How to Measure Anything Workbook: Finding the Value of Intangibles in Business

CHAPTER 14 A Universal Measurement Method: Applied Information Economics

1. B
2. Identify experts; plan workshops; conduct initial research.
3. Decision problem definition; decision model detail; initial calibrated estimates.
4. Value of information analysis; preliminary measurement method designs; measurements methods; updated decision model; final value of information analysis.
5. Completed risk/return analysis; identified metrics procedures; decision optimization; final report and presentation.
6. C
7. A
8. C
9. C
10. B
11. True
12. True
13. False
14. False
15. No, most of the uncertainties about things like state adoption rates of the technology, efficiency improvements, and improved reporting rates turned out to have an information value of 0. Only a few variables had a significant information value.
16. They identified five possible categories of benefits: lower cost per transaction, lower error rates, reusability of code, faster implementations, and improved business intelligence. Since the change in delivery time and cost of projects had a high information value, more in-depth data gathering was done to reduce uncertainty about how standards affect project duration.

For questions 17 to 19, students are encouraged to go into more detail than provided here. Answers should be graded by whether they are detailed enough to actually facilitate modeling of the problem. This could be the basis of a more extensive paper on the topic of choice. Basic examples are provided here only as a seed for further development.

17. Examples: You ...