Sep. 15, 1998 Issue of CIO Enterprise Magazine
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CARTOON ONCE APPEARED IN AN ONLINE JOURNAL showing a man standing by the seashore with an enormous wave about to engulf him. He looks up resignedly and says, "Oh good, more information!" Finding data is certainly not a problem these days; finding the right type of information is. Beware of that tsunami-like data slam--the onslaught of meaningless pieces of data that attack and clog corporate intranet sites and databases. Not only does data slamming muck up internal databases, it can also dangerously slow down management decisions. A case in point: The market research director for a large financial services company proudly showed me his corporate intranet. He pointed out a particular home page for one of his company's business units. The page looked colorful, easy to navigate and was chock full of information--mostly from online news feeds. There was one problem, though: Almost none of the data related to the business unit. Yet it took up space and gave the viewer a false sense of an environment bustling with competitive activity. It had all the appearance of richness without any substance--another victim of data slam. When I asked the market research director if anyone used this site for serious decision making, he could not say for certain. It sure looked good, though. As intranets, databases and the Internet expand, meaningless data continues to snowball and hampers companies' ability to find and process the information they truly need to do business. Today there are over 320 million Web pages, and this number is expected to grow to over 3 billion in a few years, according to a recent report in USA Today. And that excludes the 10 billion-plus news-related records emanating from such traditional services as Dialog, LexisNexis and Dow Jones. For a sense of the volume of the data pool, try using the popular Alta Vista or Yahoo search engines to assess your market. Most likely you'll find well over 1 million hits. If so, you will have been slammed. The data--distracting, unrelated data-keeps coming. Instead of this flood of data, decision makers need specific, analyzed information, or intelligence. For example, assessing your rival's profit margins or sales strategy demands certain discrete pieces of information. The online world can provide you with tons of information but cannot analyze it. You have the ability to at least control the volume of information you receive. Without establishing criteria and setting boundaries for your information flow, you will never develop actionable intelligence--only information confusion.
Examine a Slam
Let's say you are an executive for a company that produces data security software. Your growth market is electronic commerce, or ecommerce. You install intelligent agent software on your system, which automatically sends "agents" out over the Web to track all related information on data security rivals and on your changing market. The agent's search on the uncontrollable Internet is producing thousands of new headlines each month. Here is a sample from the hits in your monthly search: IBM Delivers New Product for Secure E-Commerce Secure E-Commerce allows you to accept credit card payments online from anywhere in the world Providing Secure Ecommerce and Online Catalogs for Forward Thinking Companies by Using Trans-I-Net Technology Electronic Commerce Division of Apollo Online Mall Merchant HYPERLINK mailto:Register@Just #Register@JustShop, e commerce, secure commerce, store design Rainbow retools for secure e-commerce ShepMark Web Solutions, Web Site Development & Secure ECommerce Solutions Challenge Deliver secure e-commerce catalog Solution Net.Commerce GEN Secure E-Commerce! Cybercash credit card processing e-commerce secure credit card transactions IBM Gets SET for Secure E-Commerce Can you imagine making decisions based on this melange of data? This short list alone contains news on such a wide variety of events that no manager would want to wrestle with it, let alone use it to determine a tactical or strategic move.
