Matching Information Value to Protection Options

Placing a value on information is difficult. Organizations value information in their own ways. Some organizations may place a high value on certain types of information, such as customer contact information or orders. Others may find practically no value in the same type of information.

A report by the U.S. Department of Transportation^[1] notes that decision makers value information based on the ability of information to reduce costs, save time, improve decision making, and improve customer satisfaction. These dimensions make sense but can still be hard to quantify.

^[1] Value of Information and Information Services, Volpe National Transportation Systems Center, Research and Special Programs Administration, October 1998.

A general way to look at the value of information is to consider:

• The replacement value of the information

• The cost to create the information

• Opportunity cost

• Regulatory failure costs

Certain information is necessary if the organization is to operate properly. The costs associated with disruptions caused by loss of the information can be calculated directly. How much more would it cost to process returns, for example, if the customer history information is missing?

Even if the value of information cannot be determined directly, the cost to replace it can be. If the order database was destroyed, what would it cost to have all the orders entered by hand from paper records? By the same token, the cost to create information in the first place also places a value on it. A certain amount of the scientific grant money was absorbed by the cost of gathering cases. How much was that? What were the budget dollars associated with inside sales that can be attributed to order taking?

There are also measurable effects of lost opportunities. The value of the information associated with an order, for example, can be said to be the value of the order. Finally, costs associated with failing to comply with regulations are straightforward. The amount of money that might be spent on lawyers, fines, and judgments can be determined by laws and case history.

ILM uses the value of information to trigger decisions regarding the disposition of information. As value changes, actions may be taken on the data, such as moving the information to less expensive storage. Gross measures of value are useful to ILM in this regard. Even coarse value levels (important, useful, and garbage) will work in some ILM policies; in others, a dollar amount will be necessary.