Information-Driven Business: How to Manage Data and Information for Maximum Advantage

226 Pages·2010·2.76 MB·English

by  Robert Hillard

INFORMATION-
DRIVEN BUSINESS
How to Manage Data and
Information for
Maximum Advantage
ROBERT HILLARD
John Wiley & Sons, Inc.
Copyright © 2010 by Robert Hillard. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data
Hillard, Robert, 1968–
Information-driven business : how to manage data and information for maximum
advantage / Robert Hillard.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-470-62577-4 (cloth); ISBN 978-0-470-64943-5 (ebk);
ISBN 978-0-470-64945-9 (ebk); ISBN 978-0-470-64946-6 (ebk)
1. Technological innovations—Management. 2. Information technology—
Management. 3. Management information systems. 4. Industrial management.
I. Title.
HD45.H45 2010
658.4′038–dc22
2010007798
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
Contents
Preface xiii
Acknowledgments xv
Chapter 1: Understanding the Information Economy 1
Did the Internet Create the Information Economy? 2
Origins of Electronic Data Storage 2
Stocks and Flows 3
Business Data 4
Changing Business Models 5
Information Sharing versus Infrastructure Sharing 6
Governing the New Business 7
Success in the Information Economy 8
Notes 9
Chapter 2: The Language of Information 10
Structured Query Language 13
Statistics 14
XQuery Language 15
Spreadsheets 15
Documents and Web Pages 16
Knowledge, Communications, and Information Theory 17
Notes 18
Chapter 3: Information Governance 19
Information Currency 19
Economic Value of Data 21
Goals of Information Governance 23
Organizational Models 24
Ownership of Information 26
Strategic Value Models 27
Repackaging of Information 30
Life Cycle 31
Notes 32
vii
viii Contents
Chapter 4: Describing Structured Data 33
Networks and Graphs 33
Brief Introduction to Graphs 35
Relational Modeling 37
Relational Concepts 38
Cardinality and Entity-Relationship Diagrams 39
Normalization 40
Impact of Time and Date on Relational Models 49
Applying Graph Theory to Data Models 51
Directed Graphs 52
Normalized Models 53
Note 54
Chapter 5: Small Worlds Business Measure of Data 55
Small Worlds 55
Measuring the Problem and Solution 56
Abstracting Information as a Graph 57
Metrics 58
Interpreting the Results 60
Navigating the Information Graph 61
Information Relationships Quickly Get Complex 62
Using the Technique 64
Note 65
Chapter 6: Measuring the Quantity of Information 66
Definition of Information 66
Thermal Entropy 67
Information Entropy 68
Entropy versus Storage 70
Enterprise Information Entropy 73
Decision Entropy 76
Conclusion and Application 78
Notes 78
Chapter 7: Describing the Enterprise 79
Size of the Undertaking 79
Enterprise Data Models Are All or Nothing 80
The Data Model as a Panacea 81
Metadata 82
The Metadata Solution 83
Contents ix
Master Data versus Metadata 84
The Metadata Model 85
XML Taxonomies 87
Metadata Standards 87
Collaborative Metadata 88
Metadata Technology 90
Data Quality Metadata 91
History 91
Executive Buy-in 92
Notes 93
Chapter 8: A Model for Computing Based on Information Search 94
Function-Centric Applications 95
An Information-Centric Business 96
Enterprise Search 97
Security 98
Metadata Search Repository 98
Building the Extracts 100
The Result 100
Note 102
Chapter 9: Complexity, Chaos, and System Dynamics 103
Early Information Management 103
Simple Spreadsheets 104
Complexity 105
Chaos Theory 105
Why Information Is Complex 106
Extending a Prototype 110
System Dynamics 112
Data as an Algorithm 116
Virtual Models and Integration 118
Chaos or Complexity 119
Notes 120
Chapter 10: Comparing Data Warehouse Architectures 121
Data Warehousing 121
Contrasting the Inmon and Kimball Approaches 122
Quantity Implications 123
Usability Implications 125
Historical Data 132
x Contents
Summary 133
Notes 134
Chapter 11: Layered View of Information 135
Information Layers 136
Are They Real? 137
Turning the Layers into an Architecture 141
The User Interface 143
Selling the Architecture 144
Chapter 12: Master Data Management 146
Publish and Subscribe 146
About Time 148
Granularity, Terminology, and Hierarchies 148
Rule 1: Consistent Terminology 149
Rule 2: Everyone Owns the Hierarchies 150
Rule 3: Consistent Granularity 150
Reconciling Inconsistencies 151
Slowly Changing Dimensions 151
Customer Data Integration 153
Extending the Metadata Model 153
Technology 155
Chapter 13: Information and Data Quality 156
Spreadsheets 156
Referencing 157
Fit for Purpose 158
Measuring Structured Data Quality 160
A Scorecard 164
Metadata Quality 164
Extended Metadata Model 165
Notes 166
Chapter 14: Security 167
Cryptography 167
Public Key Cryptography 169
Applying PKI 170
Predicting the Unpredictable 172
Protecting an Individual’s Right to Privacy 172
Securing the Content versus Securing the Reference 175
Contents xi
Chapter 15: Opening Up to the Crowd 176
A Taxonomy for the Future 177
Populating the Stakeholder Attributes 179
Reducing E-mail Traffic within Projects 179
Managing Customer E-mail 180
General E-mail 180
Preparing for the Unknown 181
Third-Party Data Charters 182
Information Is Dynamic 183
Power of the Crowd Can Improve Your Data Quality 183
Note 184
Chapter 16: Building Incremental Knowledge 185
Bayesian Probabilities 187
Information from Processes 188
The MIT Beer Game 192
Hypothesis Testing and Confidence Levels 193
Business Activity Monitoring 195
Note 196
Chapter 17: Enterprise Information Architecture 197
Web Site Information Architecture 198
Extending the Information Architecture 198
Business Context 199
Users 199
Content 200
Top-Down/Bottom-Up 200
Presentation Format 201
Project Resourcing 201
Information to Support Decision Making 203
Notes 204
Looking to the Future 205
About the Author 209
Index 211
Preface
T his book is aimed at anyone who is in any way responsible for information.
Executives, managers, and technical staff all need to understand how to manage
this most valuable resource.
I wrote this book based on the observation that the concept of information
