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Characteristics of Good Information
Data capture, handling, recording and processing ─ by whatever means ─ incur costs and do not produce value.
It is only when data are communicated and understood by the recipient and are thus transformed into information, that value may arise ─ providing that the information is used to improve decision making. Good information is that which is used and which creates value. Good information is:
•. relevant for its purpose
• sufficiently accurate for its purpose
• complete enough for the problem
• from a source in which the user has confidence
• communicated to the right person
• communicated in time for its purpose
• that which contains the right level of detail
• communicated by an appropriate channel of communication
• that which is understandable by the user
The various qualities are developed below.
Information must be relevant to the problem being considered. Too often reports, messages, contain irrelevant parts which make understanding more difficult. Relevance is of course much affected by many of the qualities below.
The level of accuracy must be related to the decision level involved. At operational levels information may need to be accurate to the nearest penny, £, kilogram or minute. On the other hand a Sales Manager at the tactical level will probably be best suited to information rounded to the nearest £100 whilst at the strategic level roundings to the nearest ten thousand pounds or higher.
What is required is that the information is complete in respect of the key elements of the problem. This means that there must be close liaison between information providers and users to ensure that the key factors are identified. For example, a supermarket chain in making a strategic decision whether or not to place a new superstore on the outskirts of a town would identify such things as population density, road access, presence of competitors and so on as key factors in the decision and would not try to include every detail about the town in their initial analysis.
Confidence in the Source
Confidence is enhanced when:
• the source has been reliable in the past
• there is good communication between the information producer and the manager.
For example when the manager has been consulted over the content, format and timing of reports and there is frank discussion over possible uncertainties and inaccuracies, confidence will be increased. Especially at strategic levels, management will cross check information from various sources to increase confidence in the message.
Communication to the Right Person
It is quite common for information to be supplied to the wrong level in the organisation. A superior may not pass it on to the person who needs it whilst a subordinate may hold on to information in an attempt to make himself seem indispensable.
Information suppliers need to analyse the key decision points in an organisation in order to direct information exactly where it is required.
Good information is that which is communicated in time to be used. The need for speed can conflict with the need for accuracy although modern processing methods can produce accurate information very rapidly. Delays in data gathering, processing or communication can transform potentially vital information into worthless waste paper.
The timing of regularly produced information is also important. Information should be produced at a frequency which is related to the type of decision or activity involved. Too often reports are produced routinely at quite arbitrary intervals ─ daily, weekly, monthly and so on. At operational levels this may mean a requirement for information to be available virtually continuously. At other levels much longer intervals are likely to be appropriate.
The level of detail should vary with the level in the organisation; the higher the level the greater degree of compression and summarization. Sometimes information, particularly at lower levels, has to be very detailed to be useful. Because of the need to be concise and to direct attention to where it is needed exception reporting is frequently used for control information. Exception reporting is a system of reporting which focuses attention on those items where performance differs significantly from standard. These exceptions are thus brought to the manager’s attention saving his time.
Exception reporting is only appropriate in situations i.e. where a plan exists and it is required to keep performance in line with the plan. It is thus more applicable to lower and middle management rather than to top, or strategic, management.
Users of information of whatever level, must not be overloaded with unnecessary information. The information system must act as a selective filter.
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