The hidden costs of corporate information sourcing

“Ignorance costs far more than information”: an adage confirmed by the many studies that have attempted to assess the considerable cost of a lack of information. Thus, the need to have the right information to make the right decision is widely accepted. That’s why we’re prepared to spend a lot of time finding the information we need. But is this search time effective? Published studies show that this is not the case. Acquiring strategic information comes at a price. And this price can be apparent or hidden, measurable or non-measurable. So why do we spend so much time looking for information? And what are the solutions for optimizing search efficiency?

20% of managers’ time is devoted to finding information

The development of the Internet in business has led to a profound digital transformation of human activity, particularly in the corporate world. The amount of time executives spend searching for information seems to have fallen significantly over the last 20 years, thanks in particular to productivity gains made possible by the use of new applications. However, a very significant part of their activity is still dedicated to collecting and processing information. This is true for managers and middle managers, but even more so for executives and senior managers.

The various studies on the subject are fairly consistent and show an evolution over time:

• Back in 2001, the International Data Corporation published a white paper entitled“The high cost of not finding information“, stating that “the knowledge worker spends about 2.5 hours a day, or about 30% of the working day, looking for information… This share rose to 60% for company directors”.
• In 2007, an Accenture survey of over 1,000 middle managers in major companies showed that these employees spend almost 2 hours a day, or 25% of their time, looking for the information they need to do their jobs, and when they find it, it’s often wrong.
• In 2013, a McKinsey study confirmed that research and collection time averages 1.8 hours a day, or 9.3 hours a week, i.e. 20% of working time.
• More recently, the Association Information et Management estimated that the average time spent searching for information without finding it was 7.5 hours a week, or almost 20% of working time.

The first hidden cost of information sourcing is therefore the time spent by managers on this time-consuming activity. And the higher you are in the hierarchy, the more this time increases. The hidden cost is therefore even greater among company directors, who generally enjoy higher remuneration.

Why does finding information take time?

• Managers’ lack of training in effective information retrieval
  According to various studies, the main problem is a lack of knowledge about how to find the right information. There are also other reasons why so much time is spent gathering data, such as the difficulty of obtaining accurate information on the market and the competition. As a result, the quality of the information used is often unsatisfactory, creating the risk of accidental use of erroneous information.
• A profusion of different types of information that is difficult to use
  The more the world becomes digital, the more human activity generates new data: business management systems, social media, applications, open data, the Internet of Things, etc… Since the beginning of the web, the number of indexed sites and pages has grown exponentially, not to mention the deep web, which is not indexed by search engines. The result is a saturation of available information, and the difficulty of exploiting it correctly. As a result, more than half the information collected is in fact of no value to managers, as it is often erroneous or obsolete.
• The multiplicity of information sources and systems makes it difficult to compile data.
  The more information systems there are, the harder it is for users to find what they’re looking for. According to AIIM, the international association for information management, nearly 30% of companies have more than 10 different internal systems. As a result, over 75% of information managers are unable to find the right information, within their company, when they need it. This has a major impact on the company’s efficiency and speed of execution.
• Poor internal information dissemination
  Each department carries out its own research and has information that the others don’t have. Indeed, any organization necessarily generates “silos” that compartmentalize information and knowledge. However, new collaborative systems have made it possible to reduce this information retention, by creating cross-functional exchange channels. But it’s still common for the same job to be carried out several times within the same company. And even more so, to create information asymmetries within the organization.

What are the consequences for the company?

• Loss of productivity: The time spent searching for documents, and the loss of these documents, has an impact on employee productivity, and therefore on the company’s profitability. This lack of information management results in high costs.
• Lost performance and opportunities: When information is not properly structured, consolidated and shared, workflows are not optimized. Decision-making processes are then hampered, leading to insufficiently well-founded, or worse, erroneous decisions. These errors have an impact on business performance, and therefore on the company’s profitability. Time wasted results in long response times to customer requests, and the content of information, when retrieved, is sometimes unsatisfactory because it is incomplete.
• Overloaded computer storage systems: There are many documents stored locally, and manual backups are often accompanied by handling errors. The IT department is then regularly called upon, and must devote time and resources to resolving these errors. Documents saved locally on workstations, then on the corporate network, and also in e-mail attachments, then exist in triplicate. This leads to an explosion in the volume of files stored on servers. This unnecessary storage leads to costs for additional servers or cloud memory.
• Information leakage: When an employee leaves, his or her workstation is shut down, containing, among other things, locally saved documents. On the one hand, a lot of information is definitively lost, and on the other, the confidentiality of these documents is not guaranteed, as they may have been kept by the employee.

How can I reduce the time it takes to find information?

Business profitability depends, among other things, on good management of information flows, so it’s highly beneficial to have an integrated information system adapted to the organization and the challenges of information management. Here are a few things to consider:

• Simplify access to information by interconnecting systems. The first step is to centralize data, or rather to integrate information systems, aggregating relevant information. It is then necessary to organize the information so as to know where it is and avoid redundancies. Each type of information must therefore have a unique place and then be available in the systems actually used by users as part of their day-to-day activity.
• Automate to reduce information processing time
  The majority of business projects involve cross-functional teams, or at least several employees from the same department. Your EDM must therefore enable you to work collaboratively, via workflow processes that simplify document flows. By setting up document or file validation circuits, and creating alerts if processing times are exceeded, you ensure that all processes are managed from end to end, quickly and efficiently.
• Organize internal and external information flows. It is important to distinguish between information from external sources and information produced in-house. The latter are part of the company’s core business. As they are more sensitive, they require different levels of confidentiality and appropriate protection. External environmental data, on the other hand, can be managed more flexibly. External data management can even be outsourced to a specialized service provider, freeing up internal resources.
• Share and target information distribution according to the needs of internal communities
  Companies are still organized in silos, despite significant improvements in information systems, which enable better internal information sharing. However, certain departments within the company continue to have access to information that others do not, or only at a much later stage. This no longer makes sense for external information, which needs to be disseminated to the right people at the same time. It is therefore necessary to organize this distribution internally.
• Train managers and executives in effective information search, sharing, analysis and protection methods. Various communication and training tools can be put in place: Webinars, internal communications, training sessions, tutorials, etc. It’s also by developing good individual practices that we improve collective productivity.

Find out how Humind can help you save time in your research. Focus your resources on your core business: analysis to facilitate the creation, production and marketing of your products and services.

Since 2007, Humind has been providing its customers with a complete intelligence solution, tailored to their organization and business. This solution combines targeted, qualified data, an information system that can be integrated with the company’s own, and responsive support to turn the system into a real competitive advantage.