Management is the invisible force that keeps an organization going by continuously performing the tasks of planning, organizing, controlling and leading. Management plans for the goals and objectives of the organization, organizes men, materials, technology, money and other resources to enable the organization to attain the set goals and objectives, controls activities to ensure that everything goes according to plan and that there is no deviation from it and leads the organization to attain greater achievements. Without management, an organization cannot survive. The issue of management is therefore most important for any organization, business or otherwise.

Management in business organizations has traditionally always focused on the four levels of business change and success namely, business strategy, organization structure, business processes and people. However, a fifth level has now been added to the existing four information levels. Information has not only become an additional lever for change and success of a business organization, but has become the most important key asset for it. The reason for the emergence of the importance of information in management is the positive role it plays in improving the quality of decision-making. Information helps the management in conducting its tasks efficiently and helps in decision-making, thereby making it an important asset. Also, unlike any other resource information resource cannot be duplicated by competitors as information is proprietary to an organization and hence competitive advantage gained by leveraging the power of information is very hard to replicate by competitors.

                Management with information ensures a smooth process driven organization climate as all management decisions are based on information and hence (by definition) are based on a proactive decision based approach. This ensures that problems are nipped in the bud and opportunities are taken even when others are unable to spot one. Management with information also ensures that decisions are based on objective criteria and are not ‘gut feeling’ based. This ensures fairness and boosts confidence of employees on the management. Business organizations that manage with information successfully achieve the following:

• Minimization of risks – information helps organizations to continuously monitor and control the following entities:

1. Activities (business activities)
2. Situations (industrial dispute, etc.)
3. Clients
4. Competitors
5. Markets
6. Employees
7. Technology, and
8. Government (new regulations, etc.)

In short, information helps the organization to keep a tab of all likely or potentials areas of risk. Since with information, organizations can monitor the potential risk areas, it results in a shorter lead time for the organization to react to risks thereby helping the organization.

1. Reduction of costs – management with information leads to reduction of costs (by gaining information on wastage and acting to eliminate it) by eliminating wastage and by improving efficiency and performance.
2. Addition of value – information helps organizations to add value to customers by improving the offerings and by taking measures to ensure customer delight.
3. Creation of new ideas and innovation – information and its flow within an organization enhances innovation and helps the organization to see the market reality in a better and more candid manner. Innovation is enhanced by increased information as increased information leads to greater understanding of key developments leading to innovation and new ideas.

Management with information is a continuous process and in many ways is a different philosophical approach towards management. It needs strong leadership and a commitment from top management to become a. successful strategy in the organization, it helps the organization to remain healthy and efficient.

Quality of information is an important concept. Information quality is a multi-attribute concept. If the attributes that define quality of information are of good quality or of high value then the information is said to have good quality. The attributes of quality of information are:

1. Timeliness- The speed at which the information is received. Normally, faster the information better is its quality.
2. Appropriateness- is the suitability matching of the receiver and the information, more the suitability of the information to the receiver, better its quality.
3. Reliability – the reliability of information is a key attribute of quality. Only if the information is reliable is it of any use. The understanding of reliability comes from past experience, the standing/reliability of the source, the methodology adopted to acquire and process the information and the channel of delivery.
4. Accuracy – is the correctness of the information. Normally, the higher the accuracy of the information, the better is its quality.
5. Completeness – is the measure of comprehensiveness. It is required to ensure that the information provided gives the complete picture of reality and not a part of the picture.
6. These attributes define the quality of information. A high score on each of the attributes indicate that the quality of information is good.

Information Overload

Information overload is a condition where there is more information than one can handle. The concept of information overload has been around for over a century but its impact is being felt in today’s times as never before.

Information overload is a huge problem for managers as it affects the quality of their decision-making. A good management information system ensures that information overload is avoided. Information overload leads to both psychological and physiological problems for the receiver and brings down the quality of decision-making. In today’s organization this is a major issue as it has the potential to destroy a lot of the value created by a good information system. System designers should be careful about this issueand should strive to create one version of the truth all across the organization. This helps to reduce information overload.

The value of information is a very slippery concept as information per se does not have any universal value. Its value is related to the person who uses it, when he uses it and for what he uses it. Any assessment of the value of information is therefore related to the value of the decision-making supported by such information.

