Data, Information, and Knowledge

Many people tend to confuse data with information, and information with knowledge. Data are raw facts. For example, the number of chocolate bars sold by the local convenience store in the last month is a data point. Data, in and of itself, does not convey information. The number of chocolate bars sold at the local convenience store does not tell us anything of real value.

Information is two or more facts related to produce additional value. For example, if in addition to the sales totals for chocolate bars we have sales data for other candy bars, we can see where the sales of chocolate bars rank in comparison to all other types of candy bars.

Knowledge is stored information. If we know that chocolate bars were only the 10th best selling candy bar in our inventory, we have knowledge about the popularity of chocolate bars compared to the other items we sell. Similarly, if we store sales data information in a database, that database can be thought of as housing the knowledge about our store’s candy sales.

With our knowledge about the sales performance of chocolate bars in our store, we can make decisions about product placement, how much inventory we need to maintain, and many other aspects of retailing.

The graph above conveys the relationship among data, information, and knowledge. What the graph shows is that as connectedness among data increases, understanding increases. Connected data becomes information, connected information becomes knowledge, and connected knowledge becomes wisdom.