Part 2: The Latent Costs

In the last part, we discussed what poor information management looks like in practice and some of the direct, immediate costs. There are two more things that organizations lose due to poor information management, but which are not directly tied to one of those four pillars: cohesion and reputation.

These are not small, immediate, direct costs of poor information management, such as delays in service or correspondence, but the way that relevant individuals react to those immediate costs.

Organizational Cohesion

We have already discussed organizational unity and coordination in the section on information distribution in part one. There, these terms referred to the ability of an organization’s constituents to function together, a question which is concrete, behavioural and operational.

Organizational Cohesion, on the other hand, has less to do with concrete behaviours and more to do with attitudes.

When an organization collects too little valuable information or too much useless information (poor acquisition), it becomes more difficult to organize and secure (making poor custodianship more likely) and, thus, more difficult to distribute properly.

Employees or members who want to do their jobs well will understandably become frustrated if they are not equipped with the information they need to be most effective. Such frustration is often attributed, fairly or unfairly, to other members or departments of the organization, thus building resentment and distrust between members.

Those members who intrinsically believe in the organization itself and want to see it succeed will be alienated and discouraged by what seems like avoidable dysfunction and may even lose their faith in the organization.

Members frustrated by the dysfunction that results from poor information management will either seek success elsewhere or try to reform the organization (if they have the means). Such reform efforts can be the solution to the dysfunction, but this requires that enough members agree that such reform is actually necessary and that there is no irresolvable disagreement between them about what those reforms should look like.

Without agreement about the need for reform, reformers will be pitted against non-reformers, creating more frustration and resentment. Disagreement about how to reform the organization will also create frustration and resentment. Furthermore, even if everyone can agree about the solutions needed, there’s a chance that they will be the wrong solutions, worsening the problems that caused all of this discord in the first place and thus leading to further dissonance.

Of course, these problems are not unfixable, and many stable organizations go through successive periods of stagnation and reform, and the dissonance and then cohesion that results. But it’s clearly better to avoid or minimize these problems as much as possible by maintaining strong and reliable information and document management systems; prevention is better than a cure.


Information management is far from the only thing affecting your organization’s reputation. Still, as a potential source of problems and the means by which you address problems, IM deserves special attention.

As already discussed, poor IM limits the effectiveness of your organization. This immediate cost results in a latent cost on your reputation with partners, clients/customers, and your most motivated employees.

The impact on your business partners and clients/customers is obvious: poor quality service or products won’t go unnoticed and will factor into their future decisions about whether to work with or buy from your organization in the future.

The impact on your most motivated employees doesn’t get as much consideration, however. Most members of an organization are motivated (at least to some extent) by money, career progress, and status. But some personally identify with the organization, making its success and mission their own.

While intrinsically motivated employees are valuable, they are also more likely to be alienated by dysfunction than those motivated primarily by compensation or career status.

An employee who comes to work only for a paycheck is likely to roll their eyes at frustrating dysfunction at work, do the best job they can under the circumstances, and then go home and forget about it at the end of the day.

Employees that want the best for the organization, on the other hand, face a conflict between their identification with it and the dysfunction they perceive. Some will resolve this by trying to reform the organization from within, but only if they believe that they can have an impact. Those who perceive the problems as insurmountable or their own potential impact as too limited to make a difference; these members are likely to stop identifying with the group entirely.

This internal loss of reputation can thus lead to higher turnover and greater difficulty attracting top talent.

Information Management Issues are System-Issues

Every organization has an information management system, even if it’s not deliberate or formalized. Your organization needs to put most pieces of information it acquires through multiple steps and personnel for it to be as useful as possible (e.g. receiving a document online or by mail -> filing it appropriately -> distributing it to those who need it -> eventual destruction).

Problems in one area tend to cascade into others, eventually spreading throughout the system. Delays and mistakes made at any point will accumulate as the information progresses through the processing system, slowing down the organization’s responses and decisions.

This interconnectedness means that small problems which are ignored will gradually develop into larger ones and that these larger problems take a long time to resolve, as they need to be uprooted at every stage in the system.

The result for an organization’s leadership is that these sorts of smaller problems need to be taken seriously and addressed early on; to be recognized for what they are: the start of something bigger.

Digitization makes excellent information management easier.

It can be easy to think of poor information management as merely the result of poor decision-making and negligence by an organization’s leadership, especially in the abstract, and especially when considering another organization and not one’s own.

The unfortunate reality that many organizations eventually face is that information management problems sometimes arise due to factors outside of your control. A limited budget prevents onboarding more staff; honest and unforeseeable mistakes create new problems or worsen existing ones; or unexpected crises arise, such as the COVID-19 pandemic, which challenged every organization in new ways.

No matter how well your organization has handled information throughout its history, the future is unpredictable, and responsible leaders need to take steps to prepare for whatever may come their way.

One way to enhance organizational resiliency is to move to a strong digital information management system. Systems dependent on paper involve longer and more frequent delays, greater space requirements, greater risk of information loss, and greater ongoing costs in paper and printing.

Digital systems are more secure, require far less space to store large amounts of information, and allow you to send and receive files instantly or work on them remotely. All of these features save you resources and give you and your team more options.

If your information management system is dependent on paper, or if your archives are buried in outdated microfilm formats, digitizing these files with Consentia is a great way to increase organizational flexibility. Leverage all the benefits of digital information systems by getting in touch with one of our experts today!