For example consider two persons lost in the Sahara desert. One person has an adequate supply of drinking water (more than he could desire) and another has exhausted his supply. If one were to approach these two individuals with information about a drinking water well in the surrounding, such information will obviously have greater value for the one who has exhausted his water supply. For the one who is thirsty, this information is the most valuable piece of information for him at that point of time as it will determine if he will survive. If by chance the information reaches this thirsty person late and he dies of thirst, then the value of the same information becomes zero. So we can see that the same information can have different value for different people at different points in time. Hence, it will be fair to conclude that value of information is relative. There is no absolute value of information.

                However, the normal mathematical and economical explanation of value of information suggests that if an event occurs whose expectation was low and information of its occurrence is known then such information is valuable. For example let us say that the reader of this text gets the information that an earthquake of 10.5 magnitude in the Richter scale is going to hit India and the epicenter of the earthquake will be the very spot on which he is located, then that information is more valuable to him than the information (say) that he has to pass his BCA exam to get into the MCA course. In the former case the information is more valuable to him as he is not expecting it but in the latter case he already knows the information with certainty and expects it fully and hence the value for such information is less. All market mechanisms work on this model of information. This has already been dealt with in the earlier chapter and as Eq.1 suggests, the value of information of an event is the negative logarithm of the probability of occurrence of the event. Therefore, the more unlikely the event the more its information value, if communicated correctly. This is also exhibited in our behavior as eons of evolutions have shaped us in a manner that we tend to attach more value to unlikely events. In a game setting for example, say a horse racing game, if the odds of a horse winning the race are more then the payoff for that horse is less. Similarly, if a stock in the stock market is likely to outperform the market then the price payoff for that stock is not high, but if a stock that is likely to underperforms, performs beyond expectation, then the price payoff become very high. Thus, we can that the issue of value of information is a complicated one.

Normative Value of Information

Marschak (1971) and McGuire (1972) made seminal contributions to this field of work. Decision theory has developed this concept further and the basic assumption is that we always have some preliminary information about the occurrence of events that are related to our decisions. This information or knowledge is represented by an a priori assignment of probability of occurrence to the event and hence a calculated payoff. The a priori probability might be objective or subjective as the case may be and with the knowledge of additional information the probabilities are modified resulting in a change in the expected payoffs. This approach is however, only good for theoretical discussions as its practical applicability is poor. The problem for such cases has to be highly structured, which is rarely the case in management.

Subjective Value of Information

It is the subject view of the information available. It is the subjective perception or impression of the information. This subjective value approach varies widely with individuals. In the subjective valuation of information, no probabilities are calculated. Subjective value of information is the person’s (receiver’s) comprehensive impression about the information content.

This issue has been dealt with in each and every MIS text. The reason is that this issue is important from a conceptual standpoint in the study of MIS. The concepts of ‘Data’, ‘Information’ and ‘Knowledge’ are interlinked. In fact, data, information, knowledge and wisdom have been the building blocks of systems thinking and are sometimes referred in literature as DIK hierarchy. Data is raw facts, which is not of much use per se. When this data is processed it becomes information.

A simplistic way of connecting the above concepts is to consider information as the understanding of relations in the data and knowledge as the understanding of patterns in the information.

The management of information is largely the efficient management of data, which are the basic building blocks of information, If the data is not managed properly, information will not be generated, So even though data by itself is meaningless, it is vital for information management Poor data quality leads to a situation commonly known as ‘garbage in, garbage out’, where the information coming out of processing the data is also as meaningless as the data to start with was useless. In fact, the subject of information management largely deals only with the strategies for managing data.

Deriving knowledge from information however, is a more difficult challenge. Information can be stored in specific systems to create organizational memory and organizational learning. The problem with managing knowledge is that it is largely contextual with a strong experiential bias making replication a big problem. Knowledge management is an issue that needs detailed discussion, which we shall revisit later.

Consider the following statements:

1. I have two boxes connected by wires.
2. Box one is moderately heavy and boxes two is lighter.
3. Box one has a glassy front view with 3-4 buttons in front
4. Box two also has 3-4 buttons but no glassy frontal part.
5. You usually find the boxes in a study with smaller gadgets attached to it through wires.
6. Gadget one has a lot of push buttons with alphabetical and numerical characters printed over each button and the other gadget, gadget two fits into a palm and has a roller ball underneath with two buttons on top.
7. When a button of box two is pressed, box one initially shows characters in the frontal glassy part and then lights up like a television.

Can you guess what it is?

