I Can’t, Can You? Valuing Information

By Chris Walker posted 10-07-2013 10:30

  

NB:I’m using “information” in an all-encompassing context in this post so that I don’t have to differentiate between data, content, and information.

Information is a tool; no one buys a tool for the sake of the tool. People buy tools for what can be produced with them. Information has inherent value that can’t always be consistently, reliably, and definitively quantified.

On September 26, 2013 I participated in a Tweetchat moderated by AIIM’s intrepid community manager, Bryant Duhon. Bryant managed to wrangle up a bunch of us to discuss the value of information; you can read the unedited wrap up here. Participants were a bunch of smart people that I highly recommend following on Twitter (you can get to them via the wrap up link).

We were supposed to be chatting about various aspects of the value of information. What became abundantly clear, really quickly, was that this is no easy task. Most of what was said was more about the cost of information (cost of creation/acquisition, cost of lost info, cost of unsecure info, etc.). We all agreed that information is an asset, but how do you assign a dollar value to it?

There was mention of things like increased productivity as a result of systems deployed. However, even that does not quantify the value of the information itself. On the other hand, it`s fairly obvious that information that can`t be accessed has, at best, zero value. At worst it has a negative value (or value to your competitors) because it’ll be used against you.

For a couple of days after the Tweetchat I was thinking about how I would go about assigning value to information. What really struck me is that the value of information is not fixed. Whether it’s financial statements, my resume, a maintenance handbook, marketing brochures, etc., they have no value until something is done to achieve an outcome. Even then, the value wouldn`t necessarily be the same for all stakeholders.

My resume is a tool that gets me a job; is the value of the resume the same to me as it is to my employer? What about to the head hunter that effected the hiring? My resume has potential value. In order to realize the value something needs to be done with or to it.

Corporate financial statements have a different value depending on who is reading them, and for what purpose. Even as the issuing organization, the value changes depending on the purpose. In one case the value of the financials is in avoiding sanctions for failure to file and meet regulatory obligations, in another the value is in the amount of investment to be had from potential investors.

When we (vendors, systems integrators, consultants) talk to clients and prospects about solutions, ROI, and information’s value, we’re not talking about changing the inherent value of information; we’re talking about using, handling, and controlling information. When a client of mine saved $250K per year by changing how invoices are handled, it didn’t change the value of the invoices, it reduced the labour costs of processing the invoices.

There are definitely cases where having good information leads to good business outcomes, and we pretty much all agree that without information we’d be in deep doo-doo. But maybe our attempts at trying to assign value to information should stop at “it’s worth a lot, but we can’t always put a number on it.” Maybe information is one of those resources whose value is only quantifiable after the outcome has been determined or when we’re missing it.

Perhaps what Damian Webber said about processes applies to information as well; “processes have no value - they contribute to something that has value”. Maybe we need to start thinking of information in terms of raw material; it`s only what you do or create with it that has true, quantifiable value.



#information governance #InformationGovernance #ECM #EIM #informationmanagement #value
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Comments

10-17-2013 08:31

Many business do place a value on some of their information. The information that is used to gain and protect a patent/trademark has a monetary value of the protected 'product'. That will include current sales, expected sales, value/price if sold, etc. Those numbers go into the decisions on what amount to insure to cover business loss, etc.
The 'dance' is to find that dividing line of ancillary information that is needed, from the rest of the stuff that helps to run work and a business day (but no value). Other information may seem ancillary by folks so conservative decisions are made to keep it but evidence over time belies their beliefs. Often tracking to gain that evidence is not done well so there is chaff in the wheat.
There is cost to retaining that valued information so you try to find ways to lower that cost, therefore cost is always talked about. The more we improve our 'learning' of how information is used as it ages, the better we will identify the clean wheat from the chaff. Of course that comes under the cost conversations....

10-15-2013 05:57

The key here is that information has 'potential' value and that its value is only ever apparent at any point in time when its context is taken into account. Context is driven is heavily wrapped up in the aggregate of other information and knowledge available. However, this doesn't excuse the need to formally value information as part of any responsible governance or similar process - I think it just necessitates that any valuation needs to be general in nature. 'Its worth a lot' is therefore a great starting place. Also, taking steps to identify that 'its worth nothing' or 'its worth less than the cost of keeping it' should all be achievable.

10-11-2013 16:44

...I nod my head in agreement: http://4most.wordpress.com/2010/09/01/docvalue/ :-) Point well made!