DIKW model

This is an adaptation from Russell L. Ackoff, "From Data to Wisdom," Journal of Applied Systems Analysis

The DIKW model assumes the following chain of action:

1. Data comes in the form of raw observations and measurements.
2. Information is created by analyzing relationships and connections between the data. It is capable of answering simple "who/what/where/when/why" style questions. Information is a message, there is an (implied) audience and a purpose.
3. Knowledge is created by using the information for action. Knowledge answers the question "how". Knowledge is a local practice or relationship that works.
4. Wisdom is created through use of knowledge, through the communication of knowledge users, and through reflection. Wisdom answers the questions "why" and "when" as they relate to actions. Wisdom deals with the future, as it takes implications and lagged effects into account

Data has commonly been seen as simple facts that can be structured to become information. Information, in turn, becomes knowledge when it is interpreted, put into context, or when meaning is added to it. There are several variations of this widely adopted theme. The common idea is that data is something less than information, and information is less than knowledge. Moreover, it is assumed that we first need to have data before information can be created, and only when we have information, can knowledge emerge.

Data are assumed to be simple isolated facts. When such facts are put into a context and combined within a structure, information emerges. When information is given meaning by interpreting it, information becomes knowledge. At this point, facts exist within a mental structure that consciousness can process; for example, to predict future consequences, or to make inferences. As the human mind uses this knowledge to choose between alternatives, behavior becomes intelligent. Finally, when values and commitment guide intelligent behavior, behavior may be said to be based on wisdom.

Data
Specific local properties
1: factual information (as measurements or statistics) used as a basis for reasoning, discussion, or calculation (the data is plentiful and easily available.)
2: information output by a sensing device or organ that includes both useful and irrelevant or redundant information and must be processed to be meaningful.

Information
Specific local properties
(1): knowledge obtained from investigation, study, or instruction
(2) : intelligence, news
(3) : facts, data.

Knowledge
Specific local properties
(1) the range of one's information.

Wisdom
Specific local definition
(1) accumulated philosophic or scientific learning: knowledge. (2) wise attitude or course of action.

According to these definitions, data is the basic unit of information, which in turn is the basic unit of knowledge, which itself is the basic unit of wisdom. So, there are four levels in the understanding and decision-making hierarchy. The whole purpose in collecting data, information, and knowledge is to be able to make wise decisions. However, if the data sources are flawed, then in most cases the resulting decisions will also be flawed.