Business

Information Management for Small & Medium Enterprises

This paper is a reflective report on Information Management for SME’s and discusses compilation, assimilation, interpretation and comprehension of data and its role in running an SME. It proposes that effective business management is difficult without appreciation for the critical role of data sourcing and analysis and demonstrates that knowledge is a critical tool and asset to an SME. It further argues that KM systems are as reliant on human resources as human resources are on KM systems. This proposition gives rise to the need for the implementation of competent KM systems, working in unison with employees to make better decisions based on accurate information. The importance of an information strategy is critical to an organisation and key to sustaining a competitive advantage. The Network Economy is forcing businesses into facing new challenges in improving profits and minimising costs. Difficult decisions involve engaging in problem-solving and demanding inter-personnel involvement which empowers implementation of solution processes. A case study of Browsers Bookstore is offered as an example of an SME accumulating data but not maximising it’s potential. The paper concludes by proffering a number of key strategies to SME’s, such as Browsers, on how to implement and supervise information management systems.

From the outset of this course its objectives were perfectly clear albeit somewhat intimidating for one unversed in information management. The promise of more than a basic understanding of orthodox data sourcing, processing and interpretation practices in a limited time at best seemed optimistic and at worst beyond possibility but by the completion of the course the mission was not only successfully accomplished but further instilled a new enthusiasm, confidence and appreciation for any future endeavors requiring the compilation, assimilation, interpretation and comprehension of data and its very necessary role in the successful day to day running of any business.

By gaining a deeper understanding of technical information and its indispensable role not only in management decision making but also in gaining competitive advantage or adopting new business strategies, planning and solution formulation, it is now perfectly clear that effective business management is practically impossible without appreciation for the critical role of data. Comprehending the contribution of information in successful management and having an understanding of the key concepts and processes in the accumulation, presentation and conception of data assists in evaluation of risk and uncertainties in any business situation. Effective administration can be problematic without skills in data management.

Effective management is further enhanced not only by an ability to critically source and analyse data and information but also to assess its relevance and legitimacy in the context of problem solving. Essential to this is to have an understanding of how data is stored, accessed and applied in an effective and efficient manner. This module clearly demonstrated through theory and practice the reasoning behind the application of numerous concepts which equips and advances the capabilities of the student in operational and theoretical knowledge and furthermore augments other acquired skills deemed necessary to effectively succeed in the business management environment.

The module was delivered in a constantly enjoyable, informative and non-intimidatory manner and extended theoretical and practical elements that seamlessly combined to not only enrich the learning experience but simplify the skillfully presented material. This material was constantly engaging and open communication was encouraged and the teachers enthusiasm for the subject matter manifested itself by answering questions in a perfectly understandable and interesting way. Absolute respect for all opinions and ideas, questions and suggestions immediately removed any sense of anxiety felt for failure to understand and the sense of community encouraged in the classroom was integral to the learning process.

In the business world an unquestionable source of competitive advantage is relevant, timely and applied knowledge enablers (Hussain, et al., 2004). Many organisations are beginning to appreciate how important it is to understand the knowledge they have accumulated and how to maximise benefits of this information. Success in business endeavour is best defined in terms of the value, amount and management of knowledge and how it is accessed and applied especially in the information age. The extent of the wealth of wisdom is immeasurable but wisdom is powerless without appropriate application and this cannot occur in the absence of capacity.

As the international marketplace becomes more competitive with online and offline trading and as it expands from local to global markets the necessity for effective information management is critical. The globalisation of business and the growth of communications technologies are creating new demands for professional enablers. Data has become a tangible asset that can be, used properly, the catalyst to success (Choy & Suk, 2005). It can shape the future of the company by understanding its past and can assist to compete in a marketplace where success is never guaranteed. In short, knowledge is an imperative tool when used properly.

This course suggested a number of critical factors to a successful knowledge management implementation strategy. Such effectiveness involves the leverage of core knowledge to build corporate intelligence resulting in innovation, successful and informed decision making processes, business creation and gaining a competitive edge. By understanding the true worth of its knowledge assets any organisation is immediately acting intelligently and informatively in its attempts at securing business success, “In this era of source scarcity, and the need to be more productive and efficient, knowledge management can play a more important role as a source of competitive advantage” (Choy & Suk, 2005).

