Managing Information for the Competitive Edge

PART 5: ASSESSING THE VALUE OF INFORMATION

Introduction

The problem of establishing the value of information has confounded economists and information scientists for many years. On the one hand, definitions of value have proved elusive as scholars have sought to differentiate among such varied concepts as apparent value, consequential value, exchange value, dollar value, social value, and use value. On the other, definitions of information have been equally problematic as theorists have grappled with separating information message or content from information process or delivery and both of these from information context or use. They have had to cope with the consequences of interpreting information as a resource but one with special attributes that prevent it from conforming to the accepted norms of economic behavior. As the study of the creation, control, flow, dissemination, and use of information has evolved and matured, sophisticated models and frameworks have been developed to explain some of these complexities.

In his article, Michael Koenig analyzes literature that deals with assessing the value of information from three different perspectives. The first uses quantitative techniques such as cost-benefit analysis to calculate the cost of providing information relative to the benefits or value derived from it. While the magnitudes of the effects tend to vary across studies, the findings are consistent in demonstrating that investment in information services generates handsome returns. The second set of literature examines the information environment of productive organizations. Regardless of whether the studies undertaken were in library and information science, management, economics, or sociology, they all confirm that the more productive and innovative organizations are characterized by the free flow in information into, out of, and within the company, and the high priority given to information access by senior managers. The third and concluding view presented concerns the characteristics of productive information workers. Here, too, findings across studies are consistent in showing that more productive individuals have greater access to and make more use of information. Koenig's review provides some comfort to those seeking to promote and garner support for their information services.

Whereas Michael Koenig provides a broad survey, David Bawden focuses in on the specific concept of added value as it is applied to information networks and data services. He draws on the work of Robert S. Taylor who, in his book Value-Added Processes in Information Systems (Norwood, NJ: Ablex, 1986), articulated what it actually means to add value to information services. Bawden discusses Taylor's six ways that libraries may add value to information: ease of use, noise reduction, quality, adaptability, time and money saved for the user. He then goes on to describe how value may also be added to information services through selection and packaging, subject analysis, information analysis, the user interface, context setting, information for innovation, and the creation of an information-rich environment. Though he is a strong proponent of enhancing information systems and services, he notes that adding value can be expensive and warns that to recover costs user charges may need to be imposed thus widening the gap between those who can afford access to value added information services and those who cannot.

Adding value by itself, however, is not sufficient for the survival of information services and systems. As budgets shrink and costs undergo closer scrutiny, it becomes imperative for information managers to be able to demonstrate the value of their processes, products, services, and systems to senior mangers in terms that are meaningful to them. The two remaining articles present techniques and evidence that can be used to convince decision makers that the benefits resulting from the information center of the organization substantially outweigh the costs of maintaining it. It stands to reason that before providing information, staff must first determine the types of information managers need and value most. Perceptions about the value and benefit sought from information services may differ between users and providers. To determine the priorities of organizational users, Marianne Broadbent describes the use of an instrument called Priority and Performance Evaluation (PAPE). The input from PAPE facilitated development of a set of information service options which could be ranked and used to assess the performance of the service on those factors which respondents identified as being most meaningful to them. Once critical products and services have been identified, the financial costs of provision need to be determined. Broadbent demonstrates the application of cost-benefit analysis to a current awareness service to help choose between several different modes of providing service.

Readers who require empirical evidence to support their claims regarding the value of information and information centers to senior managers will find it in the work of Jose-Marie Griffiths and Donald W. King. These researchers are arguably the most experienced consultants and prolific writers in the area of evaluation of information and information centers. In the course of nearly 300 projects carried out over the past twenty years, they have devised, tested, and refined measures, models, and methods to assess the performance, effectiveness, cost and benefit of information provision in public and private sector organizations. Typically, they show that professionals spend a substantial amount of time acquiring, reading, and using information. They calculate the costs in dollar savings, timeliness, quality, and productivity that would be incurred if the services of a corporate information center were not available. Their findings across organizations and professional groups such as engineers, scientists, lawyers, and administrators are remarkably consistent and impressive. They provide persuasive data to convince even hardened skeptics of the value of information.

Many consultants, scholars, and researchers have taken up the challenge to assess the value of information. The Additional Readings list some of the more notable efforts.