Yes it is the description of a personal computer. Somewhere, while reading the statements you could match the pattern of a personal computer’s description with the statements above. When you started reading the statements in a sequence, the statements must have meant nothing at all to you but somewhere you could match the pattern based on your knowledge and then on, the other statements were only a confirmation of your understanding. However, if you would not have seen a computer in your life, you would not have been able to identify the statements as describing a computer. This is what knowledge is. Knowledge helps you to make meaning of the information at your disposal. Each statement is information as each statement is complete and has meaning. However, the value of such information is very low as it does not convey any decision-making .value to you. The fact that there are two boxes and two gadgets attached to the boxes are data which in themselves convey neither information nor knowledge.

Human beings have known information and its relevance to their existence from the beginning of human civilization. Our instincts and intellect have developed and evolved to take advantage of information. However, we have been unconscious about the role it played in human lives till the early twentieth century.

Only in the later part of the twentieth century and specifically in the seventies and eighties has the role of information come into focus. With the success of the US based firms, like Bloomberg, information began to be taken seriously in business organizations. Today information is considered as the most important resource in a business organization. Information is required in business to serve a host of purposes ranging from the most critical, like decision-making, strategizing, planning, to the mundane, like operational control, automation. In some futuristic business organizations, it has assumed the role of a differentiator, giving competitive edge to the organization. Information management has therefore, become a very important task in modern business. Business organizations invest heavily to install modern information management systems. These systems are housed within a computerized environment more popularly called information technology platform. The requirement for technology in information management stems from the dual need for ‘timely’ and ‘accurate’ information in today’s modern business.

Meaning of Information

Information and the understanding of its value lie at the core of management information system. Information is quite distinct from data, even though the two concepts are interrelated. The concept of information as an important resource began to take root from the late eighties. Management practitioners began to deliberate seriously on the issue after the huge success of Bloombergin the eighties Bloomberg started with the modest business of analyzing the financial results of different US companies and providing analyzed data or information about the financial performance of these firms to brokers in the stock market for a price, thus starting the first information business in the information trading business. Different forms of such information based business have evolved since then and today, information is not only regarded as a resource but is considered as the most valuable resource. A resource which if used properly may result in competitive advantage for the firm.

We are instinctively alert for ‘valuable’ information. However, the human brain has evolved to understand that there is different degree of ‘value’ of information (which the brain unconsciously values). The human brain works in a way that it prioritizes information according to its perceived value, most often this unconscious valuation mechanism in our brain is correct, more so in the case of instinct based information. For example, let us assume that a driver notices a child suddenly crossing the road and evaluates that he will hit the child unless he stops and at the same time he feels an itching sensation on his forehead. In this case the brain of the driver prioritizes the two different information that receive from the different sensory inputs, it reacts by sending a signal to the driver’s right foot to press the brake pedal to stop the car and only after the car stops will the brain react to the itch. We unconsciously do this everyday. Evolution has taught us that information has a context and hence different degrees of value. We exhibit the same behavior of prioritization of valuable information in taking business decisions. Sometimes the value of information is evident but in most cases the value has to be mined out. The value that information delivers for business can be of several types. For example, it may be the launch date of a competitor’s product (kept secret by the competitor) or it may be the total sales of the organization made in a particular market segment in a specific time frame. In the former case the information is very straight forward (it is just a few pieces of data) and the difficult part is to get a source for such information (the basic data is very difficult to get and may well be available only through industrial espionage). In the latter case the data is available in abundance and information is created by processing it and the difficult part of the information creation is the processing part not the availability of data, which of course is important as well but not as important as in the former case. The subject of information as used in business organization deals mostly with the latter case, in which the organization’s own data is captured, stored and analyzed to create information for decision-making. Information of the former type is mostly dealt with through industrial espionage.

Information-Mathematically

Mathematically, information may be defined as a function of the probability of occurrence of an event. The information theory literature has been developed by C.E.Shannon, ‘Norbert Wiener and others. To understand information in a mathematical way, let us consider an event E with probability of occurrence p. Information is of greater value if the probability of its occurrence is closer to 0 than 1. For example, if someone were to convey that the Sun will rise in the East tomorrow, then would we consider this message to be ‘valuable’ information? No, as this event (i.e., Sun rising in the East tomorrow) is certain (and hence has very little, almost no information value), but if on the other hand, if someone were to convey the message that in the next five minutes an earthquake would hit with its epicenter at the very spot on which the reader is sitting, then that piece of message would have a much greater information value as the probability of its occurrence is much less (and hence consequently, its information value great). Thus, we can see that the greater the probability of occurrence of an event, the lower its information. This is what Shannon has defined mathematically as,

h (p) = -Iog (p), where 0 < p ≤ 1

h (p) is the measure of the amount of information (also called information function measured in bits).

p is the probability of occurrence of an event.

