Informationalize: Put Data to Work by Building Them into Products and Services

I grew interested in the notion that “data are assets” some years ago and have been working ever since to add substance to the notion and figure out what organizations should do about it. It became the theme of my latest book, Data Driven: Profiting from Your Most Important Business Asset.1 One rather obvious observation (in retrospect) is that “organizations put their assets to work” and Data Driven lays out fifteen specific ways to do so with data.

I don’t think any company, small or large, in any industry, can afford to ignore two of these opportunities: data analytics/data mining and informationalization. Analytics receives plenty of richly deserved press. Informationalization less so, even though it is conceptually simpler and so is accessible to a far larger community.

The basic idea is simple: Make existing products and services more valuable in the eyes of the customer by building in more data and information. The idea has been around for some time. I think I first heard about it in the 1980s, from Stan Davis of Future Perfect2 fame. I thought this was a pretty good idea then and today I think it is an even better one. Here’s why.

First, examples abound: I bought my first car in 1977 and (if I remember correctly) the dashboard featured a speedometer, a gas gauge, a “overheat light,” and a “low oil light.” I last purchased a new car in 2002. It has dozens more, including an “ABS malfunction” indicator, a “windshield wiper fluid low” indicator, and a “service due in XXX miles” indicator. Adding turn-by-turn directions (i.e., GPS) is a brilliant example of informationalization. I don’t think it was available in 2002, but is pretty much standard today. A few months ago, my father and I were talking about this and I noted that “it won’t be long before a light goes one when the air pressure in a tire is low.” He told me some of his friends already had it. These last two examples show how quickly informationalization can proceed.

While I was working on Data Driven, I asked Greg, my youngest, to help me find other examples. He came back right away, with the “Coors cold-activated can.” The mountains (on the can) turn blue when the beer is cold enough to drink. I’m so proud!

I’ve concluded that virtually any product or service CAN be informationalized. The example that convinced me came from Blan Godfrey, at North Carolina State. It is the hospital gown, about as mundane as a product can get. Researchers were working to equip the gown with blood pressure, temperature, and other monitors, and a small transmitter to keep the nurses’ station fully informed of the patient’s vitals.

The incident that convinced me that every company MUST think through its informationalization strategy (more on this in a minute) occurred at my house last Thanksgiving. I have three children, each with a spouse, and a total of three grandchildren. All made it home for Thanksgiving. That morning I sat in the kitchen and listened to my daughter Jenn, with a ten-month old, and my daughter-in-law Liz, with six and three year-olds, discuss the pros and cons of various choices of strained carrots (baby food).

Their conversation included a discussion of the merits of organic foods, which non-organics were better, the levels of sodium and sugars in specific products, and how “what Hudson, Jackson, and Nate like to eat” entered into the picture. The conversation went on for twenty minutes. I didn’t understand a single word.

Prior to this conversation, I had thought my wife and I fed our children properly. We always tried to give them lots of fresh fruits and vegetables and other “good stuff.” I didn’t let them have desert until they cleaned their plates, and I sure Nancy (my bride of thirty-four years) looked at nutrition labels. After listening to these two, I wasn’t so sure.

Then it occurred to me. My grandkids will want to know even more. They’ll probably want to may know:

  • Where exactly these carrots were grown?
  • When and how they were dug up?
  • What brands and quantities of fertilizer were used?
  • How much rain did they receive? How much irrigation?

This process never ends! We weren’t bad parents at all!

It seems to me that if you have to informationalize strained carrots, you have to informationalize virtually everything.

Developing an informationalization strategy will prove more challenging than simply answering “How do we build in more?” Most customers (both people and companies) are already in a state of information overload. Simply providing more exacerbates their problem and won’t win any friends.

Worse, providing incorrect information can have profound consequences. Friends tell me that, from time to time, their GPS sends them the wrong way. They’re not just mad at the GPS. They’re angry (and rightly so!) at the manufacturer.

Finally, assuming “one size fits all” will not do. Different customers want different things. I, for example, have no concern that my beer is cold enough. On the other hand, I would like a “heads-up” when it is time to buy another case.

There are an almost limitless number of other considerations:

  • How to position the newly informationalized product.
  • How much extra to charge.
  • How achieve and sustain a measure of competitive advantage,. 
  • Is informationalization the best way to exploit proprietary data?
  • And so forth.

These issues are demanding. I know of no standard “business model for informationalization,” nor even a script for answering the basic questions. This of, course, is the real work, and the fun, of the information age.

End Notes:

  1. Harvard Business Press, Cambridge, MA, 2008.
  2. Addison-Wesley, Reading, MA, 1987. See also, Davis and Davidson, 2020 Vision, Simon and Schuster, New York, 1991. 

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