Chaffey and Wood Business Information Management © Pearson Education Limited 2005 Slide 01.1 Chapter 01 Introduction to Information Management.

Chaffey and Wood Business Information Management © Pearson Education Limited 2005

Slide 01.1 Chapter 01

Introduction toInformation Management


Slide 01.2

Objectives and outcomes

• Overall objective:– To define the relationship between, and importance of,

data, information, knowledge and information systems to the modern organization

• Learning outcomes:– Explain how information management delivers value to

an organization– Demonstrate the relationship between data,

information and knowledge– Identify key management issues of information and

knowledge management


Slide 01.3

Management issues

• How do we leverage information to increase organizational efficiency and competitiveness?

• How can we harness the knowledge within our organization?


Slide 01.4

How important is information management?

Information concept phrase

Phrase anywhere on page

Phrase in title of page (in title:)

“Information management”

4,000,000 325,000

“Knowledge management”

3,200,000 135,000

“Information Systems”

6,800,000 451,000

“Information Technology”

7,800,000 766,000

Table I Occurrences of information related concepts in web pages indexed by Google. May 2004.Source: Google


Slide 01.5

Where is the emphasis?Where should it be?

Information Technology

Information Technology

The stress should be on the ‘I’ rather than the ‘T’ in ‘IT’ (Davenport, 2000).

Peter Drucker stressed the importance of information to organizational competitiveness in 1993 when he wrote:

‘The industries that have moved into the center of the economy in the last forty years, have as their business, the production and distribution of knowledge and information rather than the production and distribution of things’.


Slide 01.6The Importance of

Information in Today’s World

Three perspectives:1. The Information Society

2. Information Economy

3. The Information Age

What are the implications of each for us and managers?


Slide 01.7

The Information Society

Martin (1995) says of information:

‘Without an uninterrupted flow for this vital resource, society as we know it would quickly run into difficulties, with business and industry, education, leisure, travel and communications, national and international affairs all vulnerable to disruption. In more advanced societies, this vulnerability is heightened by an increasing dependence on the enabling powers of information and communications technologies.’


Slide 01.8

The Information Society defined

Information Society was defined by the UK INSINC working party on social inclusion in the information society in 1997 as:

‘A society characterised by a high level of information intensity in the everyday life of most citizens, in most organizations and workplaces; by the use of common or compatible technology for a wide range of personal, social, educational and business activities; and by the ability to transmit and receive digital data rapidly between places irrespective of distance.’


Slide 01.9

The Information Economy

• 1. Reach. How many in a market who are exchanging information.

• 2. Richness. The depth and media used for information.

• 3. Affiliation. Effectiveness of links with partners.

Source: Evans and Wurster (1997). Strategy and the New Economics of Information. Harvard Business Review. September-October, 1997, 70-82.

‘...every business is an information business… information is the glue that holds together the structure of all businesses’ (Evans and Wurster, 1997)


Slide 01.10Examples of business providing

information services?

• Financial Times (Business news and information at www.ft.com)

• Factiva (Detailed information about business performance at www.factiva.com)

• Experian (Information about customers such as credit ratings and profiling for targeted marketing communications from www.experian.com)

• Questia (Online subscription-based access is provided to published books and articles for students at www.questia.com)

• ScienceDirect.com (Online journal access for science and business researchers at www.sciencedirect.com)


Slide 01.11

The information age – when did it start?

• 300 BC Basic Chinese characters

• 387 BC Plato founded his academy

• AD 1455 The printing of the Bible with moveable type by Gutenberg in Germany

• 1651 – first modern library at Oxford University


Slide 01.12

Modern developments

• 1860 Typewriters use the QWERTY keyboard• 1876 Alexander Graham Bell introduced the first telephone • 1901 Marconi sends a radio signal • 1937 Atanasoff-Berry Computer (ABC), the world's first electronic

digital computer• 1947 First commercial computer – ENIAC (Electronic Numerical

Integrator And Computer). It weighed thirty tons and used 18,000 vacuum tubes

• 1969 First node on the US ARPANET, forerunner of the Internet• 1971 First e-mail sent; a computer engineer named Ray Tomlinson

sent the first e-mail message. He can’t remember the message, but he does remember choosing the @ symbol!

