Some weeks ago (2013-10-7 to be exact) I posted this about trying to assign value to information. Thanks to the discussions the post generated on Linkedin and on this blog I realised I was approaching the issue from the wrong angle. Doug Laney (of Gartner & the Center for Infonomics) and Juerg Hagmann (of itopia) get special mentions for really steering me in the right direction.
Let me start by saying that I completely disavow whatever it was I said in the closing paragraph of my previous post on this topic.
The mistake I made was that I was looking at the issue from an Information Management point of view. I really should have stepped back 20+ years in my career and applied an accounting thought process. I think we’re all pretty much agreed that information is an asset; if that’s the case then the real challenge lies in determining which class of assets information belongs to. The challenge is complicated because:
a) Not all information is used the same way;
b) Some information can fall into multiple classes;
c) Information is not depleted as it’s consumed (retention/disposition adds a different layer of complexity);
d) It could be argued that, for some types of information, value increases with time unlike more “traditional” assets whose value depreciates;
e) Some of the future economic benefit may actually be the avoidance of future economic sanctions or penalties.
For those of you not familiar with what an asset is (the accounting version):
· It’s a resource (may or may not be tangible) that is under the organization’s control or ownership;
· It’s a resource that will provide future economic benefit;
· Assets are carried on the Balance Sheet, not the Income Statement;
· Quoted from the IFRS Framework "An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise."
Some responses to the original post posited that information only has value if it’s being used. Uhm, no.
Whether it’s being used or not information has value. Think about earth moving equipment; whether it’s sitting idle or grading a road it still has value. The value of the asset is based upon acquisition costs and future or potential economic value, not actual economic value. Information that’s not being used is not valued at zero; it is merely an asset that isn’t currently generating any economic benefit. If people really thought that then why are they loathe to toss out all those documents they’ve been hoarding for years but haven’t looked at (Ha!!! I got you, you information hoarders). Prior year budgets, completed contracts, old operating procedures, paid invoices, etc. all have potential future economic benefit. That’s why we keep them. They also have potential benefit to our foes if they contain a “smoking gun” which is why we ought to dispose of them as soon as we are legally able and are certain that they provide no positive benefit to us.
Assigning value to information is possible, but it requires understanding how the information was acquired and how it’s going to be used. You can’t use the same metrics and methods for a purchased subscriber list destined for telemarketing as you would for HR policies developed by internal resources.
I tell my clients to focus on high value, high risk information, but without understating the acquisition and intended use of the information, there’s no real way to determine which information is high value and/or high risk.
#InformationGovernance #EIM #information governance
#informationmanagement #value #ECM