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This article was downloaded by: [Clayton State University Library]On: 06 October 2014, At: 12:13Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK
The Australian Library JournalPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/ualj20
Pricing the invaluable: putting a value oninformation in the corporate contextKym Diprosea
a After completing a Bachelor of Arts degree at Melbourne UniversityKym Diprose worked in the personnel field. In 1990 she returned tostudy, completing a Graduate Diploma in Information Services atRMIT. Subsequently she has worked for Telstra, initially with TelecomAustralia's online products, then in their National InformationResource Centre. After completing a Masters Degree in 1995Kym moved into the Business Networking section of the TelstraResearch Laboratories. Her role there involves analysing how touse technology to improve information and communication flows inorganisations. This is her first published article.Published online: 13 May 2014.
To cite this article: Kym Diprose (1997) Pricing the invaluable: putting a value on information in thecorporate context, The Australian Library Journal, 46:4, 386-393
To link to this article: http://dx.doi.org/10.1080/00049670.1997.10755819
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Pricing the invaluable: putting a value on information in the corporate context
For practitioners working in information resource centres in
corporate environments, the provision of measures related to the
value of the information they provide is generally perceived as a
difficult and irksome task. There are difficulties reconciling the
gaps that exist between the true cost of providing information
and user judgements as to its value. There is no method by which
information use can easily be traced to cost-effectiveness or other
primary outcomes. And traditional methods of statistical process
reporting seem to have little relevance to the types of figures
desired by today's financial managers.
Manuscript received August 1997
This is a refereed article
SPECIALIST l'.\FnR~!ATI()'.\ Rbl1LRCE CE'.\TRES APPHR to be especially \'Ulnerable in the face of such confusion. These units are highly \isible cost centres. As such they commonly attract de-facto valuations as company management attempts to formulate their worth. Often decisions are made to close or radically downsize
such areas that seem to bear little relation to the expertise of the staff, the inherent value of the information provided, or even overheads. It might be speculated that such decisions are, in fact, more closely related to the credibility of the centre and the acceptance of it as an acti\'e and core participant in workplace operations. If this is the case, there are issues relating to the value of information as it is perceived \Vithin corporate emironments that need to be addressed in more detail than is evident presently
Influences on information value At the moment the core of published work on the measurement of the value of information is largely user driven. Whilst beginning to show their age, both Griffiths and Repo provide an excellent foundation to the literature about value and economics as they relate to information. According to these authors, most findings related to the
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Pricing the invaluable: putting a value on information
value of information are grounded in classic economic paradigms that deal with exchange and measurable values. The approaches used in the profession might include willingness to pay, the amount of use made of an item or product, or the analysis of impacts. There are different applications for these measures, but most fall within the spectrum of cost-benefit analysis and in most cases we find that the rationale for the effort put into information production and dissemination is based upon value-in-use.
It is becoming more and more apparent, however, that there is a gap between actual value and the assessment of that value - in other words, the cost of gaining and storing information is not equated with the benefits gained to an organisation. This is not a new concept: a 1990 survey of senior managers to whom the heads of the special libraries of 164 United States corporations report formed the conclusions that:
There is little managerial consensus on how the library adds specific value to the firm's performance or how value should be measured.
In the Australian context, john Thawley has used the judgement that there is little consensus on how libraries add specific value to a firms performance to reinforce a belief that:
Libraries in all sectors need to assume much higher visibility within their parent bodies and to implement output measures which reflect organisational objectives and customer needs ... Despite lip service being paid to accountability and performance measures, we have not truly embraced these new requirements.
In an attempt to gain some understanding of this gap between the cost of information and judgements as to its value a qualitative study was undertaken. It consisted of a series of individual interviews with managers and professional staff who worked within a single large organisation and who were of a level of seniority where their role encompassed active decision making. In each interview respondents were presented with a set of open-ended questions relating to their perception of information, its cost, value and
uses. It was believed that casting a wide net that allowed management information consumers to vocalise their perception of information in an unstructured, uninhibited way would provide clues regarding:
• what those managers perceive to be information;
• what method of evaluating information they can relate to and approve of; and
• whether there are any personal or corporate cultural attitudes that may influence decision-makers negatively or positively, than might be the case using more formal quantitative methods.
From the data gained in those interviews it was possible to conclude that information was recognised as a valuable commodity by the respondents and that the majority showed a quite sophisticated grasp of the concept. They acknowledged that they used a great deal of internal and external information to accomplish their tasks. They frequently used technology to manipulate, access and store information. On a working level, however, the corporate framework that had been built up around information makes the situation somewhat more complex. Communications regarding information policies and learning programs that emanate from the most senior level of management appeared to be disregarded or lost. The corporate culture did not encourage information use that was not motivated by practical needs, while the value of information was regarded as residing primarily in the actions promoted by its use, which in tum were
THE AUSTRALIAN LIBRARY )OURNAL NOVEMBER 1997
'The corporate culture did not encourage information use that was not motivated by practical needs .. .'
