May 3, 2016 | by Wayne Smith

Business Intelligence for Project Management: DIKUW (Part 1)

In previous articles, we have stated that project management is more efficient and effective when using the appropriate tools for the job. They referred to collecting and storing project data and information in automated environments for future use. This article will address what is frequently labeled knowledge management, or business intelligence. In this article, we will describe a theoretical model which explains how data can be transformed into higher levels of business intelligence that can be used as a basis for business decisions.

Data, Information, Knowledge, Understanding, Wisdom (DIKUW) Hierarchy

You may be familiar with the DIKUW Hierarchy from a college systems theory course. The hierarchy is typically presented as being comprised of either four or five layers of increasingly complex information. The five layer model by systems theorist Russel Ackoff is a little easier to conceptualize and apply to business intelligence. This model features data on the first layer, information on the second layer, knowledge on the third layer, understanding on the fourth layer and wisdom occupying the top layer.

Many people use the words data and information interchangeably, but they have very different meanings when working with systems models. Since the differences between the terms can become a bit nebulous, you should really think of the layers as a spectrum of nuanced definitions continuously morphing from one layer to the next. The lines should be thought of as grey areas instead of clear demarcations.

Project Management Data Models

An elementary data model that is commonly used in project management is the spreadsheet. It may be a basic spreadsheet like Excel or a more sophisticated interface based on a collaborative database like Smartsheet. The important thing to keep in mind is the cell’s relational aspect to the rows and columns of the spreadsheet or collaborative database. The column is typically used as a primary definition or description for all of the data elements in the rows in that column.


Data is a fundamental building block of all information, knowledge, understanding and wisdom. A datum (data element) is a discrete fact or observation. An individual datum is difficult to interpret because it does not have any context, or it has very little context and purpose. Each data element should always be true. If it is not true, it is not data but garbage. This is where the concept of “garbage/in – garbage/out” originates. For example a date in an individual cell of a spreadsheet without the context of its row and column definitions will constitute a data element with no context and meaning.


Information consists of data synthesized with other data to give meaning. It has context, relevance and purpose. Information implies that it has some usefulness to the reader. It will typically answer one or more Who, What, When and Where questions. If we add a column title, say “Project Start Date,” to our spreadsheet, the date gains context and meaning. This cell now represents the starting date of some project which is a form of information.


Knowledge is more abstract and elusive than data and information. Knowledge consists of selected information synthesized with other appropriate information to create new information and knowledge. It implies that information is structured, organized and interpreted and is useful to the reader. Knowledge typically addresses “How to” questions. Our spreadsheet user will use his/her knowledge to interpret how this “Project Start Date” can be used to increase his or her knowledge about the project. He or she can compare this date with current date, future dates or other items such as available resources.


Understanding is yet more complex than knowledge in that it implies an appreciation and comprehension of “Why” something exists. Understanding is a cognitive, analytical, and probabilistic process that integrates the interpretation of existing knowledge with new information to create a new level of awareness. By analogy, understanding differs from knowledge as learning differs from memorizing. Our spreadsheet user will use the information contained in the “Project Start Date,” synthesize it with his/her knowledge to determine “why” this date exists. For example, perhaps this is the first date when resources will be available to begin.


Wisdom is the highest level of the human consciousness. Here, one evaluates the lower levels of understanding based on the person’s existing aesthetic, ethical and moral values. One attempts to arrive at some judgment based on his or her pre-existing and evaluated understanding. Wisdom is the realm of philosophical questions and contemplation. It is a process that attempts to discriminate right from wrong, good from evil and can answer “If, then” questions. As for our spreadsheet user, “wisdom” may be reflected in understanding that the “Project Start Date” falls in the holiday season, therefore will not likely be acceptable by other parties involved.

Now what?

Our next article will use these fundamental building blocks to educate you on the application of a few state-of-the-art business intelligence tools that are currently available in the market. Some of these can effortlessly transform the data contained in our spreadsheets into useful and timely knowledge and understanding. We will explain how using business intelligence software is the most effective means to deliver the right project information to the right people.