What’s The Most Important Part Of An Information Business?

Sunday, 6.42pm

Sheffield, U.K.

When a truth is necessary, the reason for it can be found by analysis, that is, by resolving it into simpler ideas and truths until the primary ones are reached. – Gottfried Leibniz

In a post a couple of days back I asked how we would go about starting to analyse situations.

That got me doing a little reading.

In a paper, which is now 15 years sold, Libertatore and Luo (2010) discuss the implications of the Analytics movement for Operational Research.

Analytics, at the time, was a new term doing the rounds.

I remember being introduced to tools such as PowerBi around 2012 with the advent of cloud computing and software as a service (SAAS) applications.

I didn’t like the idea – but I could see how it would sell.

The paper argues that four big driving forces led to the analytics movement.

I’ve adapted their picture above, as I think the order I experienced is slightly different, so I’m going to discuss it from that perspective.

The first change is that of a process orientation. Things happen. Then other things happen. And these happenings over time result in value for customers.

Managing many operations these days, especially those in information businesses, are about managing processes.

This is different from innovation and research and new ideas.

For example, quantum computing is a hot topic right now. In the West it’s driven by a combination of private investment, university research and the ever-present military interest.

In the East, it’s driven by state investment.

Once you have something promising emerging from research, making it happen in practice is a process problem.

And I’m interested in those practical businesses in this post.

The changing view from stand alone products to processes has a natural fit with the changing ecosystem of data.

We might have once thought of data as a silo, a set of complete information.

Now, we know that we have data sets that keep growing, databases of daily stock prices, weather changes, flooding events, e-commerce purchases – the river of data is constantly flowing and replenished.

But to really use data in a process view what you need is software – and we are awash in software now.

When it comes to open source and free software there is a huge amount of choice – starting with r and python packages that can pretty much do anything you want.

And we now also have people in organisations who understand these things, that have grown up with these tools.

More importantly, those people are in charge – in management roles and in a position to understand how to use these tools in practice.

Knowing how to do analysis is increasingly important for organisations – and they will probably start hiring more and more analysts – people that have the skills needed to work with computers and data.

But, the most important thing they will be doing is applying those capabilities to build better and cheaper processes.

There is a saying in product firms that companies don’t compete, supply chains do.

In information businesses, we could change that to it’s not smart people in consultancies that are competing, it’s the processes they’ve implemented.

The better your process, those likely you are to win.

Cheers,

Karthik Suresh