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The Value Of Information: An Evaluation Model For Enterprise Integration Using Transaction Cost And Information Requirements Analysis


Enterprise information integration has become a given in corporations competing in today’s global market place. Visions such as Virtual Corporations, Enterprise Re-engineering, and Total Quality Management all have their roots in integration technologies, especially, Computer-Integrated Manufacturing and Concurrent Engineering. However, the economical sciences of integration have not caught up with the rapid progress of technology and even clouded the further utilization of technology. Managers often wonder hoe to account for the benefits of integration and how to evaluate one integration plan against another with sufficient objective grounding. Existing results in the field, including the economics of information and the transaction cost theory, do not provide sufficient granularity to address these issues. To solve the problem, a manufacturing information integration theory is employed to expand the previous microeconomic models with new variables and measures which assess the intra-firm transaction costs from data classes, knowledge classes, and information flows, as well as from traditional transaction variables for shops and processes. The conceptual model is presented in this paper, along with a discussion of its implementation in a Computer-Integrated Manufacturing environment.


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