CHAPTER 6

Valuing Organizational Information

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Learning Outcomes

Describe the broad levels, formats, and granularities of information

Differentiate between transactional and analytical information

List, describe, and provide an example of each of the five characteristics of high-quality information

Assess the impact of low-quality information on an organization and the benefits of high-quality information on an organization

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Overview

Employees must be able to obtain and analyze the many different levels, formats, and granularities of organizational information to make decisions

• withdrawing cash from an ATM• making an airline reservation• purchasing stocks

• shipping an order• daily sales• employee payroll

Transaction information examples

its primary purpose is tosupport the performing of daily operational tasks

Analytical information examples

its primary purpose is tosupport the performing of managerial analysis tasks

• cost/benefit analysis• sales forecast• market trends

includes transaction information,external organizational information

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ad-hoc decisions a business might base on analytical information

building a new plant hiring or reducing workforces introducing a new product

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The Value of Timely Information

Timeliness is an aspect of information that depends on the situation Real-time

information – means immediate, up-to-date information

Real-time systems – provide real-time information in response to query requests

Real-time systems can help organizations make faster and more effective decisions

The Value of Quality Information

Low-quality information example

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The four primary sources of low-quality information

1. Online customers intentionally enter inaccurate information to protect their privacy

2. Information from different systems that have different information 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

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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

– which increases buyer power

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The Benefits of High-Quality 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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Opening Case Questions:Searching for Revenue - Google

1. Determine if Google’s search results are examples of transactional information or analytical information

2. Describe the ramifications on Google’s business if the search information it presented to its customers was of low-quality

3. Review the five common characteristics of high-quality information and rank them in order of importance to Google’s business

4. Explain how the Web site RateMyProfessors.com solved its problem of low-quality information