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Pricing the invaluable: putting a value on information
motivated almost solely by the profit motive. Creativity in information use was not expected nor especially valued.
The purpose behind this study was two-fold. On the one hand was the wish to gain an understanding of what indicators of information value are best understood and appreciated by management within a specific organisational setting, the summary of which is outlined above. On the other hand there was the expectation that there would be some data that presented conceptual possibilities relating to the value of information to be pursued through further study. A number of such possibilities did arise, the most important being the significance of information 'richness' within organisations, the disposable nature of information, and the effect technology has had on the perception of information.
'Rich' information media: the importance of personal networks One of the most important results to come out of the data was the sense of information as an individual responsibility rather than a corporate resource. A consequence of this is diversity in information use, resulting in conservatism on some fronts and an openness on others, depending on the attitude of the individuals concerned. Some of the interviewees indicated that they attempt to share information, whereas others considered that there was too much information too freely available. While many remarked on the need to maintain the security of information in a competitive environment there was no mention of any concerted attempt to regulate or systematise information flows across the company.
One of the methods by which the interviewees appeared to attempt to overcome this lack of standards regarding information dissemination or use was by using their personal networks both to gain information and to help interpret information already in their possession. The interviewees were conservative information users. They were concerned that the judgements they made, when based on minimal information, were (a) correct, and (b) in accord with current organisational trends and values. Consequently the high level of communication that was engaged in before information was acted upon would indicate a need for 'rich' information -information of a type not generally available from the corporate information centre.
It is well documented within information systems literature that information is used within organisations to reduce uncertainty. Uncertainty exists when there is a gap between known information and the amount necessary to accomplish a given task. The greater the uncertainty encountered in a situation, the more information will be needed to resolve it. No matter how great that uncertainty, however, the questions and answers that can relieve it are related segments within a standardised organisational model. An information service is often located within such an equation - it can provide answers to specific questions regarding competitors, markets or technologies - information that will reduce organisational uncertainties. In this context, however, we should be aware that:
It is obvious that the relationship between added information and reduction of uncertainty/complexity is positive. However, it is often hard to measure the monetary or utility value of information in terms of meeting an organisational objective. It is possible that an organisational activity (eg suppliers, customers) involves a high degree of uncenainty/ complexity, but has a low impact on the organisation's objectives.
Many library and information centres claim much of their value lies in their role of supporting continuous reductions in uncertainty, whenever and wherever this may be
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required in an organisation. They claim to create value because the information they supply is a resource used as a functional tool geared toward achieving corporate objectives. However, if we take into account that in this study information value is recognised largely as the contribution that information makes to the earnings of the company, the possibility that reducing uncenainty does not alway directly result in profit
ability lessens the impact of such claims.
To find true value in information as it is understood by the managers we need to move one step beyond uncertainty to the concept of equivocality. Equivocality is a concept that is found in information systems and organisational literature. An equivocal situation is one step beyond uncenainty - a state surrounded by ambiguity and confusion. There are multiple and conflicting interpretations that can be attributed to a particular organisational situation. Defining what are the correct questions is difficult and knowing where to search for answers is unclear.
Equivocality leads to the exchange of existing views among managers to define problems and resolve conflicts through the enactment of a shared interpretation that can direct future activities.
In equivocal situations more information does not necessarily increase learning or solve problems. In fact, it can lead to more confusion. What is imponant is that the information that is received can improve understandings or clarify confused issues and that this can be achieved in a timely fashion. Daft and Lengel explain that while formal organisational information systems can reduce uncenainty, the reduction of equivocality is best provided through 'rich' communication media that enable debate and clarification. They then classified five media types in order of decreasing richness:
1. face-to-face;
2. telephone;
3. personal documents such as letters or memos;
4. impersonal written documents;
5. numeric documents
concluding that rich transactions allow for rapid feedback and multiple cues so that managers can agree on a common interpretation of, and solution to, problems.
The reason for richness differences include the medium's capacity for immediate feedback, the number of cues and channels utilized, personalisation, and language rnriety Face-to-face is the richest medium because it provides immediate feedback so that interpretation can be checked. Face-to-face also provides multiple cues via body language and tone of mice, and message content is expressed in natural language.
Information obtained from a library or information centre is most often constructed of types three, four or five. Daft and Lengel acknowledge that media of low richness is very effective for the processing of standard data or well understood messages. They are less inclined to dwell on the fact that you have to be very careful in using 'media richness' in general terms: it is quite possible that one individuals' electronic mail may be far richer than another$ face-to-face conversation, as well as the likelihood that richness in different media can be influenced by how well established the relationship is between communicators. There can be no doubt, however, that the respondents in the discussed study found most value in information communicated through interpersonal media.
