Data and information can be categorized based on their representation for the human processing. Following table summarizes the four main types of data together with examples.
The characteristics of Valuable Information
The value of information depends on their usefulness in the decision making process. This value can be judged based on a set of features that can be identified in the information.
They are as follows :
1. Accurate: Accurate information is error free. Errors could be occurred due to different reasons. If there is some problem in the knowledge required for the process, output (information) may have errors. At the same time, if input (data) contains some errors, the output will not be accurate. This is known as garbage in garbage out (GIGO). Inaccurate information is not error free.
2. Complete: Complete information contains all the important facts to make clear decisions. For example, an investment report may present all possible benefits and profits without details of cost that will be required.
3. Economical: Information should also be relatively economical. Decision makers must always balance the value of information with the cost of producing it. For example, if collecting the data takes lots of resources and time, it is not economical.
4. Flexible: Flexible information can be used for a variety of purposes. For example, Information on how much inventory is on hand for a particular part can be for,
- a sales representative to determine the sales plan
- a production manager to identify possible constraints for the production
- a financial executive to calculate the current assets figures of inventory
5. Reliable: Reliability of information describes the correctness of the information. If there are any problems with respect to correctness of data, it will definitely affect the reliability of information. For example, if the reliability of data collection method is poor, it will directly affect the information that will be produced.
For example, prediction of prices based on rumors (not past variance information), is not reliable.
6. Relevant: The relevance of information is determined based on the usefulness of information with respect to the decision making process. For example (E.g.A),, a drop in timber prices cannot be used to predict the price fluctuation in computers.
7. Simple: Simplicity in the representation of information is also a very useful feature utilized to improve the usability of information in the decision making process. Too many information could affect the simplicity in the presentation. Therefore it is better to provide interactive customization to determine simplicity. Providing too many information is known as information overloading.
8. Timeliness: Decisions should be made at the right time to achieve effectiveness. Timely information refers to providing information at the right time. For example, if you can get to know today’s weather forecast before you leave home, you can decide whether to bring an umbrella or not.
9. Verifiable: If it is possible to confirm the reliability of the information about its correctness (validate), it becomes verifiable Information. If you are not sure about a particular information (say foreign news) heard from a radio channel, you can search about it using Internet.
10. Secure: The value of information could be lost due to issues such as unauthorized user access or intentionally damaging its existence. Therefore, it is important to make steps to protect valuable data and information. For example, use of passwords to protect data and information.
It is important to note that the values of these quality attributes may vary from one piece of information to another. It affects their usefulness in the decision making process. For example, at the Stock Exchange, information about market forecast may not be very accurate but if the timeliness is poor, the total value of information will be very poor.
Value of information
The value of information is calculated with respect to its usage in decision making and return on benefits due to the decision taken. Therefore, the cost of information has to be deducted from the benefits in order to calculate the value of information.
For example, someone wants to invest in stock market but he/she is not familiar with the business procedure, he can then recruit an assistant to evaluate stock market conditions to determine an investment plan. This assistant will have to gather stock market information and generate reports to according his clients requirements. However, if the return of investment is not significant with respect to cost incurred to produce the investment plan, it is worthless to recruit an assistant for this activity. In other words, the value of investment plan is very low.
