Introduction to Competitive Advantage in Information Systems

Where Does Data Come From?

Key Takeaways

  • For organizations that sell directly to their customers, transaction processing systems (TPS) represent a source of potentially useful data.
  • Grocers and retailers can link you to cash transactions if they can convince you to use a loyalty card which, in turn, requires you to give up information about yourself in exchange for some kind of financial incentive such as points or discounts.
  • Enterprise software (CRM, SCM, and ERP) is a source for customer, supply chain, and enterprise data.
  • Survey data can be used to supplement a firm's operational data.
  • Data obtained from outside sources, when combined with a firm's internal data assets, can give the firm a competitive edge.
  • Data aggregators are part of a multibillion-dollar industry that provides genuinely helpful data to a wide variety of organizations.
  • Data that can be purchased from aggregators may not in and of itself yield sustainable competitive advantage since others may have access to this data, too. However, when combined with a firm's proprietary data or integrated with a firm's proprietary procedures or other assets, third-party data can be a key tool for enhancing organizational performance.
  • Data aggregators can also be quite controversial. Among other things, they represent a big target for identity thieves, are a method for spreading potentially incorrect data, and raise privacy concerns.
  • Firms that mismanage their customer data assets risk lawsuits, brand damage, lower sales, fleeing customers, and can prompt more restrictive legislation.
  • Further raising privacy issues and identity theft concerns, recent studies have shown that in many cases it is possible to pinpoint users through allegedly anonymous data, and to guess Social Security numbers from public data.
  • New methods for tracking and gathering user information are raising privacy issues which possibly will be addressed through legislation that restricts data use.