Total Information Risk Management

Maximizing the Value of Data and Information Assets

Alexander Borek, Ajith Kumar Parlikad, Jela Webb, Philip Woodall

• Publisher: Morgan Kaufmann
• Year: 2013
• Print ISBN: 9780124055476
• eBook ISBN: 9780124058613
• Topic: Computer Science
• Subtopic: Computer Science General
• Index: Computer Science

How well does your organization manage the risks associated with information quality? Managing information risk is becoming a top priority on the organizational agenda. The increasing sophistication of IT capabilities along with the constantly changing dynamics of global competition are forcing businesses to make use of their information more effectively. Information is becoming a core resource and asset for all organizations; however, it also brings many potential risks to an organization, from strategic, operational, financial, compliance, and environmental to societal. If you continue to struggle to understand and measure how information and its quality affects your business, this book is for you. This reference is in direct response to the new challenges that all managers have to face. Our process helps your organization to understand the "pain points" regarding poor data and information quality so you can concentrate on problems that have a high impact on core business objectives. This book provides you with all the fundamental concepts, guidelines and tools to ensure core business information is identified, protected and used effectively, and written in a language that is clear and easy to understand for non-technical managers.- Shows how to manage information risk using a holistic approach by examining information from all sources- Offers varied perspectives of an author team that brings together academics, practitioners and researchers (both technical and managerial) to provide a comprehensive guide- Provides real-life case studies with practical insight into the management of information risk and offers a basis for broader discussion among managers and practitioners

Part 1

Total Information Risk Management Background

Outline

Chapter 1 Data and Information Assets

Chapter 2 Enterprise Information Management

Chapter 3 How Data and Information Create Risk

Chapter 4 Introduction to Enterprise Risk Management

Chapter 1

Data and Information Assets

Abstract

This chapter introduces key concepts about data and information assets, including a discussion on characteristics of data and information assets, quality of data and information assets, and their business impact.

Keywords

Data and Information Assets; Characteristics; Information Manufacturing; Data and Information Quality; Business Impact

“I would like to assert that data will be the basis of competitive advantage for any organization that you run.”

—Ginni Rometty, CEO of IBM

What you will learn in this chapter

How data and information have become the most important assets of the 21st century

How to define data and information assets and what their unique characteristics are

Key concepts of data and information quality

The business impact of having low-quality data and information assets

Where napoleon meets michael porter: data and information are assets

Napoleon Bonaparte, the great French emperor, conquered nearly the whole of Europe in the early 19th century before he was finally defeated at Waterloo. According to some sources, one of his famous sayings was “war is 90% information.”

In the Second World War, the allies could decrypt the secret codes generated by the ENIGMA machine that the Nazi regime used for communicating. This enabled the allies to end Nazi Germany’s submarine dominance in the world’s oceans.

More recently, in the mid-1980s, Michael Porter, one of the great management thinkers of our generation, observed, together with Victor Millar, that “the information revolution is sweeping through our economy,” thus making information the foremost competitive differentiator.

In a way, in the time between Napoleon and Porter, not much seems to have changed in this regard: information was and is one of the most important factors for competitive advantage. Data and information can help to win wars—both real ones and those we fight in business and our everyday life. And even if you are not competing against another organization, your biggest obstacles might be the constraint of time and resources, thereby limiting the means with which to follow your noble goals. It is no understatement to say that information can make the difference in the fight against poverty, environmental pollution, climate change, and diseases like cancer, malaria, and HIV.

It really does not matter what type of business you are in—information will be key to your success. Your organization could be in the private, public, or nonprofit sector. It may be local, national, or global. It may be a sole trader, a partnership, a company, or a charity. It may be large or small. The permutations are varied, but what is homogenous is the reliance upon information.

Analyzing large volumes of data can provide us with such valuable insights that it can be a true game changer. And because data and information are so valuable and powerful, we call them assets. This chapter explores what is behind the concept of data and information assets. We start with some recent history, look at data and information themselves, including how they are manufactured, their quality, and how they influence the success of organizations.

How data and information have become the most important assets of the 21st century

When you think of the most significant innovation drivers in the 20th century, one of them is surely information technology (IT). IT has fundamentally changed how organizations do business and has revolutionized both product offerings and processes. Think, for example, of the level of automation in manufacturing today, where computer-controlled robot arms have replaced human work, or the digitalization of services, which has led to the emergence of companies like Amazon, Facebook, and Google. In recent years, we have seen IT assets increasingly turn into a commodity (similar to, for example, electricity and water), to such a degree that they are in many cases relatively insignificant in terms of competitive advantage. However, IT has provided the foundation for the rise of another type of resource, which has become central from a strategic point of view: information.

There are two major trends that brought us to the Information Age, and made information a central resource in the 21st century. The first is the massive abundance of information due to the rise of the capabilities and the decreasing costs of IT over the last few decades. Today, information can be automatically captured with technologies like sensors and radio-frequency identification (RFID), efficiently processed using large computer systems, and accessed at any time and place via the Internet. The retailer Wal-Mart, alone, processes one million customer transactions every hour—that is, 2.5 petabytes (The Economist, 2010)—that can be used, for instance, to analyze customer behaviors in ways that have not been possible before.

Of course, this is not exclusive to Wal-Mart. Large IT vendors such as IBM, having recognized the potential that organizations can leverage from all this data, have strategically aligned themselves for a future of Big Data (see, for instance, http://www-01.ibm.com/software/data/bigdata/). The degree of automation that is possible when it comes to managing large quantities of data and information is constantly advancing. Today, we are living in the middle of what has been defined as the Information Age. Nearly every aspect of private and corporate life can and often is captured, processed, and exchanged digitally using personal computers, mobile devices, cameras, microphones, and other types of sensors, radio-frequency identification, Internet, e-commerce applications, social networking, emails, enterprise applications, and corporate and public databases. Potentially, every piece of information, wherever it may reside, could be accessed from any place within seconds. It can be automatically analyzed and combined to provide higher-level insights. Big Data is a resource that we not only have to protect, but also utilize in a way that is most beneficial for society.

The second major trend is the globalization of all economies, which puts organizations under constantly increasing pressure to adapt, innovate, and speed up their processes to keep up with their competitors. Information, using the enormous capabilities of today’s IT, can help companies to make better-informed timely decisions and innovate the business. In a world where almost everything can be outsourced to a cheaper supplier, information (and knowledge) are often the only remaining effective differentiators when no other traditional market barriers exist.

So, “Is data the new oil?” (see Figure 1.1), a question posed by Perry Rotella in an article for Forbes.com, a leading business magazine (Rotella, 2012), referring to a comparison first expressed by Clive Humbyat at the ANA Senior Marketer’s Summit 2006 at Kellogg School of Management, and to Michael Palmer’s blog post in which he wrote: “Data is just like crude. It’s valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc., to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value” (Palmer, 2006). Jer Thorp responded in a blog article for Harvard Business Review, in which he points out a very valid distinction between data and oil: “Information is the ultimate renewable resource. Any kind of data reserve that exists has not been lying in wait b...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• Dedication
• In praise of Total Information Risk Management: Maximizing the Value of Data and Information Assets
• Acknowledgments
• Foreword by Thomas C. Redman
• Foreword by John Ladley
• About the Authors
• Introduction
• Part 1: Total Information Risk Management Background
• Part 2: Total Information Risk Management Process
• Part 3: Total Information Risk Management Techniques
• Part 4: Conclusion
• Index