Valuing Organizational Information CHAPTER 6 Valuing Organizational Information
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
Overview Employees must be able to obtain and analyze the many different levels, formats, and granularities of organizational information to make decisions
Transaction information examples withdrawing cash from an ATM making an airline reservation purchasing stocks shipping an order daily sales employee payroll its primary purpose is to support the performing of daily operational tasks
Analytical information examples cost/benefit analysis sales forecast market trends includes transaction information, external organizational information its primary purpose is to support the performing of managerial analysis tasks
ad-hoc decisions a business might base on analytical information building a new plant hiring or reducing workforces introducing a new product
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
The four primary sources of low-quality information Online customers intentionally enter inaccurate information to protect their privacy Information from different systems that have different information entry standards and formats Call center operators enter abbreviated or erroneous information by accident or to save time Third party and external information contains inconsistencies, inaccuracies, and errors
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
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
Opening Case Questions: Searching for Revenue - Google Determine if Google’s search results are examples of transactional information or analytical information Describe the ramifications on Google’s business if the search information it presented to its customers was of low-quality Review the five common characteristics of high-quality information and rank them in order of importance to Google’s business Explain how the Web site RateMyProfessors.com solved its problem of low-quality information