CIOs Must Manage Information, Both Internal and External

Six Big Business Intelligence Mistakes

It’s not that CIOs are naive, but they often can’t seem to see the forest for the trees. And many seem to be playing by old business rules that are dissipating under them.

It seems change is afoot once again — this time, it’s with data. CIOs and IT have spent the past few years improving internal data gathering and analysis, both through cleaning up data via master data management (MDM) or adopting new solutions to make sense of Big Data sets.

Meanwhile, the business’ focus is shifting away from internal data, contends Adam Hartung, the CEO of Soparfilm Energy, a public speaker and an adviser on innovation.

“CIOs have done a great job of building a hardware and software infrastructure that produces data on just about every part of operations,” Hartung writes in a recent CIO.com column. “But today this is merely table stakes.”

Generating and maintaining internal information “has declining value in a fast-changing world,” he argues.

For an example, he points to the mall-based pizza chain Sbarro, which excelled at managing internal metrics such as ingredient costs and labor, but failed to take into account one key external data point: Mall shopping is declining sharply.

CIOs who are internally focused are missing the larger point—they are “information” officers, not “infrastructure” management officers, he pokes.

Unfortunately, by acting like the latter, they’ve neglected the former.

You’re probably thinking something along the lines of, “Well, you need both,” and “Managing external data will require the same skill sets and know-how.”

Wrong again. Hartung says CIOs have been so focused on internal data that they don’t have the money or the network to play well in this new situation.

“Today’s CIOs can be strategic CEO advisers by integrating internal and external data in ways that make the analysis derived from the data more valuable than the collection of data itself,” he writes. “Tomorrow’s best CIOs will create what-if scenarios and provide forecasts about what is likely to happen, not just report on the past.”

In particular, he says CIOs need to cultivate relationships with external data brokers and focus on finding data about their customers, competitors and the market at large.

It’s hard to argue with his logic, but what he doesn’t say is just how treacherous this new game may be for CIOs and businesses.

If you’d like to learn more about data brokers in general, this article at ProPublica is a good first start. It’s a consumer-focused piece, and so it can be a bit critical and aghast at the practice, but it lists most of the major players and explains where they get their data.

It’s a good read for CIOs, particularly since it includes some of the public relations nightmares (for instance, don’t do what OfficeMax did) you might encounter when leveraging external data. Hopefully, CIOs will be able to catch up with the rapidly changing world of data.