On reflection from learnings in key areas about information and internal or external knowledge sourcing it is important that knowledge management initiatives should seek to improve inter-personnel communications and draw on existing expertise, experience, advice and opinions as a primary source. Employees can source internal knowledge through documentation, conversation and experience, “Such internal methods are neither inferior nor superior to external systems and, furthermore, group knowledge sourcing promotes a wider range of performance outcomes than other methods” (Gray & Meister, 2006). External sourcing occurs when new knowledge is gathered by means of imitation, learning or training, or new employee acquisition.

The integration of KM systems and human resources is a key factor in the use and application of KM. In companies where KM systems are not operating in such unison the system is flawed, “Computerized information systems are one side of a two-sided coin, the other side being the human organisation where these systems perform. Unless the two are developed in unison the end result is likely to be disruptive and difficult to handle (Galliers & Leidner, 2003). From this we can conclude that KM systems are just as reliant on human resources as human resources are on KM systems.

These observations propose a number of suggestions for entrepreneurs on how to approach information for effective and successful decision making. Business owners must adjust their methods to deal with ever-changing trends in KM and decision making without which it is more difficult to progress in the business world. Improvements in decision making will ensure greater customer satisfaction and resultant prosperity. Therefore, all KM strategies should be custom-made in a way that business goals can be efficiently accomplished (Nowduri, 2010). The implementation of competent KM systems, working in unison with employees, can be critical for the future prosperity of any firm.

Knowledge is simply what is known and it can be built using information and data. Data should not be confused with information because data is always correct while information can be wrong. Data is “symbols”, information is data with “meaning” or processed data to provide answers to who, what, where, when and why questions and knowledge is the application of data and information to answer “how” questions (Ackoff, 1989). From this we can conclude that a comprehension of the distinctive features of information, data and knowledge helps us to better understand how to make better decisions based on accurate information.

Accurate information is a competitive necessity and impacts on all aspects of the company and, with appropriate management and knowledge, successful organisations are those learning and adapting to the networked economy. Information Resource Management (IRM) defines ways in which an organisation can accomplish its business when using different information resources in order to create new strategies (Todorova, 2005). Information impacts on all aspects of an organisation. The business environment is constantly changing and companies can fail through indifference to these facts. The importance of an information strategy is critical to an organisation’s success and key to sustaining a competitive advantage.

The Networked Economy is a new revolution in progress which will offer extraordinary new opportunities for businesses. This new economy, resulting from a convergence of the economies that came before it and catalyzed by a new era of hyper-connectivity, is creating spectacular new opportunities for innovation (MIT Technolgy Review, 2014). The Network Economy therefore relies on information, irrespective of source, but most specifically who owns it, how is it shared and whether it is private or secure. The Network Economy is forcing businesses into facing new challenges in perfecting customer experiences and maximising potential to improve profits and minimise costs.

In business a common approach to decision making is to quantify the complexity of the decision. In uncomplex matters decision making is routine and occurs without much thought. Complex decisions demand more contemplation. The difficulty comes from uncertainty, confusing influential factors, precarious consequences, alternative solutions and personal or interpersonal issues. These and numerous other factors can influence not only decision making processes but also the outcomes. Difficult decisions involve engaging in problem-solving which demands unique skills varying from problem to problem but some core skills are always applicable and are best defined as a more systematic approach to problem solving.

This systematic approach involves consideration of other people, full understanding of the situation, exploration of options or alternatives through brainstorming, feasibility of possible solutions and finally, resolution by implementation on a trial basis. The combining of problem solving and decision making helps make fully informed decisions that prove successful. The approach is more natural than contrived and is one that works with personal or business decisions. It further legislates for the inevitable possibility of other people’s involvement in the implementation process. By involving others in the decision-making/problem-solving process they are empowered in ensuring the implementation and solution processes are successful.

The adoption of a new approach to problem solving/decision making would incorporate a combination of newly acquired personal skills and the critical analysis of well sourced data and information to assess the relevance and legitimacy of the problem and the solution. This better informed strategy would improve upon the formerly outlined systematic approach and enhance the outcome based as new information and knowledge can be garnered from accurate and more reliable tools that will assist the decision making process which, in turn, help the business to reach its goals. Embracing new information technologies assists in strategic business decision making techniques.

One example of this was at Browsers Bookstore, Limerick which needed to boost sales and wanted to introduce a new scheme whereby customers could get a 50% exchange discount on books purchased at the store if returned in good condition and within a certain period of time. This encouraged recurring sales and improved quality and quantity of used book stock. Browsers needed to set up a database to record customer transactions based on the ISBN and other details including customer information. Members of staff co-operated in constructing the Microsoft Works database and consequently had greater knowledge of its usefulness post-implementation.

