UNIT 2 : CHAPTER 6

Chapter 6: Valuing Organizational Information

The Business Benefits of High-Quality Information

New perspectives and opportunities can open when we have the right data that we can turn into information and ultimately business intelligence. Information is everywhere. When addressing a significant issues, employees must be able to obtain and analyze all relevant information so that they can make best decision.

Since information is comes from the different level, formats, and granularities the employees must be able to correlate it when making decisions. Information granularity mean to extent of detail within the information (fine and detailed or coarse and abstract).

Information Type: Transactional and Analytical

TRANSACTIONAL INFORMATION contain all the information within a single business process or unit of work. Its primary is to support daily operational task. Company need to capture and store transactional information to perform operational tasks and repetitive decisions as analyzing daily sales reports and production schedules to determine how much inventory to carry.

Level, formats and granularities of Organizational Information

ANALYTICAL INFORMATION encompasses all organizational information and its primary is to support the performing of managerial analysis tasks. This useful when making important decisions such as organization should build new manufacturing plant or to hire additional sales personnel.

Four Primary Traits

INFORMATION TIMELINESS

Timeliness is aspect of information depends on the situation. Some information can be relevant even that is a few days or weeks old but certain can be almost worthless. For 911 response centres, stock traders, and banks require up-to-second information but company as insurance and construction companies require only daily or even weekly information.

Real-Time Information mean up-to-date information or quickly. Its system provide real-time information in response to requests. Mostly company use this system to uncover key corporate transactional information.

INFORMATION QUALITY

Information inconsistency happen when same data element has different values while Information integrity issues happen when a system produces incorrect, inconsistent, or duplicate data. This can causes manager consider the system reports invalid and will make decision based on other source. 

Low-quality information including:

• Completeness                                  -    Customer’s first name missing.
• Another issues with completeness  -    Street address contains only a number 
• Consistency                                     -    Duplication of in the spelling of the last name.
• Accuracy                                         -    Inaccurate information because same number phone.

Four primary reason for low-quality information are:

• Online customers intentionally enter inaccurate information to protect their privacy.
• Different systems have different information entry standard and formats.
• Data-entry personnel enter abbreviated information to save time or erroneous information by accident.
• Third-party and external information contains inconsistencies, inaccuracies, and errors.

Understanding the Cost of Using Low-Quality Information

      Consequences that occur due to using low-quality information to make decision are:

• Inability to accurately track customers
• Difficulty identifying the organization’s most valuable customers.
•  Lost revenue opportunities from marketing to non-existent customer.
•  Difficulty tracking revenue because of inaccurate invoices.
• Inability to build strong relationship with customers.

                             Understanding the Benefits of Using High-Quality Information

      Improve the chances of making a good decision and directly increase an organization’s bottom line. It not automatically guarantee that every decision made going to be a good one, because people ultimately make decision and no one is perfect. But, information ensure that basic of the decision is accurate.