MGT 300 - Chapter 6

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



Transactional information verses analytical information


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



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 include : 
           ~ Accurancy 
Are all the values correct ? For example, is the name spelled correctly ? Is the dollar amount recorded properly ?

          ~ Completeness

         ~  Consistency 
Is aggregate or summary information in agreement with detailed information ? For example, do all total fields equal the true total of the individual fields ?

         ~ Uniqueness
Is each transaction, entity, and event represent only once in the information ? For example, are there any duplicate customers ?

         ~ Timeliness
Is the information current with respect to  business requirements ? For example, is information updated weekly, daily, or hourly ?


Low quality information example




UNDERSTANDING THE COST OF POOR INFORMATION 
  • Four primary sources / reasons of low quality information :
  1. Online customers intentionally enter inaccurate information to protect their privacy
  2. Information from different systems have different entry standards and formats
  3. Call center operators enter abbreviated or erroneous information by accident or to save time
  4. Third party and external information contains inconsistencies, inaccuracies, and errors

  • Potential business effects resulting from low quality information :
~ 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


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