What’s Information Waste?
How much is Information Waste costing your business? It might help to first define Information Waste:
Information waste: resources that are being applied to low-value activities
These examples will help to illustrate that definition:
- Information Supply Chains that support no Business Outcome– “we process this information because that’s what we’ve always done”
- Rework– the cost of failing to deliver business value right the first time
- Duplication of effort– capturing and processing the same high value sources multiple times
- Investing in the wrong things– investing in flashy applications instead of high-value sources.
- Delays in processing– latency delaying high-value, time-dependent business outcomes
- Paper / manual Information Processing – the cost of not digitising
Therefore, it should be clear that the foundation of all of this is measuring business value. LINQ provides a framework for quickly recording the value of every Information asset in your organisation (this includes Information, Processes, People and Systems).
What’s the cost of Information Waste?
We know that Information Waste is a hidden problem for most organisations because:
LINQ customers typically identify $200k of Information Waste in the first three months of their subscription and then keep finding more and more.
Perhaps a macro estimate can be derived from a McKinsey Digital Institute report on the ‘Digital America: a Tale of the Digital Haves and Have Mores’. This report identified that only 18% of organisations in the USA have successfully digitised which means that the lost opportunity for the remaining 82% of organisations was estimated at $2.2Tn per year by 2025.
But what’s that got to do with Information Waste? The answer: everything!
Digitisation is about the optimisation of the Information Flows which enable the business; optimisation being another way of saying the reduction of Information Waste from Information Supply Chains. Further, poor digitisation (the story of the Digital ‘Haves’) is about automating the Information Flows that the business already has. Successful digitisation (the Digital ‘Have Mores’) is about the fundamental restructuring of Information Supply Chains in a way that minimises the friction between the customer and the service that the business is supplying. Which is the complete elimination of Information Waste!
The elimination of Information Waste would generate $2.2Tn for the US economy; every year!
Eliminating Information Waste
But hang on! What’s that got to do with the list of examples I provided above? Surely, they’re about incremental change.
Many organisations have phenomenal levels of Information Waste; typified by paper, manual processes, rework, duplication and tortuous trust transactions. By incrementally identifying and eliminating Information Waste the organisation will experience significant gains in Information Productivity, which in a business sense equates to better customer services and/or increased productivity.
This also frees up time; time to tackle change in a more business-focused way.
From Information Waste to Business Transformation
To identify Information Waste, the organisation must understand the business value of their Information Supply Chains. This provides a framework to generate insights about how things could be; the foresight about what’s possible. As the CIO at one of LINQ’s government customers put it:
“I now want to use LINQ to answer the question: “If we were a start-up, what would our Information Supply Chains look like”
Or, put another way:
“I’m not satisfied with merely eking out more Information Productivity; I want to transform the business”
However, it isn’t possible to have one big bang project that would deliver this. The organisation must move from the current state to an improved future state through a series of incremental, achievable steps.
LINQ’s strength is in providing a persistent and easily maintained current state view of the business which provides a context for the incremental changes. LINQ users recognise the fast pace of change in the business environment. LINQ therefore provides a powerful enabler of organisational agility.
Therefore, think of Business Transformation is a business state which has eliminated the Friction (i.e. waste) of Information Flow to the maximum possible extent.
If you eliminated Information Waste in your business, it would probably look like Business Transformation
If you want to find out more, take a look at www.linq.it and then drop us a line!