Institutionalization of Information Management into a Corporate Strategy, Pt. 2

After determining the value of the information function and how to use the IT in your company more factors have to be considered.

This article focuses on the next steps of the analysis, i.e. analysis of the competition situation, analysis of the information infrastructure and the environmental analysis:

Institutionalization pt. 2

Analysis of the competition situation
Although it sounds like analyzing only the competitors it is an important step to check your own performance and set up your goals:
This step – divided into more substeps by itself – of the process will fill your project with life – determining critical success factors.
It is important to determine these critical success factors so you know how to implement IT and new systems, specified on your and market needs, e.g. costs of projects, service quality, product quality etc.
The survey of the present state or current condition aims to measure your specific performance and to compare your performance with your competitors (benchmarking).
The analysis of the present state helps you to estimate how and how much your current condition can influence your particular critical success factors.
Now you’ve analyzed your current performance and the market situation, set up your critical success factors. This work has been done for a reason: you want to change things, want to improve your business, implement a new software system, gain more customers etc. – you have to define your target state. Where am I, where do I want to go and how can I reach it?
The method of the critical success factors helps you achieving your goals. The third part of this article will present this method more detailed with an example.

Analysis of the information infrastructure
The purpose of this step is the evaluation of your current success potential of the information infrastructure, i.e. finding the strengths and weaknesses with relation to reaching your corporate objectives.
The following aspects should be observed:

• data system, i.e. architecture, currentness, consistency, quality, security, protection
• system of methods, i.e. architecture, functionality, economical quality, interfaces, security, protection
• resources, i.e. staff, hardware including the system software, application software, project management, budgets
• organization (organizational and operational structure), i.e. tasks, structure, controlling, revision, quality management

Environmental analysis
This analysis evaluates strategic relevant developments in the informatics/computer science market.
These factors should be observed:

• IT-technology, i.e. hardware, programming languages, networks, database systemes, etc.
• methods and tools, i.e. software engineering, CASE tools, etc.
• services, i.e. basic software, outsourcing, consulting services, etc.
• shift, change of processes, i.e. new distribution channels, interfaces to suppliers, etc.

As you can see, there are a lot of steps you have to through and each step contains of more or less extensive substeps that can take a lot of time and need thorough execution. Each of these steps could be explained in detail but then this article would explode in length and I don’t want the readers being flooded with too much information at a time. Please feel free to ask me for more details!

The more prepared and informed you are the bigger your chances are to succeed with your IT!

The third part of the article will explain the method of the critical success factors and the portfolio anaylsis in more detail.

Institutionalization of Information Management into a Corporate Strategy, Pt. 1

It is a fact that IT can improve your business. But you cannot say: “Ok, let’s use IT then!” and hope everything is going to be fine. As the IT can have such an important role in your corporate strategy, you need careful consideration on what you really need, how you should implement it and what other factors can influence your way of proceeding and your decisions you are going to make.

Definition of Information Management
The use of IT and the information need to be managed. The huge amount of data, information, systems and involved resources, such as capital and employees, must be monitored and controlled in order to maintain an effective and efficient IT service. This is done with the so called information management.
Information management aims at providing a company with (after labor and capital) the third factor of production – namely “information” – and to offer it in an adequate manner.
Information management not only consists of the systems, technologies, information and communication but also overall managerial functions.
Therefore it is necessary

• to work out long-term strategic plans regarding the IT-potential and IT-infrastructure,
• to obtain and apply IT-infrastructures.

The strategic situation analysis
The implementation – or insitutionalization – of the information management into a corporate strategy consists of important steps you have to go through before “going online”. If you don’t consider these steps, aspects of IT can backfire, here some examples:

• You might acquire new software systems you don’t need at all – lost time and money
• Your employees can’t use or don’t accept a new system – dissatisfied employees
• A software doesn’t fit in your company and you can’t produce results – your business partners won’t wait for you and are displeased
• etc…

The following posts will discuss the strategic situation analysis in a generic and abstract way, speaking mostly of the procedure itself – of course this analysis has to be planned in detail and conducted to the specified needs of each company. When applied accurately this procedure will help you to minimize risks and to make the best of IT.
The goals of this analysis are:

