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IMS5023 : Information Enterprise Management and Marketing

Week 6





This week in class we continue to explore the four themes focusing on information enterprise as it relates to categories of information that we derived from the Information Communities model introduced in Week 1, ie:
  • Information for awareness (non-profit);
  • Information for awareness (for-profit/ commercial);
  • Information for accountability; and
  • Information for pleasure.

Keep in mind that these categories represent a spectrum. There are no sharp cut-offs between the categories, and 'pure' examples of particular categories may be difficult to find in real life. The technical term in sociology to describe such a spectrum of concepts is a typology. The typology is intended as an explanatory or analytical tool. These categories may be called an information spectrum or typology and the concept of a spectrum is particularly useful here because it emphasises how the ideas (ideal types) in such a schema shade into each other.

Information for awareness - 'Communication to maximise opportunity'

This week we are concerned with the middle area of the spectrum - Information for Awareness. This consists of what we have traditionally regarded as the knowledge base of society - the area served by educational and research organisations, by publishers, broadcasters and libraries. A great deal of the content on VICNET goes beyond accountability information into 'awareness' information, provided by all kinds of groups, from the Camberwell Multiple Births Association (CAMBA) to the Einstein A Go Go, homepage of Radio 3RRR's Science Show. The Museum of Victoria's Waypoint 1 is a multimedia project which exemplifies awareness information, and the articulation between awareness information and education. In the corporate context, awareness includes management information scanning the internal and external environment to discern opportunities and threats (eg through quality management reporting and market research: try searching the Roy Morgan press releases database for, say, dishwashing liquid). In all types of organisations awareness information also includes the development of Intranets (to support internal corporate communication and collaborative action), Extranets (to share private information between organisations and selected clients), and appropriate Internet communication. Intranets, Extranets, and Internet can, of course, also support accountability communication.

The 'Non-Profit' versus the 'For-Profit' Enterprise

People are often puzzled by the distinction between for-profit and non-profit enterprises. In our discussion of information enterprise (IE) and the pricing of information products and services, we studied value chain theory which - among other things - demonstrated that for any value-added output there must be inputs, and these input have value, even if no price is attached to them.

For any information enterprise, whether non-profit or for-profit, to be sustainable, the minimum condition is that the added value principle must apply:

Value of outputs > cost of inputs + processing

where > means 'greater than'.

The difference between non-profit and for-profit IEs is that in the case of non-profit IEs the 'greater than' can be very small, whereas in the case of for-profit IEs the 'greater than' must be a margin that allows a dividend to be distributed to owners or shareholders.

INFORMIT Electronic Publishing began as a non-profit IE to serve the educational and research community (see Schauder 1995) but evolved into a for-profit publishing enterprise - as a division of RMIT Publishing - serving the same information community.

Note that RMIT Training Pty Ltd - the parent organisation of RMIT Publishing - describes itself as a 'commercial arm'. The use of the term 'commercial' obscures the for-profit/non-profit distinction. Arguably any organisation must operate along commercial lines in order to survive. The distinction between a 'commercially' run enterprise and a non-commercial enterprise possibly lies in the extent to which the record-keeping and accounting procedures required of private ('Pty') or public (stock-exchange listed) companies are observed. For a voluntary group that receives a government grant to conduct a limited-term community project (eg a clean-up of the local creek), perhaps all that will be required is an income and expenditure statement (backed up by receipts etc.) demonstrating that the money has been expended in conformity with the conditions of the grant.

However in order for a continuing enterprise to know, and to demonstrate, that it is not going broke, full balance-sheet accounting is needed. In a given time period your income may have exceeded your expenditure, but you may be ignoring accumulating deterioration of your buildings or obsolescence of your equipment if you do not factor in depreciation. You may think you are breaking even or showing a profit when in fact you are facing a loss, eventually resulting in insolvency.

For all enterprises, not least IEs, another important financial report required is cashflow. Whether or not an enterprise describes itself as 'commercial', it is necessary to track and foresee whether in a given time period the amount of money needed to meet the expenses of that period will be available. Even if an enterprise is not in trouble in overall balance-sheet terms, it can get into serious operational and legal difficulties if it has cashflow problems. The late media magnate, Sir Frank Packer (father of Kerry Packer) considered the cashflow statement as the most crucial financial report.

Typical non-profit IEs

Public broadcasters

Excellent examples are the Australia's ABC and SBS, and the UK's BBC.  They function as non-profit IEs both through their broadcast and website services.


A major category of non-profit IEs are libraries and other tax-supported information services. These are put in place to provide a given community with at least the base-line information resources that it requires, normally without charge. Sometimes the same agencies provide additional services on a for-payment basis (eg libraries charge for photocopying).

