Value as calculation and value as contribution to the organization

Information Outlook, March, 2003 by Jan Sykes

CAN THERE BE YET ANOTHER ARTICLE WRITTEN ABOUT "VALUE" AND INFORMATION PROFESSIONALS?

Given the increased importance of information resources and the evolving role of information professionals, it is imperative that we have clarity on what value means and where and how we add value to the organizations for which we work.

The American Heritage Dictionary of the English Language, Fourth Edition (New York: Houghton Mifflin Company, 2000), defines value as:

1. An amount, as of goods, services, or money, considered to be a fair and suitable equivalent for something else; a fair price or return.

2. Worth in usefulness or importance to the possessor; utility or merit.

Value as an Amount

Business executives are continually scrutinizing their operations for ways to be more competitive, to differentiate themselves in the marketplace, reduce costs, and improve productivity. In a sluggish economy, all departments and functional units within an organization are held accountable for their contribution to the business. Thus, information professionals have a heightened awareness of the need to measure and tie the financial contribution of their work to overall organizational goals.

To participate in the strategic activities of their organizations, information professionals must be able to speak the language of business, and that always involves finances. They must grasp business fundamentals, including company operations, corporate culture and values, the industry in which their company competes, the inherent complexity in developing and selling products or services, competitive vulnerabilities, customers, and the numbers that are critical for the organization's success. They can look to colleagues, mentors, additional coursework, and participation in professional associations to acquire greater knowledge of business fundamentals. The company's financial report is also an extremely important, and frequently overlooked, source of information.

With a big-picture view of the industry and competitive environment at the forefront of their minds, as well as a clear vision of corporate goals and performance targets, information professionals can prioritize their activities to help the company reach its financial goals. In a recent article on strategic competencies, Keith Orndoff suggests that records and information managers "functioning at a high strategic level in an organization must get close to the business of the business rather than be preoccupied with a service function at a tactical level, a function which can be easily outsourced." He further notes that when the professional's view is "external and broad there will be a constant search for improvement in value and organization-wide relevance." (1)

Demonstrating savings achieved from centralized purchasing and management of information resources or the strategic outsourcing of certain information management activities and quantifying efficiencies gained from broader access to key resources are two ways information professionals can prepare for conversations about the financial performance of their function. One information professional reports having repaid his annual salary twice in three years through contract discounts he negotiated for online services. Note that value is not always about saving money. Sometimes it is necessary to invest money in information resources to help the organization make more money. Being able to present a sound business case for such investment increases the likelihood that those funds will be approved.

Cost-benefit assessments and return-on-investment (ROI) scenarios for information services also document some of the value companies receive from investments in information resources in terms of actual dollar amounts. Savvy information professionals now routinely collect data from their user population so they can calculate how the timely delivery of targeted information contributes to developing new business opportunities, reducing cycle time, shortening learning curves, or meeting other business objectives. They can then compare the costs of providing information or knowledge resources with the hard and soft benefits obtained for specific projects and make well-founded assumptions about the financial benefit to the organization. These assessments still have an element of assumption and of anecdotal input, but the more data collected, the more accurate the value calculations will become.

For example

* A client in a large technology company frequently asks the information center staff to develop profiles of the small and middle-market businesses that submit proposals for partnering with the larger company. The information center's findings regarding size of the soliciting company and its products and personnel drive decisions about whether to further test the soliciting firm's capabilities. Every time a firm is ruled Out because of the findings of the information specialists, the technology company saves many hours and thousands of dollars in the time of product development specialists, attorneys, and negotiators. When a company meets the initial selection criteria, the information specialists' findings jump-start the negotiation process, because everyone involved knows more about the potential partner. Benefits like these are difficult, but not impossible, to quantify.