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For most of the evolution of the business management function, information quality has not been a major strategic asset, but “has been perceived and thought about as simply one aspect of decision-making (…) only one of the many dimensions of decision-making and often not a very important one” (Marchand, 1990, p. 8).
Thinking about the business value of information quality and its relation with profitability, some authors (Brophy & Coulling, 1996; Cortada, 1996; Garvin, 1988) mention that quality, in general, increases profits by gaining the consumers preference and obtaining a bigger market share. With information the same occurs, because quality lowers the costs of production and the adequacy of the information product or service to the user’s needs making it preferable to the ones who need and use it (Marchand, 1990, pp. 15, 16). Therefore cost plays a significant role to lower the price charged to the user of that information, making it usable.
Key Terms in this Chapter
Competitiveness: Competence of an organization or country to produce and sell products/services that meet the quality of the markets at the same or lower prices and maximize returns on the resources consumed in producing them.
Market Intelligence: Data and information collected by commercial and industrial organizations about their competitive environment to support good decision making. Informs organizations about what products develop, for what customers, at what cost, through which distribution channels, reducing the uncertainty that a new product/service development always brings with it. Makes possible to compare our market share with our competitors and take actions to maintain or improve that share.
Information Overload: Occurs when excess of information suffocates businesses and causes employees to suffer mental anguish and physical illness. Information overload causes high levels of stress that can result in health problems and the breakdown of individuals’ personal relationships.
Information Quality: Quality information is needed to clear decision-making about what products develop, for what customers, at what cost, through which distribution channels, reducing the uncertainty that a new product/service development always brings with it. It warrants best results when competing with other organizations. To be considered of quality, information must meet several criteria such as: completeness, accessibility, accuracy, precision, objectivity, consistency, relevancy, timeliness, and intelligibility.
Information Value: The value attributed to information produced or acquired by organizations, entities and persons, and delivered in the form of an information product or service. Information has no implicit value in itself since it depends on its use, purpose and context. Its value is related to the results that it will allow obtaining and it’s dependable on its context.
Business Management: The activity of conducting all the necessary operations in order to make the organization grow, benefiting all the shareholders and stakeholders and the society in general. It involves several specialized functions like Finance, Marketing, Operations, Human Resources, Production, etc.
Strategy: The way an organization chooses to do his business in order to surpass competition and gain consumers preference. What is going to do, how, for whom, using what resources, and so forth. It’s the plan to conduct business, maximize profits, allocate the needed resources, and stay in the market as long as possible. Includes foresee what can happen, using forecasting methodologies and tools, in order to avoid problems or, if they happen, be prepared to minimize their effects.