled with the powerful analytical capacity to synthesize, infer, and forecast, puts the company’s wisdom in the hands of this organization. This is an invaluable partner that cannot be easily replaced or outsourced.
The Wisdom Partner directs the company in all things related to data, information, knowledge, and wisdom, because that’s their domain of responsibility. The organization doesn’t run the company—there are other strategic functions as well—however, this organization is part of the strategic brain-trust of the company. They provide not only advice, but direction on what the company should do. They are not challenged in their domain, they are the wisdom of the company.
Evaluate where your organization is on the IT Value Pyramid, and start thinking about ways you can move your organization up to the top.
John Weathington is President and CEO of 