chapter 6 : Valuing Organizational Information

Organizational Information

Information is everywhere in an organization

Employees must be able to obtain and analyze the many different levels, formats, and granularities of organizational information to make decisions

Successfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performing

Levels, formats, and granularities of organizational information


Information Granularities

Refers to the extent of detail within the information (fine and detailed or “coarse” and abstract information)



The Value of Transactional and Analytical Information

Transactional information – encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks

Analytical information – encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks



Transactional information
E.g. withdrawing cash from an ATM, making an airline reservation, purchasing stocks
Compile a list of additional transactional information examples
These could include daily sales, hourly employee payroll, product orders, shipping an order

Analytical Information
also includes external organizational information such as market, industry, and economic conditions
Analytical information is used to make ad-hoc decision.
E.g. trends, sales, product statistics, and future growth projections
Compile a list of additional analytical information examples
These could include cost/benefit analysis, sales forecast, market trends, industry trends, and regulations

The Value of Timely Information

Timeliness is an aspect of information that depends on the situation
Real-time information – immediate, up-to-date information
Real-time system – provides real-time information in response to query requests
Some decisions require weekly information while others require daily information
Organizations such as 911 centers, stock traders, and banks require up-to-the second information

The Value of Quality Information

Business decisions are only as good as the quality of the information used to make the decisions

You never want to find yourself using technology to help you make a bad decision faster

Characteristics of High Quality Information





The Value of Quality Information

Low quality information example



Understanding the Costs of
Poor Information

The four primary sources of low quality information include:
Online customers intentionally enter inaccurate information to protect their privacy
Information from different systems have different entry standards and formats
Call center operators enter abbreviated or erroneous information by accident or to save time
Third party and external information contains inconsistencies, inaccuracies, and errors

Potential business effects resulting from low quality information include:
Inability to accurately track customers
Difficulty identifying valuable customers
Inability to identify selling opportunities
Marketing to nonexistent customers
Difficulty tracking revenue due to inaccurate invoices
Inability to build strong customer relationships

Understanding the Benefits of
Good Information

High quality information can significantly improve the chances of making a good decision

Good decisions can directly impact an organization's bottom line