Tuesday, November 19, 2013

The Potential Value of Information

The business's potential depends on how it unleashes its information potential. 

Data is raw, unorganized facts that need to be processed. Data is simple, random and unorganized; on the other hand, information is processed data. Information is structured and presents facts in context to targeted situations and conditions that facilitate business in making the right decisions at the right time. Given this assertion, there is no limit to the value of information in the digital economy.

Information only has a value when it has been used. When information has been used to make an informed management decision to develop the right product, enter a new market, exploit a new channel or having the information to be able to conduct day to day operations (which have an output value) etc. The enabling value of information can be captured in this way and an information lifecycle developed from it – different information is required at different points in the decision and operational delivery chain.

The value of information is qualitative, measurable, and defined uniquely to an organization: IT must bring to the table innovative solutions that meet customers’ needs, while reducing the cost to market, without the sacrifice of strategic goals. If done well, information achieves its value. On the flip side, information is also something that can hinder the achievement of strategic objectives, having it unavailable, lost, stolen, and / or compromised. There are some direct impacts on strategic objectives, but most impacts are operational, and therefore treated with all the other operational risks to the business and mitigated accordingly.

Information does not live alone but permeates to everywhere in the businesses, thus, the value of information is not isolated. The effort of valuing information independent of its association to the value of related tangibles seems a difficult, if not futile, exercise. Perhaps we should first work to identify how information is associated with the valued tangibles of businesses; products and resources; like information flows in processes for example, then its own value will become readily apparent and quantifiable by association. 

Information Potential directly impacts business's potential of organization: Potential value all depends on how the information will be used again in the future and this is often exceptionally uncertain. Information may never be used again or it may be used multiple times. Unless you can predict how it might be used again for tangible gain, it is difficult to say what, if any, potential value. The art and science of information management are to optimize its usage and achieve its value and full potential.

Common Information Management Weakness: The problems most organizations have are 1). Do not understand what raw material they have to play with (poor information management); 2). Do not applying worthwhile evaluation to it to reveal the inherent value, but mostly 3). Do not understand why they should do these things in the first place.

The purpose of Information Management is to process raw data, abstract information from it, then gain knowledge and insight/foresight from the abundance of information, in order to build an intelligent business.


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