The Differences Between Data, Information, and Insight
February 4, 2013 Leave a comment
January 23, 2013 started like every other ordinary Wednesday. I was doing a quick scan of my Twitter feed and I saw this gem. You can get the full article here.
Then the skies opened up and a choir of angels began to sing. OK, not really. But you get the idea.
The comment was so insightful that I ended up sharing it during a lunch-and-learn I had last week The event was talking about market research basics with a group of entrepreneurs and people who worked with or for start-ups. One of the comments I had in the presentation is “what is NOT market research”. My comment was just doing a survey or have millions of lines of data is not market research in of itself. However, it is a means of getting market research completed.
So what is the difference between data, information, and insights. Well, here is my perspective:
- Data: Data is just what is implies…it’s just data. Dictionary.com partially defines data as individual facts, statistics, or a body of facts. Data is the foundation of both information and insight. I have provided an illustration to provide some “insight” into what I am trying to say. As data being just a series of facts and numbers, they don’t mean anything without some form of context.
- Example: Having sales figures, by month, for a generic company’s fiscal year.
- Information: This is the next step from data. Although information is still based on data, it takes an individuals interpretation of that data into something useful for the person or company it is being directed to (which is not to necessarily say that the person giving the information is part of the company). Information is data within a relevant context of the conversation.
- Example: Having sales figures, by month, for your specific company’s last two fiscal years. The figures are also broken out by sales person, region, product line, and shows percentage growth year-over-year.
- Insights: This is the next step from information. Just like information is based on data, insight is based on information. However, insight is taking the data and information you have and using it to strategically understand something that the data or information does not present on it’s own accord.
- Example: Having sales figures, by month, for your specific company’s last two fiscal years. The figures are also broken out by sales person, region, product line, and shows percentage growth year-over-year. But then, use the information to forecast sales trends for the next fiscal year and develop a marketing strategy to increase sales in a low preforming product line.
All three are useful in any business, non-profit, or organization. This is irrelevant of how big or small the group is. In fact, I would submit that the smaller the organization, the more quickly they can progress through the stages and more nimbly react to what they are wanting to achieve with what they have.
However, the ultimate goal is to progress up from what you have to the next level. By doing this, your organization will be a better one.
How can you use this process to get the results your organization needs? Let me know by providing a comment below.
–J. Nolfo helps companies understand their market and customers though a variety of market research strategies. He has over ten years of experience of market research for strategic planning purposes. He is the Director of Research at Rhino Market Research. He shares his thoughts about market research and business concepts with his blog “The Rhino Crash Blog…Understanding Market Research in Business“. If you would like to discuss this blog or how J. can help you understand your market and customer needs, email him at email@example.com.