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Difference between
Data, Information, Knowledge and Wisdom


Although we often use the terms data and information interchangeably, they don't mean the same thing. Neither does wisdom and knowledge. In fact, these terms represent different phases towards organizational enlightenment.

1- Data

It is generally described as facts and figures without context or interpretation. A string of figures could be an account number, a charge card number, an inventory number, or a number signifying a volume of transactions. Data without a descriptive definition or context is meaningless.

Data is the raw material that supports information and the basis for intelligent actions and decisions.

But not all numbers are created equal. Some are essentially extraneous material that takes up space and obstructs access to desired data. To enhance efficiency, data must be effectively gathered, organized, and stored so it is easy to access and transform into meaningful information.

It may be gathered in variety of manners. Common tools for gathering and recording these critical numbers include dbases, check sheets, bar-code readers, optical character readers, direct process inputs, and voice-activated entry.

2- Information

One creates information from patterns in the data. Information provides meaning and understanding from the numbers. In other words, information is data in context and useable material. According to Larry P. English, author of Improving Data Warehouse and Information Quality, quality information includes three components...

1) Clear definition and meaning of data

2) Correct value(s)

3) Understandable presentation (format)

Nonquality of any of these components can cause a business process to fail or a wrong decision. English finds that information may be represented as a formula:

Information = Data + Definition + Presentation

3- Knowledge

Knowledge is considered "information in context" or "information in action," and it can be tacit or explicit.

· Tacit (informal, uncodified)... Knowledge includes history, memories and experience. Example of  knowledge includes employee's training, customer's relationship, and vendor history. Tacit knowledge may be difficult to catalog, sometimes highly experiential, sometimes difficult to document in any detail, sometimes ephemeral, and  sometimes transitory.

· Explicit (formal, codified) information documented in books, procedures, white papers, databases, and policy manuals.

Both types of knowledge are important. English contends that knowledge means understanding the significance of information and may be represented by the following formula:

Knowledge = People + Information + Significance

Knowledge itself won't advance the organization. It has power only to the extent that people are able to act on their knowledge.

4- Wisdom

In keeping with his other concepts, English offers this formula for calculating wisdom:

Wisdom = People + Knowledge + Action

Wisdom allows organizations to exploit the value of their resources toward accomplishing the corporate mission. To generate wisdom, you must provide people with training with quality information. You must allow people to act upon and experience the outcomes of their decisions.

Leave this data page and learn how to sell quality