» Archive for May, 1997

Information, Please…

Thursday, May 1st, 1997 by Jonathan Spira

Information is all around us, and the management of this information has become as crucial to a business as balancing a checkbook. Information is the newest strategic, corporate asset, making its management all the more critical. As noted in the Annual Review of the Institute for Information Studies, we “now have the ability through technology to store, process and disseminate information on an incomparably vaster scale [than ever before].”

Prior to the 1980s, information and technology existed in two separate worlds. Before the desktop computer enjoyed widespread use, information existed in printed forms. The exchange of information via computers and telephone was still not prevalent; the concept of managing information on an enterprise-wide level was still foreign to many. With the maturation of the computer and telephone industries, however, information is rapidly becoming something quantifiable that can be collected, processed and moved via LANs and over the Internet; it is becoming an integral part of the fabric and strategy of any organization.

It was in the mid-1980s that standard business principles began to herald information as a strategic weapon, yet few organizations have factored future information technologies into long-term plans. The emergence and proliferation of desktop computers was a “happening,” not a planned event, and few businesses realized the value of strategically planning deployment of these machines. Even today, many allow their growth and expansion to grow unfettered, throwing technology at a problem that might not need a technological “fix.” It is a much better alternative for management to ask themselves, before acquiring any new technology, what is the additional return on investment — not what is the return on investment — if we acquire new technology. Such additional returns are derived from increased productivity of both employees and technology, and the gains realized from having more control over information important to your organization.

Organizing information for a specific task or purpose, very often using technology as a tool and a substitute for “paper pushing,” speeds up the decision making process — sometimes by a hundred-fold. This allows employees to spend less time tending to minuscule, non-revenue producing activities and more time concentrating on areas that will produce increased returns. Furthermore, a firm that strategically uses its information can take a proactive, rather than reactive, stance, particularly in competitive situations. It is easy to see how important the collection, maintenance and organization of information can be, because it can be used as a knowledge base in any given instance.

Today, we make decisions based on available information, although it is often incomplete. In an ideal situation, information should lead to knowledge, which may be derived from study, instruction or experience. A complete firm-wide body of knowledge is essential for a firm’s survival; control over your firm’s information is a competitive advantage.

The business world operates on a set of unquestioned, subconscious business assumptions. These theories form the basis of a set of rules, or a paradigm, which helps us organize and classify how we look at the world. As the business world changes, only those companies that react quickly will prosper. This ability to react requires more than considerable flexibility and openness to new ideas. Indeed, it requires a knowledge and understanding of how information moves throughout the enterprise and when adjustments should be made to that flow. It is up to companies to react to and understand this new paradigm. Those who move fast enough will be the ones that prosper in the wake of change.

Paradigms also limit flexibility when considering new and different ideas, making us view them with suspicion and them “difficult” to understand. As a result, we begin encounter informational roadblocks, such as insufficient understanding of the capabilities and limitations of new technologies, and little or no understanding of the relationship between the business operation and its computer support systems. In other words, systems are frequently designed without accounting for the underlying business processes.

Frequently, organizational infrastructures develop into what we refer to as “islands” of information. Each division or group – for instance, sales or marketing – might have complimentary, yet mutually exclusive bodies of information. If an employee is not on the sales “island,” then they have no access to sales information. In other words, marketing does not have any knowledge of the information sales uses to conduct business and vice-versa. We have noted this phenomenon in organizations of all sizes. In larger concerns, entire groups or departments build up a warehouse of information which could be of strategic value outside the group, yet is closed to employees off a particular “island.” The unlimited strategic value, and competitive advantage, of this information is severely constrained due to the lack of access. Such islands are caused by physical limits, such as no connectivity between Local Area Networks; others are caused because of the notion that knowledge is power and information can move one ahead in their career.

Take, for example, XYZ Corp., which is involved in municipal issuances with multiple corporate divisions. Division ‘A’ works closely with many municipal governments in the State of Florida. Division ‘G’ is informationally isolated from Division ‘A’ and G’s members do not know any people in ‘A.’ Division ‘G’ decides, however, that the State of Florida is a strategic new marketing opportunity. Without access to or knowledge of Division ‘A”s information, Division ‘G’ people start from scratch, potentially even “cold calling” those who are already working with XYZ Corp., but with a different Division. In the best of instances, there is a tremendous waste of effort. In the worst case scenario, XYZ is placed in a embarrassing position which makes it look foolish and could potentially cause the company to lose business, especially likely if it’s competitors have recognized the “islands of information” syndrome and acted to counter it.

Frequently, those in charge do not even realize that this is a problem, yet the problem could cost them profits, efficiency, even their jobs. If a company wishes to make the most of its information, they must construct an information infrastructure that will allow it to be shared – even while maintaining security over sensitive data – and used by the organization as a whole. It must be sure any technological solution to accomplish the above is designed with its users, and the organization’s particular and unique operations in mind. Specific processes behind operations must be understood, and management must understand how individual users will react to new technologies and information structures. Applications to utilize and move information must take into account both existing paradigms and an understanding of the present flow of information.

Ignoring the above, leads to the same end effect: an apparent information shortage despite an abundance of information.

Jonathan B. Spira is the CEO and Chief Analyst at Basex.  This article originally appeared in the Basex Online Journal of Industry and Commerce (BOJIC).