We can see that h (p) is a decreasing function whose value varies from ∞(when p is 0)

to 0(when p is 1).

The value of information comes down exponentially as p increases. This means that as events start happening on expected lines, information about such events start to diminish in value. When the event is certain with probability of occurrence at one, then its information value becomes zero.

Entropy

Entropy is a concept in physics, which is a measure of the degree of randomness in a system. Shannon (1949) suggested that the concept of entropy in information theory. Entropy in information theory is the mathematical expectation of information of the occurrence of one of the events when a set of events is considered.

Let there be n events E₁, E₂….E_n, with probabilities of occurrences as P₁ P₂….. P_n Where all probabilities are greater than 0 and the sum of all probabilities is one.

Now, Entropy function is defined as,

                                   n                            n

H(p1,p2,…..pn) = – ΣP₁ logp₁;p_{1 ≥0}, Σp₁ = 1

                                  i=1                         i=1

It is clear, that entropy is a measure of expected information. Sometimes entropy is also considered as a measure of uncertainty.

Business and business environment have changed dramatically in the last one and a half decades. The transformation has been nothing short of being radical. Concepts and issues that were centre stage a decade back are now irrelevant and have been replaced by new ones.

A liberalized, globalize and open environment for business and commerce exists today in this new era. New products and services have replaced older ones and competition has become more intense and the churning in the marketplace has resulted in the creation of new market leaders. Customers have become aware and governments have brought in progressive legislations and the pace of international business integration has increased. Globalization has made geographical boundaries meaningless, the Internet revolution has changed the way of life and commerce even the internal functioning of businesses ,have changed with less and less hierarchy, a more open culture, easier and transparent communications, increased expectation of faster delivery and greater focus on corporate governance.

In short, we live now in a completely new order. This new order in which we live is ruled by the power of information. Information and technology that helps in managing information have worked as the catalyst for this change. The change is by no means final. In fact, this process of change is likely to intensify in the years to come.

                Managers who run businesses are always tuned with the market realities so that they can react with minimum time and effort in case any problem or opportunity presents itself. The changes sweeping through the business and economic environment have forced business to look at newer ideas to bank on and thrive. One of the ideas reinvented in the modern business era is the management of information, not just for reactive decision-making but for proactive decision-making to embrace the changes in the marketplace and turn threats into opportunities. However, before we proceed any further, let us take a look at the major trends in modern business environment that have forced management thinkers to take a new look at the management of information.

Increasing Competition

The most important trend in the modern business environment is the increase in competition. Competition has forced businesses to become more efficient and effective. More and more corporate entities are obsessed with the efficient use of its resources to beat competition. Capital is freely flowing to low-cost (but not necessarily low quality) manufacturing and servicing hubs, the world over. Economies of scale have become important along with the productivity of capital and labor. In fact, most of the measures that a business entity takes today are with a focus on competition. The main reasons for this increase in competition are due to:

Globalization and Liberalization

Businesses want to derive value in any location or in any country by leveraging a wage arbitrage opportunity or creative labor force or business-friendly government policies or low cost scale manufacture/service to create value for the shareholders. The world has indeed become flatter in the last few years.

Market Dynamics Favoring the Efficient

The markets have become demand driven. Customers today have greater choice and hence demand for better quality at a lower price, which in turn favors those companies which are efficient in their use of resources as they can deliver a better quality product at a lower price.

The Fast Pace of Recent Technological Change and Innovation

The recent technological changes in information technology, Very Large Scale Integrated Circuit (VLSI) design, and nano technology and biotechnology space have altered many market equations. Disruptive technologies have leveled the playing field and made competition difficult for established companies and easier for start-up firms. Innovation has now become the new tool for gaining long term advantage in the marketplace. Top management now routinely focuses exclusively to bring in innovation in their products and processes.

Increased Information Exchange

It has resulted in a free flow of information about markets, competitors, strategies and alternatives making competition all the more difficult.