Having decided what the “important” information was came the task of compiling it. The spreadsheet was useful for organising the relevant information. Once the data had been inputted it then was used for specific purposes. The issue with the Browsers Database was that it was data heavy but never analysed, valued or reviewed as a source of analytical information. In short, the data existed, but beyond the task for which the data was needed, for example, date of purchase, data was never analysed to determine how frequently that customer bought books. The database had a functional rather than analytical purpose.

In hindsight, the functionality of the Browsers Database was adequate for its practical purpose, but the analytical power of the data was wholly misunderstood and accordingly unexploited as a decision making tool. This course delivered a deeper understanding of the importance and relevance of data in the decision making process. The numerous functions and predefined formulas covered such as conditional formatting of data, trend analysis, averages, pivot tables and charts and argument creation are critical elements of data analysis. Correct interpretation of data using these and other tools can not only assist in decision making but also highly influence solutions.

Poor allocation of time is a result of poor decisions which can have penalties in goal achievement. Mistakes take time to rectify and so decision-making is a fundamental part of time management. Good decisions are based on accurate information and understanding what it is revealing. Through scrutiny, using the correct data analysis tools, patterns emerge that help influence any business decision. Timely and accurate data is key to knowing more about the business and comprehending trends and patterns will generate new perspectives. This information will inform decision making and provide a framework to guide future steps based on past experiences.

Many SME’s, such as Browsers Bookstore, are ill-informed of information management systems and their benefits to strengthening competitiveness. SME’s can better manage and track their business by implementation of new systems of data accumulation, comprehension and application. The centralisation of information within an SME, in a safe environment, can integrate accounting, marketing, communication and sales (Twentyman, 2012). Decentralised IT systems have some benefits such as greater departmental control but the benefits of centralisation outweigh this advantage. One advantage of centralisation is that all data can be updated across all departments which, in turn, results in more accurate and immediate information.

Conclusion

In all companies, all sizes, new and old, successful Information Management requires rules and regulations on how data should be sourced, retained, maintained and shared. Such rules or principles are essential to the integrity of both the information and the company and should account for the necessity for fact based decision making, centralisation of information, ethical retention and manipulation of information, data accuracy, data access and accountability. Solid, principled ideologies in relation to Information Management within the firm will lead to excellence at leveraging data for the benefit of all stakeholders by attaining and sustaining better services and financial results.

Strategic and operational decisions founded on data based facts are better informed choices than those without such information and in such situations data becomes a major asset of any SME (Barron, 2006). Integration of information, where all departments have access, renders this asset even more invaluable but also more vulnerable to mismanagement. Centralisation demands ethical and legal obligations. While the aggregation and interpretation of Data creates enormous value for the SME it also allows for open interpretation and exploitation and as such demands the implementation of secure protection against intrusion or incursion on the integrity and quality of the data.

Data quality is dictated by appropriate application. SME’s need access and comprehension of accurate and reliable data but such reliability issues are difficult to achieve. SME’s must focus on pragmatic efforts to ensure data quality and accuracy is persistently monitored, measured and maintained. For example, purging seemingly obsolete data may have unanticipated results at a later date. Appropriate retention of detailed data allows for other interpretations to be made in the future. Therefore, cost-efficient systems of data storage such as the Cloud has many advantages for SME’s (Alley Watch, 2013). Thus, appropriate enterprise access to data can be economically preserved.

Data should be securely classified according to the principles of the SME. These principles should determine who has access to which data. To maintain this security all data should have an overseer within each department answerable to a chief custodian who not only ensures data protection and integrity but also monitors, “the fundamental rights and freedoms of data subjects” (Data Protection Act, 1988). Furthermore, the continuous monitoring of the enshrined principles for data management of the SME to ensure full implementation will guarantee greater opportunities for benefiting the company in terms of both competence and, importantly for SME’s, commercial rewards.

This paper discussed IM for SME’s and how to accomplish effective compilation, assimilation, interpretation and comprehension of data. It suggested that effective business management is challenging without appreciation for the role of data and demonstrated knowledge is a tool and asset to SME’s. KM systems are reliant on human resources and implementation of competent KM systems working with employees is imperative to sustaining a competitive advantage. The Network Economy is forcing businesses into facing new challenges in improving profits and minimising costs. The implementation of the proposed key strategies by SME’s will help create an enriching future for any company.

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