Business

The difference between information and knowledge

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We frequently hear the words Information and Knowledge used as if they are the same thing.

Firstly, let’s look at Knowledge. Knowledge is what we know. It also contains our beliefs and expectations. “If I do this, I will probably get that.” Crucially, the brain links all these things together into a giant network of ideas, memories, predictions, beliefs, etc.

Information allows us to expand our knowledge beyond the range of our senses.
Information is processed data whereas knowledge is information that is modeled to be useful.

To illustrate the difference between information and knowledge, let us take an example. A customer contacts his broker to conduct a transaction and the distinctions between information and knowledge for this interchange are:

Customer: “I have an account with you, its number is 76190. What is the balance in my account?” (This is INFORMATION)

The customer-care executive possesses KNOWLEDGE on how to operate her worksation, how to talk to customer, how to verify that caller is authorized person, how to interpret customer request, how to interpret account data, and how to explain it to customer. That knowledge may be considered “How-to” knowledge. In addition, the executive possesses (or can obtain from others or from support systems) other kinds of knowledge such as concepts about customers, customer accounts, and brokerage in general. The exective obtains from her system INFORMATION such as: Account holder’s name, needed password, type of account, account restrictions, account balances.