Information as a Competitive Advantage - Part 1

Information as a Competitive Advantage - Part 1

Introduction In the information age, the optimal management and use of business information, is a primary business competitiveness, if not survival, factor.Information management is an activity which is led by the business goals and is shaped according to the maturity and culture of each Organisation vis-a-vis information management infrastructures. It aims to identify better ways to support business processes, like info-driven direct marketing (shift from product-driven to customer-driven activities). The continuously growing volume of information which is available or accessible by the modern business, leads to an increasing need for effective information management. Information becomes a competitive advantage, only if it can be used to support actionable decisions. Business value derived from information How business information is used, is a differentiation factor between Organisations. The ability to efficiently use information, is a factor which contributes to the development of competitive advantage. According to popular analysis, information can be used for the development of business value in the following four dimensions:

Risk mitigation

Operations cost reduction

Creation of added value

Innovation

Risk mitigation The oldest use of structured information aimed at risk reduction. Business operations like accounting and auditing use structured data to reduce risks like fraud, mistakes or lack of resources. The information needed to comply with rules and regulations, also falls within this category. A substantial part of modern information management structures, is formed based on the controls that must be carried out to mitigate risk related to market, operational and financial risk. The importance of the efficient use of this type of information, is frequently acknowledged through disastrous events. An international trend to develop stronger risk mitigation mechanisms in a globalised economy, via more systematic structure and analysis of information, is currently witnessed. The international application of guidelines like the Sarbanes-Oxley (SOX) act and Basel II in the banking sector, are clear signs of this trend.

Operations cost reduction It involves the systematic gathering and analysis of information which supports the reduction of operations and production cost. For example, it involves the capture of data related to the analysis of the cost structure of a product, the determination of standard costs for each activity and the identification of variances in the actual costs. Moreover, it involves the fact-driven elimination of useless process steps or the optimization of suboptimal processes (e.g. elimination of print communication) in order to achieve higher productivity.

Creation of Customer value Information on the preferences and special needs of the Customer, which when analysed leads to the procurement of increased value. The marketing shift from the focus on supply to the focus on demand, led the need for increased knowledge on the customer and fast adoption to his/her needs. This knowledge is developed through each interaction with the customer on each channel. Knowledge is built based on demand details, preferences on product features, complaints, special needs. Capture of this information on all interaction points (customer touch points) and consolidated management for value creation, is the trend.

Innovation Innovation based on information and knowledge creation, is an important competitiveness factor in the 21st century.Enhanced information management has increased the frequency of production and reduced the time-to-market innovatory products and services. Copyright 2006 - Kostis Panayotakis

Kostis Panayotakis - [http://www.pleroforea.com]

Material relevant to information management, can be found at [http://www.pleroforea.com]

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_(By Kostis Panayotakis).