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Firstly they did so because in situations of high equivocality solutions were fornmlated in a co-operative fashion and implemented in the most timely fashion possible. Secondly, the technical specialists interviewed, whether they worked in finance, engineering, or law, tended to search from a discrete information pool, while managers needed to evaluate a far wider spectrum in search of the information they desired. However, in either case it became apparent that the most useful sources for this information lay in the personal network of the respondent. The high use of personal net -works indicates that these interviewees will attempt to find their information on an informal level before searching in a more structured way It also reveals to us that this informal method of searching must often provide the information necessary; otherwise the managers would not continue to find this source so rewarding.
The third consideration related to the high use of rich media types is the fact that in the search for a solution to an equivocal situation these sources may provide information that has already been processed for company fit. Such processing will occur for a number of reasons - the foremost is probably ensuring that the final decision resulting from the information gained coincides with corporate strategies. Personal networks create a form of self-protection because the information they provide has already been processed for corporate acceptability Part of the reason for the high use of networks may also be due to a lack of support on the part of the company about how and where to find information. Left to their own devices, these interviewees turn to the people that they find approachable, knowledgeable and trustworthy, rich communicators who are most likely to be members of their peer group.
What does this mean for the corporate information service? If the respondents in this study turn first to their personal network for information, and if it is in rich media that the most likely resolution for situations of high equivicocality can be found, then to be perceived as a provider of highly valuable information the service needs to be linked with and within personal networks. It needs to use rich communication media that enable high levels of feedback and immediate clarification of any information provided. They need to be located physically within reach of decision makers and able to contribute to debate and consequent subjective judgments. To do so would demand a greater skill level than many librarians currently possess, but it would appear that pursuing this type of professional development might increase the perception of their value immeasurably
One area of interest that has not yet been mentioned and needs further clarification is in regard to where desktop access to information fits in this scenario of 'rich media'. Many managers today, and certainly the majority of respondents in the discussed study, access most of their information from their desktop computer. This may range from confidential company data files to personal electronic mail to public domain information found via the Internet. Does the ease by which this information is accessed mean that it becomes richer for the recipients than might be the case if they had to physically move to get it, especially if there was a subsequent time delay before its receipt? Does this also have connotations for how the information is valued - does ease of access and access to ever increasing amounts of information make it merely another low-value consumer item to be used and then discarded, or just discarded, unused?
Disposable nature of inf onnation Information professionals within a corporate information centre thus need to see that information is one of the tools of the manager, an asset to be gained and utilised rather
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than an end in itself. There is moreover, no requirement to store or otherwise retain a large ponion of the information accessed. Indeed, most rich information, being oral, is never recorded at all. Consequently the second issue that emerged was the extent to which information was retained or disposed of.
Information is a functional tool for achieving corporate objectives. Most software systems today provide numerous report formats and most information centres ensure that information is customised - both examples of how information can be individually fashioned to ensure ease of interpretation and therefore maximum benefit to the recipient, all within the minimum time possible. The utilitarian nature of such information, however, means that it has a very specific purpose and therefore a limited life. The high relevance, timeliness and preciseness possessed by this information at the time that it is needed, means, perhaps paradoxically, that it depreciates rapidly During the next period of uncenainty or equivocality other information customised to that particular situation will be sought. In effect, we have moved into a situation where information is atomistic and disposable.
Consequently, information is still recognised as a concept understood to hold value as an entity in itself. But that value, always acknowledged as transient, is becoming more and more difficult to define within an organisational setting. Beyond the maintenance of records for legal or financial purposes, there seems little perception of value in historical information. Cenainly it is wonh considering that it is not necessarily the value of the information itself, rather the costs and benefits related to its storage, that is queried by managers. If information is used to reduce equivocality or uncertainty, once a level of cenainty has been reached what are the costs related to retaining that information? Likewise, what are the costs of storing and maintaining information that is no longer immediately necessary, or which exists, say, in monograph form and is stored only because it might be of possible future use?
The majority of the respondents in this survey were pragmatic in their view of information. Most acknowledged that they were information workers, and they understood that information was a commodity and that its acquisition involved a cost to the company. Many of those costs, however, were directly incurred and related to high-use materials. Consultants' repons were ordered by engineers and accountants, lawyers had their own copies of legislative material, information technologists maintained their own libraries of manuals. It was much less common for the respondents to directly concede that they recognised there were legitimate and sustainable costs involved with the storage or maintenance of information by a third pany such as a corporate information centre.
As a result it is possible to speculate that:
The dominant form of new knowledge in the Third Wave is perishable, transient, customized knowledge: The right information, combined with the right software and presentation, at precisely the right time. Unlike the mass knowledge of the Second Wave - 'public good' knowledge that was useful to everyone because most people's information needs were standardized - Third Wave customized knowledge is by nature a private good.
