Infoeconomics

Infoeconomics

Copyright: © 2020 |Pages: 21
DOI: 10.4018/978-1-7998-2760-3.ch008

Abstract

The chapter discusses economics of informing or infoeconomics, which refers to costs and benefits of informing agents and to their contribution to organizational performance. Controversies questioning contributions of IT/IS to productivity (IT productivity paradox) and to competitiveness (IT commodification argument) are discussed. Several methods of assessing costs and benefits of informing agents are proposed. Assessing benefits from IT/IS, data, and knowledge is challenging since their impact is usually not immediately visible. The challenges have become more pressing with the data analytics and big data trends. Several research cases are used to demonstrate relationships between IVO aspects and infoeconomics. It is argued that a business process management model and balanced scorecard methodology are reliable guides for study and management of infoeconomics. The implications of big data and cloud computing on infoeconomics are discussed throughout the chapter.
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Introduction

Economics of informing, or infoeconomics for short, refers to the part of organizational economics that intersects with organizational informing agents. This part of organizational economics is influenced by IS, knowledge, wisdom, and the management of organizational data. Infoeconomics has a benefit and a cost rubric. Another useful stance is that of organizational performance, which can be understood in terms of efficiency (productivity expressed in tangible measure of money, quantity, and time) and effectiveness (the accomplishment of any significant goal formulated in organizational plans, strategies, and management or professional realms).

Infoeconomic analysis is focused on the contribution of informing agents to organizational performance. Such an analysis takes into account other IVO aspects discussed in this book. This IVO slant differentiates infoeconomics from studying the sheer relationship between organizational performance and IT. The domain of infoeconomics represents a manager’s test bed for the payback from data, knowledge, information (in IVO, the meaning outcome of interpreting data), and IT assembled in IS.

The cases presented in the preceding chapters carry infoeconomic connotations which this chapter will explore. The discussion will start by looking at some general and controversial issues of evaluating economic effects of IT/IS, which have occupied academic and management discourse. The discussion will proceed to exploring IVO-based measures of efficiency on the organizational level. Next, relationships between infoeconomics and other IVO aspects will be demonstrated by taking a look back at the topics of previous chapters and the case organizations. The infoprocesses perspective will be emphasized as particularly important for practical purposes. The escalating trend of renting IT and IS services will be addressed in the end of the chapter.

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