How can data, information or knowledge contribute to organizational competitive advantage?

-          Data: Cambridge Dictionary (2019), “Data is an information, especially facts or numbers, collected to be examined and considered and used to help decision-making, or information in an electronic form that can be stored and used by a computer:” With that been said, we can understand that whatever we can get as data, can also be quantitative (like 1, 12, 25) and qualitative (African American, Hispanic, middle class, etc.)

-          Information: Information is what makes data useful and will determine the types of data that we have. As state (Merriam-webster.com, 2019), “Information is the resolution of uncertainty; it is that which answers the question of "what an entity is" and is thus that which specifies the nature of that entity, as well as the essentiality of its properties. Information is associated with data and knowledge, as data is meaningful information and represents the values attributed to parameters, and knowledge signifies understanding of an abstract or concrete concept.”

-          Knowledge: According to (Merriam-webster.com, 2019),   “Knowledge is a familiarity, awareness, or understanding of someone or something, such as facts, information, descriptions, or skills, which is acquired through experience or education by perceiving, discovering, or learning.” From this citation, we can understand that the knowledge is related to the information, because without information we can state that we barely will have knowledge.

-          The differentiation between each of them: These 3 (data, information and knowledge) are different in term of meaning and role, but they are related to each other’s when building an information system. As state Bourgeois (2014), “The goal of many information systems is to transform data into information in order to generate knowledge that can be used for decision making.”

According to Porter (1985), “In business, a competitive advantage is the attribute that allows an organization to outperform its competitors. A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled labor, geographic location, high entry barriers, and access to new technology.” Now that we have some understanding about an organizational competitive advantage, then let focus on the last two words of this citation “new technologies”. It is important, before talking about new technologies, to mention the fact that, people were collecting data way before the computer’s age, because the companies were running by successfully collecting data and using effectively, but in traditional ways (writing or registering). However, these new technologies have changed the world in many ways, because now we have hundreds or maybe thousands computer’s systems that allow us to collect; organize and save data. Knowing that we need information before talking about data, and more importantly after successfully collecting data, then that will be transform to be a knowledge, so it becomes obvious to understand that these are not just related, but are the keys in today’s economy to contribute to organizational competitive advantage, because everything depends on a effective information system to take a lead over the competitors in these days.

The role of data is essential for any company to manage almost everything (human resources; productions, manufacturing, budgeting, sales; customers relationship, etc.), because when successfully collected, this data will help the managers to project the sales and then the profits of the year(s). According to (NGDATA, 2019), “Data management is an administrative process that includes acquiring, validating, storing, protecting, and processing required data to ensure the accessibility, reliability, and timeliness of the data for its users.” Organizations and enterprises are making use of Big Data more than ever before to inform business decisions and gain deep insights into customer behavior, trends, and opportunities for creating extraordinary customer experiences.

As we all know, with these advancements technological, it’s obvious to recognize how important it is to have an effective information system, but to attain that goals companies must pay more attention about how they collect the data, in doing so they might get the right information, because these informations collected will be transform to a knowledge. And then, when that happened, companies will use that to make the right decisions (about projecting sales; budgeting, marketing and all the major management decisions).

References

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

Cambridge Dictionary. (2019). DATA | definition in the Cambridge english dictionary. Retrieved April 26, 2019, from https://dictionary.cambridge.org/us/dictionary/english/data

Merriam-webster.com. (2019). Definition of INFORMATION. [online] Available at: https://www.merriam-webster.com/dictionary/information [Accessed 26 Apr. 2019].

NGDATA. (2019). What is Data Management? – NGDATA. [online] Available at: https://www.ngdata.com/what-is-data-management/ [Accessed 26 Apr. 2019].

Porter, M. E. (1985). Competitive Advantage. Free Press. ISBN 978-0-684-84146-5