• 1991 First web site (http://info.cern.ch) published by Tim Berners-Lee


Slide 01.13

Information in today’s organization

• ‘Critically important to the survival and success of an organization is effective management of information and related Information Technology (IT). In this global information society—where information travels through cyberspace without the constraints of time, distance and speed—this criticality arises from the:

• Increasing dependence on information and the systems that deliver this information

• Increasing vulnerabilities and a wide spectrum of threats, such as cyber threats and information warfare

• Scale and cost of the current and future investments in information and information systems

• Potential for technologies to dramatically change organizations and business practices, create new opportunities and reduce costs’

Source: COBIT (2000) IT Governance framework


Slide 01.14

Information in today’s organization – Challenges – information overload

Storage Medium 2002 Terabytes Upper Estimate

2002 Terabytes Lower Estimate

1999-2000 Upper Estimate

1999-2000 Lower Estimate

% Change Upper Estimate

Paper 1,634 327 1,200 240 36%

Film 420,254 74,202 431,690 58,209 -3%

Magnetic 4,999,230 3,416,230 2,779,760 2,073,760 80%

Optical 103 51 81 29 28%

TOTAL: 5,421,221 3,416,281 3,212,731 2,132,238 69%

Table 1.2 Worldwide production of original information, if stored digitally

Source: Lyman and Varian (2003)


Slide 01.15

Challenges of information managementin the organization?

• Relevance – How do we find information relevant to our decisions?

• Accessibility – How do organizations make relevant information available to employees and partners through computer applications, web and e-mail? How is the knowledge used to apply information captured and shared between employees?

• Legality – How do organizations ensure they are using customer, employee and market information in accordance with legal and ethical standards?

• Security – How do we protect this information from accidental or deliberate threats?

• Value – How can this information help organizations reach their business objectives?


Slide 01.16

Using information to support processes

Figure 1.1 Generic organizational operating processes and management processesSource: PricewaterhouseCoopers, 2002


Slide 01.17

How information supports processes

Information enables organizations to:• Sense what is happening in the external

environment and respond accordingly through their strategy and tactics.

• Research demand for new products.• Monitor and control operating processes for

efficiency and improve them to save time or money.• Exchange information with partners such as

suppliers as part of their operational processes.• Communicate messages about brands and

products internally and externally.


Slide 01.18

Figure 1.2 Capital One web site Source: www.capitalone.com


Slide 01.19

Mini-case study – Capital One creates value through, information

• Capital One sends out one billion items of mail per year and handles 90 million inbound calls, 300 million outbound calls, 230 million Internet impressions and 40 million transactions per day.

• CIO Gregor Bailar highlights the role of information management:• ‘CIOs today need to be technology alchemists. They need to be

strong in professional technical methodologies so that their conversation is a disciplined one but, at the same time, they need to understand the business, be it banking, credit cards or loans.

• Their job is not to know the future of technology, nor the latest and greatest of delivery networks, but to be focused on balancing the set of business needs, and choosing or creating the best possible solutions that can be provided from a technical perspective.

• The CIO is expected to be involved not only in strategy development, but also in business and product innovation. Now, more than ever, CIOs are being held accountable for driving the business value, not just for keeping the lights blinking on the computers.’


Slide 01.20

Information and business value

Figure 1.3 An evaluation tool relating information to business value. An organization’s use of information on each axis can be assessed from 1 (low use of information) to 10 (high use of information) Source: Marchand (2000)


Slide 01.21

Why businesses adopt technology

Figure 1.4 Reasons cited by businesses for adoption of information technology Source: DTI www.ukonlineforbusiness.gov.uk/benchmarking 2003


Slide 01.22

Fundamentals of Information Management

Figure 1.5 The three strands of Business Information Management (Information, People and Technology resources)


Slide 01.23

What is Business Information Management

The process of actively managing information as a strategic resource for improving organizational performance.

