COST OF INFORMATION

Cost of Information Information has a number of different costs. What are the costs of obtaining good quality information? 1. Financial costs 2. Human resource costs 3. Time costs

What are the costs? Information is never free and there is always an associated cost. Management usually perform a costs/benefit analysis to make sure the costs of gathering information do not outweigh the benefits.

Costs of Data Collection Costs of employing an expert to design data collection forms. The setting up of questionnaires to collect data. Costs involved of people performing interviews. The costs of people employed to work through documents to record data. Costs of buying information from a third party (indirect DC).

Costs of Data Entry Human resource costs – the costs of any staff performing data entry, costs of training these staff may need, costs of any specialist staff needed for programming etc. Time costs – the entry of data, especially using keyboards. This can slow down the whole process to the production of the final information. Hardware costs – sometimes by spending money on automatic methods of data entry using barcodes, OMR, speech recognition etc. the human resource cost can be lowered.

Costs of Processing and Maintenance Once data has been collected it must be input into an ICT system for processing and then will need to be maintained e.g. Keeping data in the database or other system up to date. Taking back up copies of data for security. Small changes to the structure of the program or database so that relevant processing can occur. These activities incur costs and fall under three main categories. Financial costs, human resource costs and time costs.

Financial Costs Data may need to be transferred from one place to another using expensive communication lines. Outside firms may be used to ensure the data is backed up off site. Consumables costs such as printer paper and toner.

Human Resource Costs Staff processing questionnaires, checking OMR scanner. Specialist staff needed to program the database to extract certain details. Programming staff for specialist software. Staff may need to be employed to analyse the information from the system and to produce meaningful reports for different groups of people.

Time Costs Processing large amounts of data takes time and many ICT systems have millions of records to process and extract certain information. Some reports maybe quite complex and take time to produce, then they need to be passed to the relevant persons. The backing up of large amounts of data is time consuming.

Question The costs of collecting, inputting, processing and maintenance of data to produce information are not just measured in financial terms. State two other costs associated with producing quality information and how do they arise?

Answer The cost of good quality information is not just measured financially. There are other costs involved in the collecting, inputting, processing and maintaining data include human resource costs and time costs. Human resource costs for example can arise as staff could be required for the distribution the inputting and processing of questionnaires, specialist staff may also be required to analyse the information from the system to produce meaningful reports. Time costs can potentially arise as large amounts of data can take a long period of time to process as many ICT systems have millions of records to process and extract information. The backing up of this vast amount of information - especially off site - also is highly time consuming.

Task Identify TWO different ways of: Collecting data and the costs involved; Entering data and the cost involved; Processing data and the costs involved; Maintenance of processed data and the costs involved;

Individual Research Investigate the Tesco Club Card or Nectar Card and research what data is gathered? what happens with this data? Does this data become knowledge? Is the information gathered up to date, accurate and complete? What are the costs involved in collecting, processing and maintaining all this information? What problems are there with these cards? Are there any privacy issues?