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The High Cost of Not Finding Information
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high cost of not finding information
By
Susan Feldman
On Sept 23, 1999, NASA’s Mars Climate Orbiter
spacecraft disappeared. The spacecraft had flown nine-and-a-half
months and 416 million miles flawlessly. Scientists were stumped
at first about what had gone wrong. They had checked and rechecked
the calculations. It turned out that unbeknownst to the metric-based
NASA, its contractor had submitted acceleration data in pounds of
force instead of the metric equivalent, newtons. By not converting
the pounds to the metric measurement, the spacecraft was lost. A
costly information disaster. And an embarrassing one.
 In
an increasingly information-based world, we turn out complex products
that are less tangible than they are knowledge-based. As was the
case with the Mars Orbiter, we aren’t absolutely sure that
they will fly until they are launched. Software, market analyses,
weather advisories, aircraft, tires and other products, decisions
to invade other countries—these are all based on planning
and simulations that rely on having the right information. The very
complexity of the decisions we make and the products we manufacture
makes it impossible to check, test and retest them adequately enough
to be sure that they will function properly in any circumstance.
Information disasters are a growing threat, and one that few businesses
can ignore.
Information disasters
There are all kinds of information disasters.
Some are caused by wrong information. Some are caused by outdated
information. For instance, many years ago a manufacturing company
designed and built a new product based on a part that was no longer
manufactured. They had looked in an old parts catalog.
Missing or incomplete information plagues many
projects. One of the most visible examples happened in summer 2001
when a volunteer on a Johns Hopkins research project died when she
was given hexamethonium to inhale. Researchers had done a search
on PubMed and the Web to find out if there were adverse effects
associated with its use. What the researchers didn’t know
was that PubMed only goes back to 1966. The research on hexamethonium
was done in the 1950s. They also missed standard professional sources
of information like Toxline. Incomplete information is responsible
for the year that a major aircraft manufacturer wasted developing
a new product that its competitor had already produced 10 years
earlier.
Finally, there is the increasing problem of too
much information. In the case of the Three Mile Island Nuclear Power
Plant disaster, for instance, operators had so many error messages
thrown at them that they couldn’t identify the main cause
of the problem. With disastrous results. One wonders whether the
recent Northeast blackout can also be attributed to that cause.
Disasters of lesser or similar proportions happen
every day to enterprises that are dependent on good information
delivered in a timely manner to the people who need it. There are
several reasons for this dilemma. First, information is scattered
in multiple repositories and databases all over most organizations.
No one knows what exists or where it is, and there is no single
unified access point to it. That puts the enterprise at risk, particularly
after the passage of recent legislation like the Sarbanes-Oxley
Act that requires executives to take responsibility for what happens
within their companies.
Second, with the advent of the World Wide Web,
every professional worker has become a searcher, but without either
search training or a roadmap of what he or she is searching. Without
information training and skills, most people don't know where to
look, how to ask for what they are seeking or when it is OK to stop
looking. One answer looks very much like another unless the searcher
understands what constitutes valid information.
Third, most professionals are inundated with
too much information, and they have very few tools to help them
handle the flood. Everyone seems to be working longer hours and
getting less and less done. We are bombarded by e-mail, copies of
presentations, alerts of new interesting articles, meetings and
all of the other information trappings that go with being a knowledge
worker. We spend hours trying to track down something that we found
only yesterday, but it seems to have disappeared. We try to reach
colleagues who have missing pieces of the puzzle, and they and their
computers with the notes from that meeting in September have disappeared
for vacation or, worse, left the company altogether. In short, we
spend a lot of time spinning our wheels looking for things and not
finding them.
The costs of not finding information
There really is no metric we can use to compare
the value of a good decision to a bad one. How do we know that a
project has taken twice as long as it should have for lack of access
to information? The fact is that knowledge workers rarely turn out
measurable products, and each project is slightly different from
the one before. If they can't find the information on which to base
their output, they may have to submit poor quality work to meet
a deadline. Their burnout rate may be higher because job satisfaction
is low when workers spend their days unsuccessfully searching and
reworking information.
In 2001, IDC began to gather data on what not
finding information might cost an organization. We looked at knowledge
worker productivity, as well as at lost e-commerce revenue and the
increased costs that answering a call center call with a person
instead of an automated search system would bring. Here's what we
found:
How successful are most searchers?
We know that roughly 50% of most Web searches are abandoned.
That translates into 50% fewer online sales, 50% more frustrated
customers trying to solve a problem or get information, and 50%
more phone calls that must be handled by a person rather than
by automatic systems. At an average cost of $5 per phone call
as opposed to less than $1 per automated call or mere pennies
for finding an answer online, that is expensive.