This process involves developing strategies and introducing systems and controls to improve information quality to deliver value.

What are the key Who, What, When, Why, Where and How of BIM?


Slide 01.24

Data and Information defined

English (1999) defines the relationship between data and information as follows:

‘Information is data in context. Information is usable data. Information is the meaning of data, so facts become understandable.’


Slide 01.25

The data-information-knowledge transformation process

Figure 1.6 The data to information to knowledge transformation process Source: BIM


Slide 01.26

Data visualisation example

Figure 1.7 Summary information view of European flights from Birmingham International airport Source: www.flightmapping.com/Europe/flights-map.swf


Slide 01.27

The 4Cs of information transformation

• Context – Displaying a data item relative to other data items, such as in a time series or trend graph. Sorting data alphabetically or numerically is another example of contextualization.

• Calculation – producing derived metrics such as calculating a percentage capacity utilisation.

• Classification or categorization – grouping information into different categories, e.g. all flights into a particular country.

• Condensation – Aggregating or totalling information is always important in presenting business event data as summary information – for example, total sales on a route. Filtering is also used to summarise information, for example, “show me all flights that were delayed by at least two hours”.


Slide 01.28

Knowledge defined

English (1999) builds on his definition of information to define knowledge as follows:

‘Knowledge is not just information known, it is information in context.

Knowledge means understanding the significance of the information.

Knowledge is the value added to information by people who have the experience and acumen to understand its real potential.

Knowledge has value only to the extent that people are empowered to act based on that knowledge. In other words, knowledge has value only when acted on.’


Slide 01.29

The organizational system

Figure 1.8 The organizational system Source: BIM


Slide 01.30

The organizational environment

Figure 1.9 The organizational environment Source: BIM


Slide 01.31

Different forms of information

Figure 1.10 Different forms of information Source: BIM


Slide 01.32

Web pages indexed by search engines

Figure 1.11 Trends in number of web pages indexed by major search engines Source: www.searchenginewatch.com/reports


Slide 01.33

Autonomy Portal-in-a-Box™

Figure 1.12 Autonomy Portal in a Box™ Source: www.autonomy.com


Slide 01.34

The Information Lifecycle model

Figure 1.13 The Information Lifecycle Source: BIM


Slide 01.35

Records management for lifecycle management

British Standards Institute (BSI, 2001) defines records as:

• ‘information created, received, and maintained as evidence and information by an organization or person, in pursuance of legal obligations or in the transaction of business.’

Records management is:

• ‘field of management responsible for the efficient and systematic control of the creation, receipt, maintenance, use and disposition of records, including processes for capturing and maintaining evidence of and information about business activities and transactions in the form of records.’


Slide 01.36

Knowledge management defined

The European Guide to Best Practice in Knowledge Management defines knowledge as:

‘The combination of data and information to which is added expert opinion, skills and experience to result in a valuable asset which can be used to make decisions. It is the essential factor in adding meaning to information. Knowledge may be explicit and/or tacit, individual and/or collective.’

Mekhilef et al., 2003


Slide 01.37 European KM framework

Figure 1.14 The European Knowledge Management Framework Source: Heisig and Iske (2003)


Slide 01.38

Problems with KM

Knowledge Management issues are highlighted by the findings of a 1999 IDC survey of 255 US CIOs. The main problems noted were:

• Lack of understanding of KM and its benefits (55 per cent)• Lack of employee time for KM (45 per cent)• Lack of skill in KM techniques (40 per cent)• Lack of encouragement in the current culture for sharing (35 per

cent)• Lack of incentives/rewards to share (30 per cent)• Lack of funding for KM initiatives (24 per cent)• Lack of appropriate technology (18 per cent)• Lack of commitment from senior management (15 per cent)

See Chapter 6 for further details


Slide 01.39

Does IT Matter?

Carr (2003) suggests that Information Technology has become commoditised to such an extent that it no longer delivers a competitive advantage. Carr says:

‘What makes a resource truly strategic – what gives it the capacity to be the basis for a sustained competitive advantage is not ubiquity, but scarcity.

