Valuing Organizational Information CHAPTER 06 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

LEARNING OUTCOMES 1.Explain how information differs throughout an organization. 2.Assess the impact of low-quality information on an organization and the benefits of high-quality information on an organization. 6-2

ORGANIZATIONAL INFORMATION Employees must be able to obtain and analyze the many different levels, formats, and granularities of organizational information to make decisions Information Granularity—Refers to the extent of detail within the information (fine and detailed or coarse and abstract) Successfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performing 6-3

ORGANIZATIONAL INFORMATION Levels, formats, and granularities of organizational information 6-4

THE VALUE OF TRANSACTIONAL AND ANALYTICAL INFORMATION 6-5

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 6-6

THE VALUE OF TIMELY INFORMATION Most people request real-time information without understanding one of the biggest pitfalls associated with real-time information—continual change The timeliness of the information required must be evaluated for each business decision You never want to find yourself using technology to help you make a bad decision faster 6-7

THE VALUE OF QUALITY INFORMATION Business decisions are only as good as the quality of the information used to make the decisions Issues with low-quality information: –Missing information –Incomplete information –Duplication of information –Wrong information –Inaccurate information 6-8

THE VALUE OF QUALITY INFORMATION 6-9

THE VALUE OF QUALITY INFORMATION Characteristics of high-quality information include: –Accuracy –Completeness –Consistency –Uniqueness –Timeliness 6-10

THE VALUE OF QUALITY INFORMATION The four primary sources of low quality information include: 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. 6-11

UNDERSTANDING THE COSTS OF POOR INFORMATION 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 6-12

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 The success of the organization depends on appreciating and leveraging the true value of timely and high-quality information 6-13