Increasing Uncertainty in the Marketplace

The fast pace of technological change and innovation has resulted in uncertainty. Businesses are continuously alert to changes in the market place. Disruptive technologies get developed faster and the life cycle of a product/service gets shorter every year. Gone are the days when a company had a blockbuster product/service that it could sell for years together. Today alternatives get made in shorter time and from the most unexpected competitors and locations of the world. This competition from unknown competitors and from unknown technologies and products creates a sense of uncertainty among businesses. The manner in which business is being conducted is also adding to the uncertainty. Market meltdowns like the recent global financial market meltdown and slowdowns strike markets without any warning which creates a general feeling of uncertainty. This uncertainty has to be met with greater capacity to absorb external shocks in the organization and by reducing the reaction time to changes in the marketplace. Information management becomes a crucial weapon in such environs where uncertainty is a certainty. The value that an organization gets from investments on information management in such situations is immense as the difference between success and failure may be just a small piece of crucial information provided by an efficient information management system.

Increasing Globalization

Globalization is also another important trend in today’s business. Geo-political boundaries have lost much of their relevance in business due to globalization. Today a North American business house can source its raw materials/components from a country in sub-Saharan Africa, manufacture/assemble in China and sell it in Europe or Japan. The barriers have fallen. Capital flows freely in different forms from one country to another and the primary considerations are lower costs and increased efficiency. Corporations have a more pragmatic view of business and focus only on increasing value. Globalization is a force in modern business that is growing with every passing day. Organizations are on the lookout for global markets, global manufacturing hubs, global logistic hubs, global labor force and global presence. Today a business entity tries to scale up its business to a global scale as soon as possible. The idea is to find lucrative markets in different corners of the planet, create products or services at any location where cost of creating the product or service is lowest and then connect the market with the manufacturing/servicing hub by a global supply chain. Globalization has today transformed from being a business philosophy to a unifier. Several books have been written on the effects of globalization. Globalization has brought opportunities as well as threats to business. Those businesses that can link themselves to this huge global business in any manner (in any part of the value chain) stand to gain from globalization but those that choose to remain outside the ambit may face difficulties. The opening up of the global marketplace for commerce has also brought in threats. Businesses can no longer remain in their comfort zones without having an open-eye to global competition. Local businesses face increasing competition from global players. They can choose to go global themselves or remain local and face competition. Whatever the strategy, one can no longer ignore globalization. It has forced businesses to become more efficient. It has changed the perception of customers and made them more demanding. It has made shareholders hungrier for profits and changed the fundamentals of doing business in many ways. It is here to stay and businesses have to be acclimatized to this modern trend.

Increasing Tendency of Outsourcing

More and more businesses are trying to beat competition by staying focused on their core functions and competencies and outsourcing the rest of the non-key functions to specialized firms. Specialized firms have sprung up (especially in low cost countries like India) that have made managing the non-core businesses of other companies their core competence. Special firms which are called Business Process Outsourcing (BPO) firms have created competencies in voice and non-voice customer relationship management, legal process management, etc., so that they can handle these ‘non-core’ processes of other companies at a fraction of the cost. This helps the outsourcing companies to remain profitable by lowering costs and improving quality of its key and non-key areas. Its key functions are now free to be given complete focus within the organization and its non-key functions are now key functions for someone else Le. the outsourced entity. The tremendous wage arbitrage opportunity provided by transferring these non-core jobs to developing countries makes it a lucrative proposition for companies in developed countries. This has been made possible by the great advances in information and communication technology that have made territorial distance meaningless. It has made the service delivery independent of boundaries. Anyone located anywhere can deliver service anywhere making the service delivery independent of boundaries.

Outsourcing can be of different types. Outsourcing can be voice-based or non-voice based. Sometimes outsourcing can be such that the outsourced organization works from the premises of the client organization. Most IT outsourcing are of this type. Some of the outsourcing jobs being carried out today are:

1. Direct selling by tele calling-Outbound calls
2. Direct selling by tele calling-Inbound calls
3. Customer grievance handling by receiving calls
4. Customer support by tele calling
5. Medical transcription
6. Legal process outsourcing
7. Technical support to sales team through inbound calls
8. Billing support and management
9. Accounts management
10. Human resource management
11. Recruitment assistance
12. Marketing analytics support
13. IT application development
14. IT maintenance
15. Entire IT management
16. IT hardware support
17. IT software support

And a host of other areas that are cost intensive and require specialization.

