Definitions of knowledge

Growing up in this tech revolution I have often heard the words Data, Information and Knowledge used and I have always thought they mean the same thing and I use them interchangeably too. Notwithstanding my several shots at defining ‘Data’, ‘Information’, and ‘Knowledge’, there is still a lack of a clear and complete picture of what they are and the relationships between them. Although many definitions have been relevant, they always seem wholistic. This paper does not intend to criticize those who have made efforts in this faculty. But the goal is to provide a different meaning of data, information, and knowledge with a perspective in the context of business management

·         Data

Data are the raw bits and pieces of information with no context (Bourgeois, 2014). It is also the collection of facts or the recording of (capturing and storing) symbols and signal readings, things with intrinsic meaning, and a mere representation. (Probst, Raub, & Romhardt, 2000). Symbols may include words (oral or written), numbers, diagrams, and images (pictures or videos), which are the foundations of communication (Liew, 2007). While signals involve sensory interpretations of light, smell, sound, taste, and touch (Liew, 2007). I understand the main intent of data is to record situations or to attempt to capture the true picture/ event of life. Therefore, all data are historical, unless used for illustration purposes, such as forecasting.

·         Information

Information is simply a message that has a true meaning, suggestion, or input for making a decision or a call for action (Liew, 2007). Information is said to be processed data, from current or historical events. The crux of information is to help in making sound decisions, realizing an opportunity and/or solving problems. A typical link between data to information is seen in this example. Given that a person’s name is Ifeanyi, and a mobile number is represented 07062980001. Both pieces of data may have a relationship, such as ownership. We can say that 07062980001 is Ifeanyi’s mobile number. This is a simple message and we can use it to make a decision there is a likelihood of reaching Ifeanyi via phone call. If we use this process to compile names of customers and their contact, we can have the information of how many customers we can reach i.e. 500 customers, and possibly how we can provide our services to meet their needs.

·         Knowledge

The acknowledgment, capacity to act and understand that resides in the human mind or brain is known as knowledge. Value creation is the main purpose of knowledge and this contributes to making life better (Liew, 2007). For the purpose of business, the purpose of knowledge is to create or increase value for the enterprise and all its stakeholders.

S/n	Parameter	Data	Information	Knowledge
1	Definition	Data are elements of analysis.	Information is data with context.	Knowledge is information with meaning.
2	Processing Method	Simply a fact, either collected or recorded	Processed data, formalized, capture and explicated	Actionable information
3	Storage	CPU (RAM &Hard Disk), Cloud (DropBox, Google Drive, One Drive, etc.), Magnetic tapes, optic devices, etc.	Internet, Servers, Optic devices, etc.	In the human mind or brain
4	Application	Used as an input for decision making	Used for forecasting and scenario planning. Acts as an output.	Supports flow of information for sharing, and application
5	Reliance	Data doesn’t depend on Information.	Information depends on data.	Knowledge depends on information and data
6	Accuracy/Precision	Data is not specific.	Information is specific enough to generate meaning	Knowledge is specific enough to make decisions

