Information Management Essay, Research Paper
Information Management 1CourseworkQuestion 2 Information Management is the structured organisation of predifined data John Wiley & Sons, NY., 1997 Information refers to data that has meaning Dr. A Taylor & S Farrell, IM in Business Organisations, 1998. Introduction Information is the new corporate competitive weapon. Organisations must utilise information and exploit it at every opportunity if they want to be successful and survive in todays global market place. To achieve this firms must foster an information culture that encourages its people to read, think and coordinate information through teams: Information is power and should be considered a value added resourse. This becomes more important as firms globalize and face more competition. A resource is a value-added entity which can transform a raw material into a commodity. For example, cloth into clothes, components into computers. In this sense, it can be seen that information can now be regarded as a resource. In this essay I will discuss how information is used as a resource by organisations and how it is managed and mapped, showing the various techniques which a company can use in gathering and assessing information to help in their competitive strategy. I will also look at three case studies to show how these organisations have used information as an entity to turn their materials into a commodity. Information Traditionally information was not seen by organizations as a resource; land, labour, and capital were the only resources considered as a value adding. However, one only has to look at the phenomenal success stories of resource poor nations such as Japan, Singapore, Thailand and Korea to see that land, labour, and the capital are not the only prerequisites for success. These countries have had only brains and muscle power to run their economies and therefore have had to do a much better job of utilising and exploiting information. Porter (1990), for example, argues that a nations or an organisation s competetiveness depends on its capicity to use and exploit innovative technologies. A computer can t create it yet information is the single most important resourse a company can have, worth a lot more than land, labour, and capital. At the basic level information is data that has been processed in such a way as to be of some meaning to the person who receives it. Figure 1. The transformation process. Data Information Information can be used in a variety of ways to provide companies with a competitive advantage over their rivals: It can provide organisations with the buying patterns of consumers, allowing them to gear their sales towards this, or provide them with the information concerning the entry level to markets that they do not yet compete in. Any information that gives an organisation an advantage over its rivals is essential. Often managers fail to realise that the key ingredient to success is how they manage information. The right information at the right time can mean success or failure. Information management provides competitive advantage. Information can only be used as a weapon to give an advantage if it is correctly and effectively linked into the organisation. It is important that the individuals that require it receive the correct information. William Synnott (1987) describes information as a weapon. His Information Weapon Model categorises areas in an organisation where Information Technology may be used to establish competitive advantage. These areas are: · Information· Innovation· Productivity Information Planning Anthony (1965) provided the first framework model for the planning and control of information flow. This theory gives a structure for the analysis and design of systems, see fig2. From this it can be seen that the Top level management need information specific to aid the strategic planning of the organisation to help the organisation to maintain a level of standard that keeps them in competition with their rivals. The management control level will ensure the resources are used properly as stated in the decision made by the top-level management. The operational control keep the day to day running of the company going smoothly. The correct information has to be made available at these levels for the organisation to compete successfully in the market place. Figure 2 Framework for Planning & Control Strategic Executive planning management Management Functional control management Operation Operating Control management It can be seen then that as long as information is managed correctly it can be a very strategic weapon. Anthony s framework have been incorporated into the development of Management Information Systems (MISs). However, this information must be obtained in the first place in order for it to be useful. This is done by information mapping. Information Mapping Information mapping makes this possible through using a series of techniques (entity, asset, flow) which can distinguish between critical information resources and those of marginal value. These Information Resource Entities (IREs) and their positioning within a Corporate Information Map (CIM) highlights where these information resources lie within the organisation. i.e. where they come from, which add value, which is critical or marginal. The use of information maps allows an organisation to see where the real value lies in vertical and horizontal information flow. An organisation can use information maps to match its IREs with stated business objectives and this can lead to improved information sharing at all levels within the organisation. Another technique an organisation can use is Cronin and Davenport s Asset matrix. This is a more up to date and accurate method to use. This matrix allows management to view its information assets by how they fit into the organisation.