And as a 'private good' its costs are acknowledged if borne directly, rather than in a more co-operative, public (or corporate) manner. Also, as a 'private good' ownership of information is personalised and decisions regarding its storage or its disposal are made on an individual basis.
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Growing technological influences on information value Much of this change in the perception of information is a result of technological advances. The respondents believed that technology has made information more accessible, that it has become possible to easily manipulate data to obtain relevant information, and that information storage has changed significantly in the past few years. Technology contributes to the expedient use of information, to quick decision-making and greater productivity In this manner, technology is assisting in the access to and use of information in such a way that it contributes significantly to corporate goals.
In todays competitive environment managers are not attempting to be informed or knowledgeable, but victorious. They act on this need not only by accessing their personal networks but also by using technology to ensure that they have gained all the information that may be available to them in the minimum possible time-frame. Thus technology is instrumental in the acquisition and use of timely information that can then be used to gain competitive advantage.
Access to company databases may be considered in a similar vein. Not only is more data accessible, but many provide mechanisms whereby management is given opportunities to review trends or problems. Superior processing capabilities are also increasing productivity levels. A simple spreadsheet program on a personal computer can save large amounts of time. In the more sophisticated systems data is transformed to information without any need for human intervention. As a result the expectations of the recipient change. Instead of spending time manipulating data, the manager is able to immediately access useful information which thus becomes much more readily and effectively available, and as a result levels of uncertainty are reduced. In turn, as the manager uses ever-increasing amounts of information with greater control over the information environment, his or her perceptions of what is truly valuable and what is routine or irrelevant will evolve, and expectations will change.
There has now emerged a dimension formerly located within the separate domain of 'information technology', and described appropriately by that phrase, but one in which system design, construction or support is now transparent or inbuilt. A dimension that has become a separate entity, interactive, not only disposable but often temporary -perhaps just a voice on an electronic mail message. The relationship between information and technology is a complex one and changes to the way in which information is created, stored, processed and accessed has inevitable affected attitudes to it. While technology may not change the nature of the information itself, it may change the methods used to access the information, the format of the information and the amounts of information that are available. In turn, these changes will lead to shifts in the way that information is valued.
Conclusion In the light of the above discussion it is possible to speculate that it might be beneficial for library and information centres in corporate environments to evaluate their accessibility Are they located within the personal networks of their clients? Are they asked questions relating to the reduction of uncertainty or equivocality? Initial queries may be face-to-face but responses are by telephone, fax or electronic or internal mail. Do these methods influence perceptions of the richness, and value of the information? Also, how focused are these responses and how will they contribute to the company$ bottom line? These questions all touch upon the notions of richness, the disposable nature of infor-
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mation and the changes technology is making to user expectations. There is no easy way to value information but there are some means by which the provider of it can be judged to be valuable within an organisational context. Answers to these questions may ease the vulnerable position so many library and information units now find themselves in.
References 1. Griffiths, Jose-Marie (1982), The value of information and related systems, prod
ucts and services, In Martha Williams ed, Annual review of information science and technology, Vol 17, Knowledge Industry Publications, New York, p269-283.
2. Repo, Atto (1987), Economics of information, in Martha Williams ed, Annual review of information science and technology, Vol 22, Elsevier Science Publications, New York, p3-35.
3. Matarazzo, James M, Prusak, Lawrence and Gauthier, Michael R (1991), Valuing corporate libraries: a survey of senior managers, Special Libraries Association, Washington DC, pl.
4. Thawley, John (1993), The Australian library industry in transition - managing the future, Australian Special Libraries, 26(4), pl59-60.
5. Ragowsky, Arik, Ahituv, Niv, and Neumann, Seev (1996), Identifying the value
and importance of an information system application, Information and management, 31, p91.
6. Daft, Richard Land Lengel, Robert H (1986), Organisational information requirements, media richness and structural design, Management science, 32(5), p557.
7. Ibid, p560.
8. Dyson, Esther, Gilder, George, Keyworth, George, Toiler, Alvin (1994), Cyberspace and the American dream: a Magna Carta for the knowledge age, Release 1.2, http:// www townhall.com/pff/position.html
After completing a Bachelor of Arts degree at Melbourne University Kym Diprose worked in the personnel field. In 1990 she returned to study, completing a Graduate Diploma in Information Services at RMIT. Subsequently she has worked for Telstra, initially with Telecom Australia's online products, then in their National Information Resource Centre. After completing a Masters Degree in 1995 Kym moved into the Business Networking section of the Telstra Research Laboratories. Her role there involves analysing how to use technology to improve information and communication flows in organisations. This is her first published article.
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