Competitive advantage is desirable if any organization must become the market leader for its industry. Porters definition in 1980 simply suggests that when one of the resources of a firm is superior to that of any other firm in the same industry or market, a competitive advantage is created. This advantage can then be leveraged in order to retain superior earnings, creating a higher market share and eventually become the market leader. There are several resources that aid this advantage. For instance, data can help organizations gain an advantage by remaining consistent with services, and provides longevity because employees understand the implications of data that’s being collected, managed and how decisions are made to increase the staying power of the organization in the market (Morris, 2018). Data also creates awareness, feedback, responsiveness, fast and confident decisions i.e. to know if sales are up or down if customers are happy or not, and what’s working (and what’s not) in their own and other departments (Morris, 2018). This helps the organization to buy-in, loyalty, engagement, action, and responsibility, and encourage employees to ideate on new products, services, or business model development to move their brand forward (Morris, 2018). An example is Netflix, who recently beat Walt Disney Company as the United States’ number one media company by market value (Morris, 2018). Information can help an organization gain a competitive advantage by lowering cost and cost drivers in any part of the value chain. Enhancing differentiation by customizing products, employing automation, etc (Porter & Millar, 1985).  The information revolution is also spawning new businesses in three distinct ways. First, it makes new businesses technologically feasible. Secondly, it creates a derived demand for new products. Thirdly it creates new businesses within old ones thereby creating barriers to competitor’s entry and improved sales (Porter & Millar, 1985). More so, knowledge can help organizations gain competitive advantage through knowledge bases, pools, directories, flows, networks, exchanges, and knowledge transfers to achieve cost cutting, superior quality, and superior organizational knowledge over its competitors (Buuren, n.d.). For example, knowledge pooling was used by BP Amoco, the mother company of British Petroleum, through the knowledge management program to achieve the prime source for the sharing of knowledge today (Prokesh, 1997).

Data management is the development and execution of processes, architectures, policies, practices, and procedures in order to manage the information generated by an organization (Blue pencil, 2015). An example of data to context data management or the processing is our initial example given about Ifeanyi. Consider Ifeanyi located in a current phone book vs. Ifeanyi located in a grocery shop. We note that both have the same data, in different context yields different meaning, implications or information that may necessitate a different decision or action. This makes data management important because the data your organization creates is a very valuable resource. The last thing you want to do is spend time and resources collecting data and business analysis, only to lose that information. These may require you to spend time and resources again to get that same data you already had. However, data or data management will help a business remain and increase productivity, cost efficiency, operational nimbleness, avoids security risks, reduced data loss and ensures accurate decisions by all company stakeholders (Blue pencil, 2015).

Having defined data, information, and knowledge, their relationships, and why they are usually used interchangeably is a concern. However, their relevance to our intended applications can be limitless. The key to understanding the complex relationship between data, information, and knowledge lies at the origin of data and information. Data, information, and knowledge are not interchangeable in terms of their acknowledged distinct definitions but from the context of the application. For example, in defining what a book is, do we say its knowledge, information or data? It can be any of the three depending on the context. A book is a knowledge from the author’s perception, information for the potential reader, and as data, since it is contained in a storage media (called book) (Liew, 2007). These distinctions can help us gel our understanding in terms of managing data, information, and knowledge within the organization and the business system. 

References

Blue pencil. (2015, November 23). What Is Data Management and Why It Is Important? Retrieved on April 29, 2019, from https://www.blue-pencil.ca/what-is-data-management-and-why-it-is-important/

Bourgeois, D. T. (2014). Information Systems for Business and Beyond. Saylor.org. Licensed under Creative Commons (CC-BY) Attribution. Chapter 4                                                                                                                      

Buuren, R. (n.d.).  Knowledge Management as a Competitive Advantage.  Retrieved on April 27, 2019, from https://pdfs.semanticscholar.org/0345/e47262c95e00c17f634adc9e1f075c1ab11b.pdf

Liew, A. (2007, June). Understanding Data, Information, Knowledge And Their Inter-Relationships. Journal of Knowledge Management Practice. 8(2). Retrieved on April 28, 2019, from http://www.tlainc.com/articl134.htm 

Morris, T. (2018, June 5). 6 Competitive Advantages of Data-driven Organizations. https://www.microstrategy.com/us/resources/blog/bi-trends/6-competitive-advantages-of-data-driven-organizations

Probst, G., Raub, S., and Romhardt, K. (2000) Managing Knowledge: Building Blocks for Success; John Wiley & Sons, Chichester, England, UK.

Prokesh, S. (1997). Unleashing the Power of Learning: An Interview with British Petroleum's John Browne. Harvard Business Review. 146-168.

Porter, M.E., & Millar, V.E. (1985, July).  How Information Gives You Competitive Advantage. Retrieved on April 28, 2019, from https://hbr.org/1985/07/how-information-gives-you-competitive-advantage