The general mode of operation for public libraries is, individually or collectively, to make their case to funding authorities for appropriate capital (eg for buildings) and operating budgets, then to expend these as cost-effectively as possible. They are not expected to make a profit or yield a dividend for the funding authorities that invest in them, but they are most definitely expected to demonstrate that the have succeeded in adding value for their stakeholders. They need to optimise user satisfaction, and their operation needs to reflect well politically on the funding authorities. For instance, in an election year particularly it helps if people are feeling satisfied with their public libraries, and express this satisfaction through the way they vote in local council and State parliamentary elections. It is also important to demonstrate that they have operated efficiently, without wasting taxpayers' money.

The major library categories are:

Public libraries. These provide for the recreational and awareness information needs for local communities. In Victoria, public libraries are funded by Local Governments supplemented by a State Government grant. For particular purposes (eg the Networking the Nation program, made possible by the sale of Telstra) some Commonwealth Government funding may flow to public libraries. Examine the websites of Victorian public libraries, noting particularly a) their aims and b) what they provide free, and what they charge for.

National and State Libraries. These libraries focus on building the collective memory of the States and the nation, through collection and preservation of documents of lasting cultural value. They also serve a range of information needs that cannot be cost-effectively addressed to the local library level (eg provision of state-wide support services such as VICNET, or specialised reference works). Examine the relevant websites for more insight e.g. Victoria's Virtual Library site on VICNET.

The other major categories are Academic and Special (or specialist) libraries. See the relevant VICNET and National Library of Australia pages to allow you to explore thoroughly the range of libraries that operate as non-profit IEs. Monash University Library is one of the best examples of a networked academic library.

In this context it is interesting to look at the current projects being undertaken by one of the World's most prominent IE's, Google, and its relationship to the library world. Google, of course, has numerous projects underway, aimed at increasing both the range of information it provides and the markets it serves. Three are of particular interest in any discussion on the future of libraries: Google Scholar, Project Ocean and WorldCat. These projects have a significant potential to impact on the way libraries are used and their ultimate role. They raise many questions - see the report in Information Today on April 11 for an introduction to some of the issues. You should try to find other reports in the literature and consider what impact you think that these developments will have.

Government departments and statutory organisations

Such services may be sponsored by local, state or national governments. An excellent example of a local government-sponsored IE is iTEL - formerly Global Info-Links 'GIL' - an ISP and information service developed by the City of Ipswich Council in Queensland.

Other government-sponsored information services - accessible without charge - are offered by virtually every state and Commonwealth government department. Increasingly these are incorporating e-commerce style transactional capabilities, some of which relate to aspects of government service which are for-profit (eg the Australian Securities Commission document service and Australian Bureau of Statistics fall into this 'grey' area).

A very important issue is the extent to which any government department can now stand aloof from being an information provider via the Internet. Both the Australian (see - AGIMO - Australian Government Information Office) and the UK experience http://www.open.gov.uk/ suggests that they cannot, and the requirements of a web presence for presentation of information and on-line transactions implies significant business process re-engineering within almost every aspect of government. Much has been written on this theme and current thinking suggests that business process re-engineering alone will not lead to the required transformation, but that a more concerted effort to genuinely engage citizens will be required. For a more complete exploration of the issues, read the Accenture Report Governments Closing Gap Between Political Rhetoric and eGovernment Reality (Be warned, though, the full report is a 3MB pdf file.)

Community associations

Community or non-profit organisations that provide online services contribute to community well-being in many ways. They provide a wealth of information that official services do not or cannot, often re-working pre-existing information in ways more targeted to their specific audiences. For example, ReachOut! a service aimed at reducing youth suicide rates, contains a lot of information about mental health, eating disorders, drug and alcohol, etc, that has been specifically rewritten for its young audience. It also includes information written by that audience and tries to involve young people in projects so that it can more effectively engage with them.

Just as it is with government services, the need to engage people is an increasingly important theme in the development of non-profit services and transcends the mere provision of information, recognising that people must be valued and be able to contribute if they are to use these services to impact on their own lives. This has been recognised by the Commonwealth Government in a recent discussion paper it currently has open for comment, The role of ICT in building communities and social capital, available from the Information Economy Division of DCITA. That paper is supplemented by a series of case studies. (Social capital has many definitions but is taken here to mean that attributed to it by the Productivity Commission: 'high levels of trust and social engagement [that] can generate wide ranging benefits, such as reduced need for personal security and policing, improved workplace efficiency and lower costs of doing business.)

Week 7 Activity 6

VICNET is replete with examples of community-based, largely self-organising non-profit IEs. The example chosen for your detailed consideration this week is AUSTPREM a support group for parents of premature babies.

Explore the AUSTPREM website. Think about the Robbins, Bergman and Stagg POLCA model (in Robbins, S.P., Bergman, R., and Stagg, I (1997) Management, Sydney: Prentice-Hall). Choose two of the POLCA management functions of Planning, Organising, Leading or Controlling. From the evidence available to you on the AUSTPREM website, how does AUSTPREM carry out this function? Make notes and bring them to the tutorial. Please note that you should be able to answer this question without signing up to the forum hosted on this site.


Tom Denison