Information and its use has become the competitive advantage of today’s world. The efficiency with which a firm manages its information determines its success in the marketplace. This enormous power of information unleashed in today’s world has brought down reaction times for decision-making of managers, made customers more aware, competitors more efficient and regulators more alert.
Today, one can no longer hide behind excuses of ‘plausible deniability’. These changes have resulted in a change in mindset of managers and have transformed the way business is conducted. Management of information itself has become a key success factor for firms. However, information is not to be seen in isolation. Information in the current competitive business environment is available to business firms in a computerized environment. Computerization is required to make the information supplied to be timely and accurate, which are critical factors for success in these competitive times.
Hence, the study of information management entails an understanding of information and communication technology also. However, information management is a distinct subject not related (other than the practical considerations of providing the output information timely and accurately) to information and communication technology. Let us now delve deeper into the subject to get a clear understanding of the basic concepts that drive management information systems.
As is clear, the advantage that a modern corporate house enjoys can be traced to its management of information. If the business house cannot manage its information, then it is likely that it will not have any competitive advantage. Typically an organization can develop competitive advantage if it can, does or have what others can’t, do or have. In modern times, the advantages on account of raw materials, technological edge, etc., is being neutralized by the forces of modern business. The last frontier so to say is information management. Companies that have managed to do it successfully like Dell, Google, etc., have generated an unparalleled competitive advantage as their reaction time to changes in the market and/or competition is much less and hence, they can shift business gears faster than their competitors and hence the advantage. Competitive advantage through managing information can accrue to an organization if it:
- Manages information to reduce reaction time for change
- Managing information makes the organization efficient
- Information management leads to insights into the business that the competitors cannot have
- Information management is used for predictive analysis so that the organization is one step ahead of competition.
This competitive advantage gained by managing information also requires changes in organization cultures. Companies need to create a culture of information based management and decision-making to take advantage of the opportunities of information management. This is a challenge, as installing an organizational culture is not as straightforward as installing an information management system. It is a process that takes a lot of time.