You only gain an edge over rivals by having something that they can’t have or can’t do.

By now the core functions of IT – data storage, data processing and data transport have become available and affordable to all…They are becoming costs of doing business that must be paid by all but provide distinction to none.’


Slide 01.40

The Productivity Paradox

In 1987, the MIT professor and Nobel economist Robert Solow, said:

‘We see the computer age everywhere except in the productivity statistics.’

• Financial Times (2003) reported that in the US, the annual rate of increase in output per hour from:

• Late 1970s and early 1980s was 2.6%• Late 1987 to 1995, it dropped to only 1.5%, despite the increase in

use of personal computer technology in organizations. • BUT 1995 increased to an average of 2.5%• 2002 5.3% • Third quarter of 2003 reached 9.4%, the highest rate for 20 years.


Slide 01.41

IT investment is not only about hardware – advantage comes through where and how implementation occurs

‘… Prof Brynjolfsson and colleagues found that of the $20m total cost of an enterprise resource planning (ERP) system, only about $3m goes to the software supplier and perhaps $1m towards the acquisition of new computers.

The $16m balance is spent on business process redesign, external consultants, training and managerial time. The ratio between IT investment and this "supporting" expenditure varies across projects and companies. But, over a range of IT projects, Prof Brynjolfsson believes that a 10:1 ratio is about right. Returns on these investments commonly take 5 years to materialise.’


Slide 01.42

People resources – Perspective 1

Internal end-user concerns include:

• Data quality – is it relevant, timely, accurate and easy to understand? (Chapter 10)

• Service quality – are the systems available when required at the speed required? (Chapter 11)

• Developing IT Skills – do I have the best skills to use information and technology? (Chapter 4)

• Applications – do I have the right tools to do the job? (Chapters 2, 3, 6 and 9)


Slide 01.43


Departmental manager or process owner issues include:

• Selecting providers – which internal and external suppliers of information management services do I select? (Chapters 2, 3 and 11)

• Applications selection – are the right applications available to support the performance of the area I am responsible for? (Chapters 2, 6)

• Integrating with other functions – how can I share information with other departments and shared processes? (Chapters 2, 10)

• Knowledge Management – how can the knowledge of my staff be shared and enhanced? (Chapter 5)


Slide 01.44


Chief Executive Officer (CEO) perspective includes:

• Contribution of IS to business – in terms of value-adding and cost control (Chapter 4)

• Strategic impact of IS – how can improved information management yield competitive advantage? (Chapter 4)

• Legal implications of information management – what are the legal risks? What are senior managers liable for in law? (Chapter 12)


Slide 01.45


IS Manager / CIO perspective includes:

• IS Strategy – how can IS expenditure support corporate strategy? (Chapter 4)

• Managing change and minimising risk – as new applications are introduced (Chapter 7)

• Resourcing – which technologies should be outsourced and which should be kept in house (Chapters 7 and 10)

• Security – are information services secure? (Chapter 11)


Slide 01.46


Customer or partner perspectiveincludes:

• Supply of quality information from organization

• Security of own information

• Integration of systems for transfer of information

• Support through enquiries made of partner organization


Slide 01.47

Information orientation

Information Orientation

• A concept or metric used to assess how effectively people use information and IT to improve business performance.

• 1. IO incorporates a people-centric view of information use [as opposed to a technological orientation].

• 2. IO is causally linked to business performance [hence our selection of ‘improving organizational performance’ as the sub-title of this text]

• 3. IO is an organization-wide issue, not limited to the IT department or other information management support functions.

• 4. IO applies universally across international borders. There are no significant differences between the senior manager responses in North America and Europe.

• 5. IO can be used as a key performance indicator over time to assess the effectiveness of management actions to improve information behaviours and values, information management practice and IT practices.


Slide 01.48

Different ways to categorize information resources

Figure 1.15 Different ways to categorize information resources Source: BIM

Chaffey and Wood Business Information Management © Pearson Education Limited 2005 Slide 01.1 Chapter 01 Introduction to Information Management.

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