Case Studies Pizza Hut In Californian, pizza hut has begun an ambitious programme to revolutionise its distribution system and marketing strategies. As an experiment, it has opened a number of Pizza factories at strategic locations throughout its trading area. These factories do not have retail facilities; they merely receive orders transmitted by computer from a central location. Once and customers telephone order is it received, it is entered into the central computer that then dispatches it to a computer at the pizza factory nearest the customer. Along with the order, the pizza factory might even receive directions for the most direct route to the customer s location. Although this represents a routine application of existing computer technology, what makes it important are the marketing implications of the transactions data processed by the computer. In the past, these data a would not have been retained; however, Pizza Hut intends to use these data as input to a system that will allow them to detect trends patterns in customer buying habits. The implications for purchasing, inventory management, pricing, and marketing are significant, and Pizza hut stands to gain competitive advantage through better inventory and improved customer service. Federal Express Formed on the 12th March 1973, delivering only 11 parcels on its first night federal express didn t show a profit until 1975. It showed a $8 billion revenue in 1994! For a company that started on the 12th of March in 1973, delivering only 11 Federal Express. This can be mainly attributed to the unparalleled overnight time sensitive delivery system and its level of customer information. All this is highly dependent on information. Delivery is the service, but information is the key added-value to this process . Federal Express believe that the information technology is so crucial to the companies service that Fred Smith, CEO and founder of Federal Express, describes Dennis Jones, chief information officer, who set the direction of the company. There are two systems in use by Federal Express, that they believe gives them their unrivalled advantage. The first is the state of the art Hub and Spoke system that automatically handles the delivery of packages and documents. This system has allowed Federal Express to increase the efficiency of their delivery system. It relies on information about the packages and the methods of transport available and then makes informed decisions about the delivery of the packages, keeping the running costs down to a minimum and the delivery and giving them a reliable overnight delivery service. The other area in which Federal Express excels in is their customer service. At any time a Federal Express customer can find out information relating to their package finding out exactly where it is at any present time and if it has been delivered who signed for it and when. This system give Federal Express an excellent customer service reputation making them an attractive company to use. Their latest development is a service called Powership that allows customers to find out the information concerning their package from their own desktop PC by using the Internet without having to contact a Federal Express office. These systems employed by Federal Express handle and use information so effectively that UPS have created their own system which works along the same lines as the Federal Express one, at a cost of around $1.4 billion. They believed this to be the only way to compete at the same level as Federal Express. American Airlines American Airlines SABRE system is another good example. They had the foresight to develop a system which didn t begin to show a profit for a number of years but now has over 11,000 installations world-wide. Alighning business and technology gave them a competitive business advantage over their rivals and shows how information can be used strategically. It was a success for a number of reasons. Consumers received a faster one-stop shopping for flights and other travel accommodations. It extended services and improved productivity of travel agents. This resulted in cost reduction of airline administrative expenses and provided an ability to deal with volume increases that would have been difficult to handle any other way. It also provided a marketing vehicle that was to prove significant over time. Being the first to the market, as American Airlines were, means they dominate that market (for the time being!). Conclusion Once the true value of information as a resourse is fully recognised, measures will be taken by organisations to hold on to it and incorporate it into their business strategy. However, at the moment only a few forward looking organisations have realised the full potential of an information strategy. It is these organisations which we will see prosper over the coming years they will be the big players in the global market of tomorrow. Those organisations which have still to recognise information as a resourse had better do so soon, or they not survive the competition from their rivals. The only sustainable advantage that an organisation has is what its people know and what they do with what they know. Information knowledge needs to be integrtatred into the business strategy of the organisation. The advent of the world wide web and the advancement in global communication networks has changed the way in which businesses must operate for ever. Bibliography Synnot, W.R. The Information Weapon: Winning Customers and Markets with Technology, Wiley, New York, 1987. Taylor, A & S. Farrell, Information Management in Business Organisations. 1998