Mind the Gap
THE FIRST STEP IN CONTROLLING THIS data deluge is to conduct a gap analysis. Gap analysis compares the competitive information a company needs with what it actually receives. If CIOs conduct a true gap analysis of their organizations' internal data pools, they will likely find little relationship between the enterprise's competitive needs and the data feeds. Yet the audit trail of activity in the system would reveal a steady stream of data and disk drives that are nearly full. What it can't evaluate is the quality or usefulness of this information. Volume is easy to discover, value is not. Executives should be wary of the most likely contributors to the data gap. Repetitious news. Many news announcements draw information from the same reporting agency. Each may offer a slightly different angle or title but contains essentially the same content and hits the corporate data pool with equal velocity and weight. Old data. Instant information does not mean current information. Trade magazines and other industry news sources may publish relatively old information that appears fresh because of a recent publication date on the article itself. The search engine may recognize only the publication date as important and pull in this
Dow Jones & Co. Inc (http://www.dowjones.com/) Fuld & Co (http://www.fuld.com) Reuters Ltd (http://www.reuters.com)
older information with the same force and vigor as it does the truly new information. An editor of a leading computer industry magazine once told me that if I wanted the most recent news on high-tech companies I'd be better off turning to the daily San Jose Mercury News than monthly magazines, which offer perspective or analysis but not up-to-the-minute news. Irrelevant information. Companies often use a marketing vehicle that has little bearing on what they are actually selling. Hot marketing terms and packaging styles can mislead the information gatherer. For example, IBM Corp. recently announced a major business intelligence product initiative, selling to a market it claims is worth $70 billion. All this may be true, but it was really selling data mining software tools under the popular wrapper of business intelligence. In the business intelligence world, this announcement would qualify as largely irrelevant. At the same time, it might prove insightful to rivals selling similar data mining packages. Credibility gaps. Because of the free-wheeling nature of the Web, any organization can and does place its own propaganda on the Net. Unlike traditional magazines and electronic news sources, such as Dow Jones & Co. Inc. or Reuters Ltd., no one maintains editorial oversight. As a result, anything anyone writes can slam into a corporate database as easily as the more traditional news sources. "IBM Delivers New Product for Secure E-Commerce" and "Providing Secure E-commerce and Online Catalogs for ForwardThinking Companies by Using Trans-I-Net Technology" are among the "news items" we captured in our Web scan on e-commerce security. These are self-promoting articles or press releases. True, these alerts can help a company stay in touch with a rival's activities. At the same time, however, it's difficult to evaluate the credibility of this information. A few years ago, a telecom client of Cambridge, Mass.-based Fuld & Co. saw an unexpected press release from a rival declaring it had won two mega contracts. Shocked, the company immediately turned itself upside down trying to figure out how the competition managed to win such a contract. After our analysts made a few telephone calls, we discovered that the announcement was premature and in the end false. That announcement remains on databases throughout the world even today. Information from 50,000, not 5 feet. All intelligence is local. Vital intelligence does not begin at Reuters or Dow Jones. News of layoffs begins in the town nearest the factory, not on Wall Street. New technology enhancements are heard first in the suburb where the company's data processing center is located, not necessarily in Silicon Valley. Think about how corporations really operate. Although companies are national or international in scope, they all have a home base and employ local people. Most databases neglect that fact. Just examine the article list above once again. What you see there are general, national announcements. They tell you little of how these software or e-commerce companies truly operate, how many people they employ, their sales strategy, distribution channels or proposed plant expansions. This information rarely makes it to the national arena or to the Web because most people don't care about such news. The folks who do are those living close to headquarters and those who are directly affected by the company's largess or ability to hire (or fire) them.
Fight the Slam
IS THERE A SOLUTION TO DATA SLAMMING? Yes. It lies in the aphorism "less is more." Management decries the problem of information overload, but it is within managers' power to improve information quality. The CEO needs to focus the organization on key strategies and on the critical questions that need answers in order to pursue those strategies. CEOs shouldn't shirk this responsibility even if they know nothing about data gathering, research protocol or library nomenclature. Meanwhile the CIO needs to increase an organization's selectivity in the realm of large, often distracting, amounts of information. Aside from rigorous and constant review of the data pool, managers must understand their company's specific strategic and tactical business goals. First, they should rank these goals in order of importance. Take the top three goals in each business unit and establish these as intelligence magnets. Next identify the data sources in each of these online streams. Librarians (or cybrarians) can help. They know and understand content; most managers do not. These experts can ask myriad questions to critically assess the content of the news source: From where do these news feeds draw their headlines? Is the data local enough, current or even credible? Since a large part of the data slam consists of company news releases and Web sites, managers need to decide whether they want to receive rivals' news releases and if so, whether to dispatch them to a separate corner of the data pool that can easily be identified as biased by and for the competitor. Some companies push so much information onto the Internet that at times it can overwhelm the reports of real news by credible sources. The sheer volume of competitor-generated "news" can mislead a manager who casually views the displayed list on the screen. Finally, organizations may need to establish a response mechanism on all news feeds. Let internal experts comment on the news items' accuracy, impact and usefulness. Because the amount of online data entering the market increases astronomically each year, the volume of data slamming won't abate. Companies need to defend against data slamming--one battle, one data feed at a time. Who knows if you will ever win this war? But by reducing the effects of data slamming you will free management to make decisions unfettered by too much useless, mind-numbing data. Leonard M. Fuld is president of Fuld & Co., a competitive intelligence research and analysis firm in Cambridge, Mass. He can be reached at lfuld@fuld.com.