Data Centers

Don't confuse data with intelligence

Facts, figures, and complex calculations based on data are important, but they are not intelligence.

The amazing recent events in the Middle East have brought home an important distinction between data and intelligence that is particularly relevant for IT and organizations as a whole. For the United States in particular, the Middle East has been an area of intense focus over the past decade. Since the end of the cold war, the United States has ramped up its data gathering, diplomatic efforts, and outreach toward the Middle East, investing millions of hours and billions of dollars in the region. Yet the response to the recent popular uprisings sweeping the region seems one of mild shock at best and borderline ineptitude at worst. With all this investment in data gathering, how could we have not seen this coming?

We often confuse data with intelligence. Facts, figures, and complex calculations based on them are important, but they are not intelligence. In effect, data provide information about the past, while intelligence provides information about the future. Intelligence often relies on these data, but having all the data in the world does not give you any intelligence advantage if they are not used correctly.

While I don't know what led to what seems like a dearth of intelligence about what was happening in many of these Middle Eastern countries, I have seen several cases of businesses that have confused data with intelligence. Many executives and leaders are encouraged and rewarded for being "data driven." This can be a very effective strategy when internal and external factors remain in a steady state; effectively you become better at playing a game with fixed rules. Where this falls apart is when the rules change.

We talk endlessly about data in IT, and many of us have spent portions of our career cleaning data or corralling reams of data into a data warehouse application, yet often the return on these investments is not what was planned. Many technology vendors recognized the symptoms of the problem of data versus intelligence, but rather than encouraging the difficult questions in fixing the problems, they played a semantic game and started calling their data warehouse packages "business warehouses" or even "business intelligence" packages.

Many of the tasks we associate with data lend themselves to a technology-oriented solution. Our systems and processes are geared toward moving massive amounts of data, and once we've consolidated and correlated them into a warehouse of some sort, we tend to pat ourselves on the back and consider our company more intelligent. However, as painful as deploying all this technology may be, it is only the first step toward a truly intelligent business, much as painstakingly gathering books about a particular topic and placing them on your bookshelf does not actually impart any skills or knowledge to the collector until he actually reads them.

"But what about the thousands of reports and ad hoc queries and other wizardry our data warehouse offers?" one might ask. If these reports and queries are designed primarily to analyze past performance, then you're looking at yesterday's news. Once the data are marshaled, true intelligence results from having the right people looking at the data and having tools that allow them to do two things:

  1. Monitor a handful of key indicators that notify them that the "rules of the game" might be changing, and
  2. Provide tools that allow them to simulate different new rules and develop strategic and tactical plans to be successful under the new rules of the game.

While there has been an increasing emphasis on all manner of dashboard applications attempting to accomplish the first point, there is a tendency to focus on the wrong metrics, on too many of them, or on drilling down to such detail that one misses a fundamental change to the external environment.

Not painstakingly and methodically considering the two points above usually is due to the bane of many IT projects: the company effectively "outsourcing" what should be a business project to IT, merely because there are boxes and wires involved. While data gathering and consolidation may be well within the realm of IT, the true intelligence work must be driven by leadership. Until then, you're only left building an ever larger pile of yesterday's news, without any real intelligence.

About

Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent ...

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