Info ChatInformation costs
Andrew McAfee has posted a couple of great blogs (as usual) that mention the decline in “information costs”:
“Most of what I’ve seen recently strongly indicates that the sudden near-disappearance of information costs is bringing up a fascinating and consequential set of questions for organization designers and corporate leaders. They now have the freedom to place decision rights where they wish without being hampered by information costs. What are the long-term consequences of this great decoupling?”
While I certainly understand his point that Enterprise 2.0 technologies are allowing information to become available at a much reduced cost, I think he is missing, probably not addressing would be a more accurate description, part of the equation of the information cost calculation. Certainly E 2.0 tools which are often free open source, or extremely low cost, allow people access to information, and the ability to create information more cost effectively than ever before. However, there is still a large cost associated with capturing, storing, and disseminating structured transactional type data. Look at the market for ERP and BI as evidence.
Ask any company that has recently deployed SAP, and a BI tool on top of it if there is a disappearing information cost. Sure, you can create an RSS feed of an employee blog at virtually no cost or effort. But can you do so for information stored in an SAP Infocube of sales transactions? And secure it? Or add a continually updating scorecard to a marketing wiki page? Not to mention the cost of deciding who in the organization should have access to it, and what rules and processes must be aligned with displaying and distributing it.
I am actually very much in agreement with Mr. McAfee in principle. The day should and will come when companies demand their information acquisition, storage, and retrieval costs be minimal. Instead they will pay for the value-add applications that can mine, interpret, and analyze that information. Unfortunately, I think that there are too many parties, with too much leverage, to let information costs rapidly disappear overnight.
Things are never as simple as they should be…
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September 26th, 2007 at 10:30 am
I wonder if he took into account the cost of services and the implementation of these technologies. I think the reality and what we are seeing from a services perspective is a continual effort by companies to lower the implemenation and services costs. Maybe in generic fields that is happening, but in highly specialized fields, i don’t see the TCO dropping as fast.