Information Management and Business Needs - Coursework Example

Information Management and Business Needs Name: Instructor: Course: Date: Information Management and Business Needs Today, managing information has become as significant to business organizations as managing financial data has been to the accountants. Information permeates in every aspect of any business organization, including development of products, marketing, allocation of resources, development, and execution of strategy, among others. Despite such importance, many organizations and individuals seem to confuse between information, data, and knowledge. Although these three words are used interchangeably in the business world, they mean different things in the context of management of information. Data refers to sets of non-random symbols or raw information represented in text or any other form. In contrast, information refers to processed data that exists in a form meaningful to the user and confers perceived or actual value in the current or in the future decisions of the user (Jawadekar 2006). On the other hand, knowledge refers to what users can gain from the information. The emergence of an information-based economy has prompted business organizations to invest heavily on equipment for managing information, particularly computer systems and internet as well as other information and communication technologies and systems, in a bid to support needs of their enterprises. Managing information can be thought of as the process by which a business enterprise optimizes the efficiency of organizing, gathering, processing, controlling, distributing, and applying its information to add value to business activities and processes (Choo 2002). Thus, effective management of the information can help firms to support a wide range of business needs, including decision-making process, development and execution of strategies, marketing needs, product development, provision of services, and many others. The current essay explores how management of information sustains various business needs of organizations. Decision Making Process Business organizations have to make decisions regarding various aspects of their operations and activities. The success of the organizations greatly depends on the quality of decisions made by its employees. Due to the nature of the organizations and the environments in which they operate, employees may not be able to make effective decisions without a means to analyze forces or factors acting on the organizations. Making quality decisions require employees to scan and analyze the internal and external environments in order to identify and select the most feasible decision that will help the organizations achieve their core objective of being in business; to maximize use of resources and returns to shareholders. As Oz (2008) argues, managing information becomes handy in such situations to support the need to make quality decisions. Management of information presents the employees with a systematic process in which to carry out the decision-making process (Courtney 2001). It involves planning, collecting, processing, controlling, distributing, and using the information to enhance value of any activity. In support of decision-making, the first two phases enables employees to organize and collect data (mainly facts, beliefs, ideas, and other related data) from within and without the business organizations. They then process the collected data using various decision-making models (for example, statistical methods) in an effort to transform the data into forms meaningful to the organization. In its raw form, information has no meaning or value to decision makers because it exists in unstructured form that limits its applicability. As such, decision makers have to process the raw information to identify possible relationships, separate useful from non-useful data, and present the information in understandable structures or ways. Such organization produces different courses of action that the decision makers can use to solve the problem or issue at hand. In the controlling phase of the management of the information, they analyze the situation and the information to identify and select the best course of action from the various alternatives. However, at this stage, the information is just a form of knowledge to the decision makers. As such, they need to share it with other employees in order to make the decision useful to the business organizations. Sharing the knowledge ensures dissemination of the information among employees and other stakeholders within the organization, allowing them to use the information to make and implement a decision that will enhance the value (in terms of effectiveness, profitability, and other needs) of the organization (Huber 1990). Thus, managing information sustains the desire of business enterprises to make quality decisions about their other needs, including development and marketing of product and services, management of human resources, strategy formulation and implementation, and others. Strategy Formulation and Implementation Managing information plays an instrumental role in supporting the need of organizations to develop and execute various business strategies. A strategy may involve any set of activities or events that a company aims to achieve within a specified period to enhance its value in the market. Management of information improves their ability to design effective and feasible strategies, their capability to implement the strategies, and their ability to make sure that the strategies as well as the implementation process remain coordinated with the environment and one another (McGee, Prusak, & Pyburn 1993). Through the process, companies stand in a position to scan and understand their industries or markets, which in turn assists them to design and implement strategies that exploit the market effectively for betterment of the organizations. In addition, they stand in a position to understand opportunities and threats that may cause success or failure of the strategy. Thus, they are able to develop sustainable strategies that support their operations and processes now and in the future. For instance, Google’s success in the information communication industry hinges greatly on its ability to manage information to support strategy development and implementation. The firm relies heavily on information from the external and internal environments to develop and implement its operational strategy. The firm’s search engine incorporates various features aimed at gathering opinions, facts, and ideas from its consumers. The data is then processed and shared among workgroups within the company, enabling it to support and improve the strategy in respect to changes in the market. As a result, the company has been able to maintain its competitive position in the industry despite stiff competitive from other market players, such as Yahoo. Product Development and Marketing The most important need for any business organization, regardless of industry or size, is to develop and market products or services that will enable it to gain sustainable market share and high returns. However, without sufficient information, the need remains impossible to achieve as the organizations’ products or services may not effectively satisfy the preferences or needs of the consumers (Ditsa 2003). Thus, organizations have to make huge investments in information management in order to enable them to identify products or services that will best meet the needs of the targeted consumers or markets. Employees need to collect, organize, process, share, and use information about demographics, preferences, and needs of targeted consumers, external