Studies by IDC, as well as organizations such
as the Working Council of CIOs, AIIM, the Ford Motor Company and
Reuters have found that:
Knowledge workers spend from 15% to 35% of
their time searching for information.
Searchers are successful in finding what they
seek 50% of the time or less, according to both Web search engines
and our own surveys. An IDC study in 2001 ("Quantifying Enterprise
Search," IDC, May 2002) found that only 21% of respondents
said they found the information they needed 85% to100% of the
time.
40% of corporate users reported that they can
not find the information they need to do their jobs on their intranets.
How much time is spent reworking or recreating
information because it has not been located?
Recent research on knowledge work shows that
knowledge workers spend more time recreating existing information
than they do turning out information that does not already exist.
Some studies suggest that 90% of the time that knowledge workers
spend in creating new reports or other products is spent in recreating
information that already exists. In 1999, a European study by IDC
examined that phenomenon, called the "knowledge work deficit,"
and concluded that the cost of intellectual rework, substandard
performance and inability to find knowledge resources was $5,000
per worker per year.
Using those studies as a basis, we set out to
quantify the impact that not finding information might have on a
typical enterprise of a thousand knowledge workers who earned an
average salary plus benefits of $80,000 a year. We looked at:
- how much time typical knowledge workers spend searching every
week
- what their success is in finding the information they are seeking
- how much time they have to spend recreating work that exists
already but that they couldn’t find
- what the opportunity cost to the organization is
- the cost of lost revenues from e-commerce if customers can’t
find the products they want to buy
- increased call center and online technical support costs because
calls are escalated to a person rather than being answered automatically
Here's what we found:
- The time spent looking for and not finding information costs
our mythical organization a total of $6 million a year. That doesn't
include opportunity costs or the costs of reworking information
that exists but can't be located.
- The cost of reworking information because it hasn't been found
costs that organization a further $12 million a year (15% of time
spent in duplicating existing information).
- Not locating and retrieving information has an opportunity
cost of more than $15 million annually. Accelerating the introduction
of a blockbuster drug or delaying its demotion to generic status
by just one day through use of information access software could
mean $8.5 million or more each day.
- Increased e-commerce revenue pays for the improved search software
in a couple of months.
- Companies like Charles Schwab, Lands' End, Staples or Macy's
have increased their commerce revenue by amounts like $125,000
per month, or 400% in average deal size.
- Call center costs and volumes have been decreased by 30% and
more when better search and browsing tools were implemented.
What we can’t do is measure the increase in creativity and
original thinking that might be unleashed if knowledge workers had
more time to think and were not frustrated with floundering around
online. More information on how we calculated these costs, as well
as additional data on e-commerce can be found in "The High
Cost of Not Finding Information," IDC, June 2003.
Information disasters are caused not by lack of information, but
rather by not connecting the right information to the right people
at the right time. People use information within the context of
what they are doing. They need to have access to the right information,
but only when they need it. And they need to be assured that the
access is guaranteed, easy, fast and reliable.
The quest for information systems that deliver the right information--and
only the right information--at the right time to the right people
is by no means over. But companies like iPhrase, Inxightk, InQuira,
Mindfabric, Siderean, Endeca, ClearForest, Verity, Autonomy, FAST,
or Convera have made great strides in developing the next generation
of search and other more advanced finding tools. Organizations cannot
afford to ignore the technologies that are available today. The
cost of not finding information is simply too high.
Finding information
What do knowledge workers need in order to
interact with information efficiently?
The first thing knowledge workers need is easy access to information
through a single interface. One search should get them all the information
in a company, no matter where it resides or what format it is in.
And that is not so easy. Think about what is and is not easily available
on your own intranets:
- Can salespeople search your training materials that are in
PowerPoint presentations, video and audio clips?
- How does a marketing person find out what graphics have been
used and approved in the past five years?
- Most importantly, how do people in your organization find out
who is working on what topic anywhere in the world and what they
have written about it?
- Can they get at e-mail exchanges that may form the basis for
a decision, or at the log of an online discussion for which no
one took notes?
Knowledge workers also need to understand what
information is accessible so that they will know where the gaps
are. They need to know how to retrieve it. And they need to know
whom to ask for more information or for help.
We need to embed both people and information
within a system that fits how people in the organization work, that
understands the workflow and when the needs for information arise.
People need to use information within the context of their jobs
and their environment. It's not just the information that is vital
to the organization. It's the exchange of information, the information
within the context of the people and the situation of the moment
that needs to be recorded and tracked so that when people disappear,
the reasons why decisions are made remain behind.
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