Information is arguably one of the most important currencies of business success.
For example, a business is unlikely to be able to survive let alone succeed unless it:
- Knows what its customers are purchasing and where its customers are
- Understands the profitability of those customers and of its individual products or services
- Is able to track its sales and financial income as well as expenditure
- Has some understanding of where new potential clients are
- Is able to track other developments in the marketplace, including what its competition is doing
All of these examples and perhaps hundreds more like them, stress the importance of information to any company whether large or small.
Although the nature of information may vary considerably depending upon which area of the business is being discussed, all information shares certain common characteristics:
- It has to be captured and stored somewhere
- Once in place, it needs to be readily accessible and maintainable
- The way it is stored needs to facilitate its use in various modelling and other interpretive scenarios. Data that sits passively doing nothing because it is too difficult to access and use is arguably useless
- The individual elements recorded need to be relevant to its target purpose. For example, trying to analyse your total customer information by various age ranges isn’t going to be possible unless you somehow had captured the age of individual customers at the point of sale
- Its storage and use must comply with various legal provisions
- It is vulnerable to things such as environmental disasters or technical glitches and as a result, should be backed-up
Businesses that understand how to exploit information are those that will succeed. Those that do not may well struggle.
Yet there is nothing new or exclusively information technology related in the above requirements.
Previous generations of business people would have accepted all this as simply routine and would have performed these functions, albeit labour intensively, through the use of paper records and associated paper files.
Activities such as profitability analysis, marketing, customer communications and market analysis, were all performed long before the days of information technology.
However, modern information technology systems make it faster and easier to perform these functions than was ever possible historically. Today, instead of paper files we talk about databases – essentially these are no more than repositories of information usually sitting on a computer of some sort.
Conceptually, there is no need to be intimidated by this terminology or the technology to support it. However, to maximize the potential that technology offers in this area, it might be necessary to turn to specialist database developers for appropriate expertise.