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The purpose of this report is to analyze the blog by Michael Palmer, in which he has emphasized the importance of data by stating it as a crude oil and has put forward some ideas for data usage by organization. This report also includes some recommendation on data usage for strategic purposes by the organization.

Importance of Data:

Data can be defined as the raw material and unprocessed information which needs to be processed to become useful for its user. Processing data is an essential requirement to convert data in to information so that it can be beneficial to its user. The importance of data shall however never be undermined.  Data can be considered as a crude oil which is not much useful on its own but can become useful by getting converted in to plastic, petroleum etc. according to the wish of its user. If looked upon from the other dimension it can be said that to have petroleum it is essential to have crude oil. Similarly in business to have a strategic plan it is essential to have data.

Use of Data in Organizations:

The use of data in an organization at every level is a fundamental. Organizations cannot survive without using data. Organization need data at every strategic planning level either for monitoring, evaluating, performance management or decision making. Different functions of organization require different type of data for example financial, operational, marketing, administrative etc. All of these data though are different from each other but are interdependent and cannot be viewed in segregation for strategic purposes.

Recommendation for Use of Data by the Organization:

Some of the ways for the use of data in strategic planning are:

  1. Development of a rational database:

Organization should develop a rational database which not only provides the organization with the useful data but also with a filtered and relevant data. Database should be such that it gets constantly updated so that it provides a comparative, consistent data in a usable format which is not obsolete.

Database should be developed in accordance with the organization so that it is most beneficial. Should the data base be centrally located or distributed? How much percentage of live data should be included in the database? These and all other questions like these should be answered in respect of the organization concerned and not on a general bases. If general theories for database development are applied instead of specific they would not result in fruitful data.

  1. Data should not be confused with fact:

It is essential for the organization while analyzing the data to not consider it as a fact. Data and facts are two very different things and should not be confused while planning or decision making otherwise it will lead to wrong plan or decision. The major difference being that basic data is not always fact but a fact can be a data for further analysis. Where data is unprocessed information, a fact is true and valid information.

It is therefore necessary for the organization to screen data and facts from the information being provided to it for strategically functions. As Taiichi Ohno of Toyota Motors clearly states that data and facts are different by saying:

“Data is of course important in manufacturing, but I place the greatest emphasis on facts.”

  1. Data should be used in context:

It is necessary that the available data is used in accordance with the context of the market place or of the situation related to the data. The study of a segregated data without it context will not bring the required meaning and effectiveness to the data study as it should. A data studied without its context will lead to a decision which will be inconsistent with the other decisions of the organization.

A decision by the marketing department based solely on marketing data without consultation of operational data will be the damaging to the organization.


These recommendations for the use of data by organizations is given with the view that the valuable data obtained through expenditure of financial and man power resources is analyzed to the most accurate level possible  so that it gives maximum advantage to the organization. Incorrect analysis of data will not only be disadvantageous because it will lead to bad decision but also because it would indicate waste of resources used in data collection. So care should be taken in not only collecting the data but also in using it.

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