• to identify the achievement potential – how can the information function contribute to the corporate success?
• to identify the success potential – the capability of the information infrastructure to transform the achievement potential into corporate success

See the image for an overview of the whole procedure. Each element of the analysis will be discussed in detail:

Strategic situation analysis

The strategic role of the information function
The information function is a factor that determines how powerful and effective the use of IT in your company is.
It is important to know how the information function can affect a company and a business. See the following image showing how the IT can impact on core operations (your daily work) and core strategies (your plans for the future):

IT Impact on Core Operations and Strategy

For example: If your information function isn’t so important at the present, but you want to use more IT in the future as a strategic part, you should emphasize the future achievement potential (IT functions as turnaround). If you’re satisfied on how you use the IT at the moment and don’t want to change anything in the future, you should consider the IT as a supporting role in your company – not many or not any efforts are needed to change the running system.

As you can see it is important to be aware how you use the IT at the moment and how you want to use it in the future – you have to be aware how it is able to support you.

The information infrastructure
After evaluating the specific need of IT it is necessary to check how your company is able to make use of IT, i.e. how is the given and planned IT infrastructure able to convert the information function into corporate success?

Furthermore, there are more things to bear in mind: the profitability and the effectiveness of your infrastructure. See the following image depicting the role of the information infrastructure:

Information infrastructure

It is important to find a balance between the profitability and the effectiveness, and this is the main point. If your effectiveness is high but the profitability is low you will lose a lot of money as your systems do the right things but waste too much money. Not to mention low effectiveness and low profitability: you’re doing the wrong things and spend a lot of money on doing that – worst case!
Find the perfect balance between doing the right things and doing the things right!

The next post will discuss the next steps of the analysis, i.e. analysis of the competition situation, analysis of the information infrastructure and the environment analysis:

Institutionalization pt. 2

Don’t be scared of BI, BPM, CRM, ECM, ERP, and SCM!

How more Information Technology (IT) can enable your business

Small and medium-sized enterprises (SMEs) in particular often don’t have the time and resources to filter through the vast amount of IT choices to find what would be necessary and useful for them to enhance their business processes. Additionally, they are mostly not aware of their own IT potential. Eventually some don’t risk interrupting a working business – if it ain’t broke, don’t fix it!

Yet today’s digital age requires companies to deliver faster and faster. Intensifying market pressure stemming from higher competitiveness and customers’ increasing bargaining power brought on by the Internet (which makes instant price comparisons possible) forces companies to take action. Not being informed and sticking to old methods can be deadly, especially in tough economical times such as these.

Investing in IT needs careful consideration and knowledge. Numerous software systems can provide support to deflect critical pressure and at the same time address market demands. Furthermore, many outstanding systems are available under “open source licenses”, i.e. with zero acquisition cost and the usage is free of charge.

From six days to four hours: A case study how to save time and money
The following case study points out how to significantly improve business processes and save resources with the help of the right software:
Before using IT systems, each step of a customer ordering process in a company was performed manually and forwarded to the next processor by (interoffice) mail. The whole process starting from the customer inquiry, the customer evaluation over the stipulation of the contract terms to the proposal preparation and service delivery took about six days on average.
The disadvantages for the customer and the company are clear: The customer had to wait too long for the completion and was not aware of the status of his request due to the non-transparent process. This uncertainty can lead to the result that the customer backs out and looks for an offer from another company – a blown deal for the company.
With the introduction of a proper IT system and the consequent analysis and radical redesign of the complete process, time could be reduced from six days to four hours. Whereas the system assisted well through the process, only one employee as a generalist was needed for the handling of the entire task. Furthermore the amount of processed inquiries went up by the factor of 100 per month on average.

Important IT concepts you should know about
The following listed IT concepts (and their according software systems) can improve your business in different ways:

Definitions of important IT concepts

IT as an enabler also opens up new opportunities to establish completely new business processes and segments generating new income.
Of course each company has its individual needs of IT systems. Every company needs a detailed analysis and roadmap on how to introduce a new IT system most efficiently.
The next post will discuss the institutionalization of the IT into the corporate strategy along with methods on how choosing the most suitable or needed software system for your corporate.

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