Not quite. Although they're closely connected, they're two distinct concepts. In short, information is data with context and meaning. After data becomes information, it can become knowledge when it has an application or use.
Let's explore the definitions of data versus information in more detail and identify how to improve both in a data management strategy.
What is Data?
Data consists of raw numbers, values, and/or facts. Each piece of data doesn't mean much on its own — it lacks context and hasn't been processed. It can be stored in an electronic format ready to be processed into information.
Most businesses collect data from a huge variety of different sources. This can include interactions with leads, customers, providers, and employees. Lead and customer data is often centralized in a CRM and enriched by other apps in the company's tech stack, such as automation software, customer support platforms, and accounting apps.
What is Information?
Information is data with context. This results from processing, interpreting, and organizing raw facts and figures into meaningful formats that can influence decisions. The definition of information is essentially the "imparting of knowledge."
In any business, it's vital for decision-makers to have access to relevant and reliable information. This depends on collecting quality data that can be processed, interpreted, and structured in an accurate and consistent way to become valuable information. It's never enough to rely on instinct when measuring the performance and health of a business: it needs to be backed up by quality data and actionable information.
Examples of Data vs. Information in Business
You might still be wondering what the difference between data and information looks like in practice. Here are some examples of data versus. information in a business environment.
Examples of data:
The number of visitors to your website
The time and date of a transaction
A customer subscription amount
Examples of information:
(555) 555-5555 as a phone number
Knowing that organic traffic is rising faster than direct traffic
Identifying the time of day you process most transactions
The average annual contract value (ACV) of your account subscription agreements
Remember that a team leader wants to see information, not data, so it's essential to turn the data you collect into meaningful and actionable information before presenting it. Read on to learn how to make that happen in your organization.
How Data Becomes Information
In his book The Signal and the Noise, statistician Nate Silver writes, "The numbers have no way of speaking for themselves. We speak for them. We imbue them with meaning."
This is a good way of thinking about how data becomes information. Data needs interpretation and context to become information. Otherwise, it's just facts and figures.
Data becomes information when it is:
Processed — Collecting, recording, organizing, and storing information, such as in your CRM.
Interpreted — Making sense of facts and figures and giving them context so they can become meaningful to your business.
When information has an application or use, it can then become knowledge that has a direct impact on the performance of the organization.
Best Practices for High-Quality Data and Information
To develop reliable and accurate insights in your business, you need quality data. The most effective way to ensure high-quality data is by optimizing each stage of the data lifecycle in your business. This includes:
Capturing accurate and reliable data in a standardized format.
Once you have high-quality data synced between all of your apps, you can optimize the information you collect from it. This can include using automated data reporting that's transparent to key people in your business and offers meaningful insights. Remember that if information isn't timely and relevant, it generally isn't worthwhile for your business to collect.
Optimize Data and Information in Your Business
When you know the difference between data and information, you can pay attention to how your business handles each one. Focusing on the journey from raw, unprocessed data to relevant information with a clear use is valuable and essential for any business.
Start by collecting high-quality data you can trust, sync standardized and enriched data between your apps, and turn it into transparent information that positively impacts your business and customers.
Originally published Dec 7, 2020 7:33:00 AM, updated June 24 2021