The requirement to determine information value is going to be increasingly important in a digital workplace environment as decisions are going to have to be made about quantifying the value of the information being created both to prioritise internal investment and to value the company in a market environment. This valuation is important in acquisitions. If a company has a strong commitment to information management, especially in terms of information quality and information findability, then it may have a higher market valuation than a notionally better performing company where the potential integration of information systems may be very costly and time-consuming.
There are many different approaches to information valuation. For example there is an awareness of the information foraging approach of Pirolli and Card at Xerox PARC, probably because of the word ‘foraging’, but probably few have read the original paper. In it the authors state that information foraging relates to accessing, seeking and handling information sources. They go on to make the point that search will be adaptive to the extent that it makes optimal use of knowledge about expected information value. Information value has taken the place of information relevance as the basis for the information evaluation process.
With the rise of Management Information Systems in the 1970s a substantial amount of research started to be paid to assessing the value of these systems, which of course were to some extent a forerunner of intranets and other decision support applications. In 1974 Charles Gallagher wrote a seminal paper (Academy of Management Journal (1974, 17(1), 45-54 closed access) that considered various approaches to determining value, and came to the conclusion that the only effective approach was to ask the decision maker to estimate information value. Then in 1993 Rashi Glazer published details of his InfoValue model for the assessment of the value of an organisation’s information assets.
There has been a great deal of discussion over the years about whether information should appear on the balance sheet of an organisation. In principle this would identify it as an asset of the organisation and hopefully justify management attention. After all, the argument goes, the goodwill from patents and goodwill appears in the balance sheet, so why not information. The issues were carefully considered by Nevine El-Tawy and Magdy Abdel-Kader in 2013. In their paper (closed access) they highlighted the problem of determining the value of information on a rigorous enough basis to satisfy the rules that govern national and international accounting with respect to what is determined to be an asset.
In 1999 Carl Shapiro and Hal Varian were looking for ways to monetise information value, focusing on valuing information services rather than information assets. They wrote a very influential book, Information Rules , in 1999. A year later 2000 Doug Laney, then at Meta Group, and subsequently at Gartner, developed the concept of infonomics as a portmanteau combination of information and economics. There is a very comprehensive Wikipedia entry on infonomics which lists mainly articles published in the trade press and also refers to Gartner publications which are only available to subscribers. Intriguingly a presentation given by Doug Laney on his approach to information asset valuation and infonomics when he was at Deloitte in 2011 is not listed.
What emerges from over forty years of research by management scientists, economists and consultants is that there are many different approaches to determining information value but none of them provide an unambiguous answer. This is important in terms of responding to senior managers who wish to have a return on investment calculation made on the costs of implementing a new intranet against the benefit to the organisation. The core question is what model do they wish to use in assessing the value of the information system? A search in Google Scholar for ‘information value’ returns over 60,000 papers, and very few of these will be duplicates. As a last resort the requirement may be to calculate the time saved by investing in an intranet as the next best approach. That has been comprehensively dismissed in an analysis by James Robertson. As John Mancini, President of AIIM, recently highlighted in a blog post the quest goes on!