The peculiar value of “information”

Its seems within corporate IT that the ‘information’ part of IT often plays second fiddle to the ‘technology’ part. This could be because technology is sexier or easier to understand or something that the IT organisation can control. Information however is the fundamental reason for IT in the first place, it is surprising then that ‘information value’ does not play a bigger role in how IT views itself and communicates its value. In a recent thread on a linked-in IT forum the question of the IT elevator pitch (an elevator pitch is your 30 second value proposition) came up for discussion, the thread was well attended with many suggestions especially around IT supporting business and providing tools, the concept of ‘information management’ was almost completely absent in the suggestions.

Before tackling IT’s role in ‘information’ it is worth covering some theory about the ‘value’ of ‘information’. The following comes from a paper in an accounting journal published around 2005 that takes an ‘accountants’ view of information as an asset and contrasts it to ‘normal’ assets such as a piece of machinery. It is instructive because it summarises many of the headaches facing those developing business cases for IT investments.

•          Information is infinitely shareable – a machine has limited capacity whereas information is unlimited to the degree it can be used simultaneously

•          The value of information increases with its use – information is only of value if it is used in some way, this also applies to machinery though the machine will also usually have intrinsic value as well

•          Information is perishable – a lot of information captured by organisations has a short ‘use by date’ for it to influence positively decisions or behavior, a machine can have a life of many years

•          The value of information increases with accuracy

•          The value of information increases when combined with other information

•          More is not necessarily better – someone should tell the data warehouse vendors!

•          Information is not depletable – it does not get ‘used up’ in use, a machine wares out overtime and this fact underpins the accounting concept of asset depreciation

The point of this paper was to show that the typical accounting approaches to valuing and depreciating assets are inappropriate for use with ‘information assets’. This is one reason why it is so hard to do an effective ROI on many IT investments. Funnily enough this analysis has not found its way into IT value debates. Perhaps it should.