overload is permeating every business that I deal with. At the same time, the global
economy is moving from products to services that are described almost entirely
electronically. Even those businesses that are traditionally associated with making
things are less concerned with the management of the manufacturing process (which
is largely outsourced) than they are with the management of their intellectual prop-
erty. Increasingly, information doesn’ t provide a window on the business. It is the
business.
It ’ s a simple equation. Intellectual property is tied up in the data on computers.
If it is the subject of focused management, then greater value is extracted from that
data. If the intellectual property is a significant proportion of the value of the busi-
ness, then such a focused effort will have a dramatic effect on the value of the
business as a whole. Such an effort will also make the organization much more
enjoyable to work in with less time lost searching for information that should be
readily available and less time sifting through irrelevant data that should never have
hit the e - mail inbox.
A s business has become more complex, techniques are appearing almost every
day that seek to simplify the task of managing a large, multifaceted organization.
Their quest is similar to a physicist looking for the single unifying equation that
will define the universe. Any approach that recommends focusing on one part of
the business must use a limited set of measures that aggregate complex data from
across the enterprise. In providing a simple answer, detail and differentiation must
be lost.
A simple set of metrics by itself is no longer enough to sum up the millions or
billions of moving parts that define the enterprise. Perhaps, then, it is time to gain
a better understanding of the role of information in business.
W hile large quantities of information have been with us for as long as humans
have gathered in groups, it has taken on a whole new dynamic form. The quantity
of data has grown dramatically since the cost of computer storage dropped as it did
at the end of the twentieth century. The growth has taken business management by
surprise and the techniques that we use have not been able to keep up.
W ith little differentiation in the bricks- a nd- m ortar assets, business needs to
enhance its service and differentiate using the informational resources at its dis-
posal. The winners tailor their product to the needs of their markets. Successful
leaders have a deep insight into the running of their business. Such an insight can
come only from accurate information.
xiii
xiv Preface
I n almost every organization, one or more executives have been assigned
accountability for information governance, quality, or records. Similarly, technolo-
gists are being asked to make sense of the mountains of data that exist in databases,
file systems, and other repositories. This is a book about becoming an information -
centric business and achieving significant benefits as a result.
O ver many years, I have had the opportunity to work with hundreds of organiza-
tions in the private and government sectors. The issues that they face handling
business information have a common theme of complexity. Questions that should
be simple to answer take too long, reconciliations that should be exact aren’ t ,
privacy that should be perfect isn ’ t, and security that should be tight is porous.
Treating information as something that needs to be managed in its own right
allows a profession of information managers to develop a common approach to
information management. Without common techniques, many organizations have
been ad hoc in their approach. The most successful, though, have borrowed
approaches from other disciplines and been part of the evolution of a form of pro-
fessional consensus.
For that reason, I have been pleased over a number of years to be part of the
leadership of the MIKE2.0 initiative. MIKE2.0 (Method for the Implementation of
a Knowledge Enterprise) is an open collaboration of information management
professionals from a variety of organizations seeking to develop a common approach.
The content is entirely free under the Creative Commons licensing model. MIKE2.0
can be found at www.openmethodology.org.
I have applied the techniques in this book in some of the world’ s largest com-
panies and government departments. They have also been effectively adopted in
midsized and even small businesses. As a field grows in sophistication, so the
knowledge needed by practitioners also increases. This book provides sufficient
detail to allow anyone who deals with information to identify the right approach to
apply without trying to be a step- b y- s tep guide. Armed with the knowledge within
these pages, the reader can then adopt comprehensive methodologies like MIKE2.0
to develop detailed project plans or establish programs of work.
Each chapter introduces a concept and in many cases provides both strategic
and tactical advice. The strategic advice will help shape the future enterprise. The
tactical advice will help solve immediate challenges. The reader should be left with
the overwhelming message that information management is not the responsibility
of the information technology department, nor is it able to be governed by any one
line of business. Information is an asset with a very real economic value. It is the
responsibility of everyone who in any way creates, handles, stores, or exploits this
asset to ensure that they achieve the greatest possible value for the enterprise as
a whole.
T his is not the final book that will be written on this subject. The discipline will
continue to develop as we all find better and more effective ways to run organiza-
tions to better create, handle, and exploit information. There is no single answer
to the question on how you should manage your information resources, so apart
from the MIKE2.0 site, I also encourage readers of this book to check in at www.
infodrivenbusiness.com where additional references and comments will be posted.