Last Friday, when Amazon’s market cap pushed past Walmart’s, the headlines almost wrote themselves – “Internet Retailer Amazon Topples Traditional Retailer Walmart,” or the like. The lead angle? Amazon’s information-based business model had surpassed Walmart’s old-school, bricks and mortar business concept. Just one problem – totally wrong lead, with the totally wrong point.
Sure, Amazon is clearly an information-based business. Part of that data-driven strategy has yielded red-hot growth in its cloud computing business, Amazon Web Services, with sales up over 80 percent and operating income five times larger than a year ago.
But Walmart is also fundamentally in the information business. Ten years ago, Walmart was already vigorously analyzing data from millions of daily customer transactions, to understand, and also to predict, its customers’ behavior. How else could Walmart have confirmed that sales of Pop-Tarts (strawberry, to be precise) are seven times higher before a hurricane, enabling it to ship the right amount at the right time to the right stores, along with the beer and flashlights? Fast forward a decade, and Walmart’s big data sets have grown, reportedly including customer transaction data for 145 million Americans. According to Walmart’s CEO of Global E-commerce Neil Ashe, “We want to know what every product in the world is. We want to know who every person in the world is…. And we want to have the ability to connect them together in a transaction.”
The fact is that every company today is in the information business. The only differences are the extent to which organizations realize this reality, and the extent to which this reality drives strategy.
But just as with any other asset central to an organization’s business model, information brings more than value. Information also creates risk. And that’s the point of Information Governance, to help companies satisfy information-related compliance requirements and control risk while optimizing information value. Or to paraphrase Barclay Blair of the Information Governance Initiative, Information Governance is what enables data-driven business models.
So yes – information can be used to understand, to predict, and to influence. It can also be directly monetized. But to enable success with any of these business strategies, first and foremost, information must be governed.