forces within the targeted market (including government regulations, infrastructure, availability of raw materials, and competitors), and internal factors within the organizations (for example, human and financial resources). Such managing of information supports the need of the organizations not only to develop saleable products, but also to manage the whole supply chain to minimize costs of the product life cycle and at the same time, maximize profits. According to Tallon, Kraemer, and Gurbaxani (2000), through information management, they stand in a position to identify and select product features, materials, and other characteristics that will enhance the ability of the products to meet the needs of the consumers. It also assists them to plan, develop, and implement manufacturing process or service delivery process that fits well to their production capacities and human resource capabilities without the need to incur unwarranted production costs, such as outsourcing of production process and human resources. Moreover, management of the information about the external forces in the market improves the ability of the firms to determine the best way to distribute and market their products or services to consumers. Human Resource Management (HRM) Information management has become an important tool in supporting HRM needs of business organizations (F. Bee & R. Bee 2005). Human resources represent a core element determining the success of any organization. As a result, HR managers play a significant role in ensuring that the organizations have the right kind of personnel as well as developing and implementing structures and policies that ensures productivity, satisfaction, and motivation of the employees. All these activities involve information, implying its management remains a key to success of the organizations. HR managers need to recruit, select, compensate, and train the employees. To accomplish these tasks, they need information to understand and identify the best way to carry out the activities (Teo & King 1997). Through information management, they stand in a position to understand the right skills and competencies needed of the employees and the best recruitment and selection methods to use in order to attract the right people to fill different positions in the organizations. Information about the duties and qualifications assigned to each job responsibility enables the HR managers to identify, develop, and implement the best pay structures for the employees. In addition, training of the workers calls for the need to have information about their current skills and competencies, changes in market environment and business operations, and skills that needs to be taught to the workers. This indicates that information management becomes handy in such situation to improve the work of HR professionals. It helps them to collect and organize the information and later use it to plan, develop, and execute various HR strategies. For example, Starbucks HR system demonstrates how managing information can be used in business enterprises to support HRM needs (Oz 2008, p.97). The company maintains an electronic database supported by employee record management, online selection, and recruitment of personnel, and other HR activities. Performance Management From time to time, business organizations normally need to evaluate their performance to determine whether they are achieving their objectives. The evaluation may entail appraising the overall performance, performance of a specific process or business function, execution of a particular task, productivity of employees, or ability of a particular policy to ensure the required business environment or employee behavior. According to Ball and Douglas (1999), irrespective of type or nature of the evaluation, information plays a significant role in supporting the process. Managing information is required to gather, process, and share opinions, facts, and other types of data regarding the expected status of the concerned activity, its current status, and the variance between the current and expected states (Melville, Kraemer, & Gurbaxani 2004). For example, business organizations evaluate every year their profitability in order to determine the extent to which their business operations meet their financial objectives. To accomplish the reviews, they usually manage financial information of past years and current financial year. They then use the information to perform financial analysis over several years, from which they are able to determine their financial performance by comparing the ratios across different financial years. Conclusion The emergence of an information-based economy has prompted business organizations to invest heavily on equipment for managing information, particularly computer systems, to support needs of their enterprises. Making quality decisions require employees to scan and analyze internal and external environments in order to identify and select the most feasible decision that will help the organizations achieve their core objective of being in business; to maximize use of resources and returns to shareholders. The process helps the organizations scan and understand their industries or markets, which in turn assists them to design and implement strategies that exploit the market effectively for betterment of the organizations. Moreover, it supports the need of the organizations not only to develop saleable products, but also to manage the whole supply chain to minimize costs of the product life cycle and at the same time, maximize profits. It also becomes handy in supporting HRM needs, including recruitment, selection, compensation, training, and retention of personnel. In performance management, managing information is required to review expected status of the concerned activity, its current status, and the variance between the current and expected states. References Ball, MJ & Douglas, JV 1999, Performance improvement through information management: health care’s bridge to success, Springer, Berlin. Bee, F., & Bee, R 2005, Managing information and statistics, 2nd edn, CIPD Publishing, London. Choo, CW 2002, Information management for the intelligent organization: The art of scanning the environment, 3rd edn, Information Today, Inc, Medford, NJ. Courtney, JF 2001, ‘Decision-making and knowledge management in inquiring organizations: toward a new decision-making paradigm for DSS’, Decision Support Systems, vol. 31, no. 1, pp. 17-38. Ditsa, G 2003, Information management: support systems & multimedia technology, Idea Group Inc (IGI), Hershey, PA. Huber, GP 1990, ‘A theory of the effects of advanced information technologies on organizational design, intelligence, and decision making’, The Academy of Management Review, vol. 15, no. 1, pp. 47-71. Jawadekar 2006, Management information systems: texts and cases, Tata McGraw-Hill Education, New Delhi. McGee, JV, Prusak, L, & Pyburn, PJ 1993, Managing information strategically, John Wiley and Sons, Hoboken, NY. Melville, N, Kraemer, K, & Gurbaxani, V 2004, ‘Review: information technology and organizational performance: an integrative model of IT business value’, MIS Quarterly, vol. 28, no. 2, pp.283-322. Oz, E 2008, Management information systems, 6th edn, Cengage Learning, Florence, KY. Talon, PP, Kraemer, KL, & Gurbaxani, V 2000, Executives’ perceptions of the business value of information technology: a process-oriented approach’, Journal of Management Information Systems, vol. 16, no. 4, pp. 145-174. Teo, TS & King, WR 1997, ‘Integration between business planning and information systems planning: an evolutionary-contingency perspective’, Journal of Management Information Systems, vol. 14, no. 1, pp. 185-214. Read More