Land, employees and equipment were all traditional drivers of wealth. But now information is also key to generating economic value.
How much land do you own? How many people do you employ? How big is your factory? At different times in history, these questions have all been surrogates for a far more basic question: How wealthy are you? That’s because, at different points in the evolution of business, each of those questions inquired about the fundamental asset that was at the heart of wealth creation at the time — land, people or machines.
Today we are on the cusp of a period in which another question may serve as an indicator of potential wealth. That question is: How much information do you have? Advances in information technology are finally becoming so robust, affordable and increasingly omnipresent that the business world has now arrived, we believe, at the beginning of a new form of information-based competition and competitive advantage.
We argue that IT is so available and affordable for most organizations that, increasingly, information has the potential to be a valuable asset — one worth managing as a product, not merely a byproduct. In other words, technology is the enabler, but information is the real source of value creation. Information technology is very visible, and companies spend large amounts of money on it. However, information is the less visible but high-potential beneficiary of the technology, as modern digital technologies significantly increase the amount and scope of information we can gather and use.
Internet-based companies like Google and Amazon have already shown the value of creating, collecting, analyzing and deploying information. What’s more, traditional companies such as UPS and Capital One have also demonstrated that the information generated by transactions can be valuable in optimizing operations and sparking innovation. Many businesses have borrowed ideas from these and other information-savvy companies, but we propose a comprehensive framework, the information footprint, for finding and assessing information-based, value-creation opportunities. Indeed the information footprint is a metaphor for posing and answering an increasingly important question: What information assets does our company have?
A footprint has three dimensions: length, depth, and breadth. So does an information footprint.
The information footprint is a metaphor for posing and answering an increasingly important question: What information assets does our company have?
Length is the extent to which information is deployed outside the organization’s boundary to support existing business operations.