Outsourcing requires special managerial skills. Contracts management and time management are crucial for managing outsourcing. Constant monitoring of the outsourced partner needs to be adhered to but at the same time suitable vendor relationship needs to be maintained. Sometimes outsourcing may involve management of entities over different geographies with different cultures and time zones. From the perspective of the outsourcer, outsourcing involves challenges like,

1. Ensuring quality of output
2. Ensuring timely output
3. Ensuring zero cost escalation
4. Ensuring minimum customer complaints
5. Ensuring synchronized service over different time zones
6. Ensuring zero stoppages
7. Ensuring six sigma

All this requires a very good relationship management with the outsourced vendor. It requires understanding of the vendor’s capability and a realistic assessment of the achievable goals. It also requires constant communication to ensure that the information flow across the vendor and the client is not disturbed. It also requires an understanding of different work cultures to anticipate problems before they occur. It also requires a bit of legal knowledge of the laws of the land and also of the laws of the outsourced country, particularly with regard to contract laws, workplace related laws, labor laws, privacy and IT laws and security and IPR related laws.

From the perspective of the outsourcing agency the skill requirements are:

1. Service orientation
2. Ensuring six sigma
3. Ensuring proper client management
4. Ensuring zero stoppages
5. Managing a large body of young and educated labor force
6. Managing a large IT platform
7. Ensuring efficiency of service level
8. Ensuring polite and amiable customer handling

Outsourcing is a controversial issue. In developed countries, there is opposition to movement of jobs to low cost countries outsourcing. Indeed in countries like the US, outsourcing is a major political issue. Even though there has been a lot of hue and cry over outsourcing, several studies have shown that outsourcing not only results in enormous cost savings but also results in improved service delivery. Outsourcing is a natural corollary of the process of globalization as more and more businesses try to become globally competitive, they will search for ways to reduce costs and improve service. Outsourcing provides them a wonderful opportunity to do just that.

Reducing Hierarchy and Improved Transparency

Businesses have themselves transformed over time. The organization structures of business organizations are becoming flatter reducing unnecessary hierarchy. The popular corporate culture within organizations, both in the West and in developing countries like India and China has changed dramatically to a more informal first name, efficiency focused and work driven culture. Focus is now more on work and how to get it done and less on massaging egos of superiors and adhering to strict hierarchy as was the case in the past. This free and open culture is visible and reflected in several areas of business from the modern open office design to the style of writing memos. This open culture has resulted in greater efficiency and a culture of open communication and fast action and decisions based mostly on data driven reports.

This increased openness in the office environment is a process that can be traced to the late eighties when companies grappled with cultural issues in organizations. Transparency has improved because of the impact of MNCs. The increased transparency has resulted in faster and more efficient reactions from employees. The trust levels in companies have gone up with rise in transparency.

Increasing Clout of Civil Society and Media

Civil society and media all over the globe have become more aware with greater clout and power. From environmental issues to consumer protection issues, they are increasingly asserting their power to make consumers aware of different burning issues thereby creating challenge for business in some cases. Environmental pollution, global warming, consumer protection, safety, etc., have now come to the centre stage of business attention. No business house can afford to ignore these interest groups in this changed order.

Civil society bodies and media have made it impossible for companies to hide behind curtains of opacity. Public awareness coupled with an active media has forced companies to increase compliance on regulatory and ethical fronts. Companies now know that the cost of non compliance is much higher now, in terms of not only cost but also in term of loss of goodwill and public image. More and more companies have started to comply with public· welfare issues and the civil society and media have even started to rate companies on their performance in this front.

Increasing Customer Focus

Businesses have become increasingly aware of the need for customer focus to improve market share. They have realized that the customer today has a choice as never before. Those companies which will ensure customer loyalty through good delivery and service will come out as winners in the marketplace.

These trends of modern business indicate that the way business was being conducted has changed and will evolve further in the coming years. Now a more competitive business environment exists. Liberalization and globalization have made international and geographic boundaries meaningless. Cultural changes and social empowerment have themselves brought in positive changes in organizations. Corporate governance initiatives and media focus have made business more accountable and open. The WTO has reduced trade barriers. Businesses cannot survive in this environment in isolation. They have to embrace these changes. The increasing uncertainty of market forces have to be neutralized by visionary decision-making. Businesses have to be proactive. Decisions will have to be based on proactive approach such as using predictive analysis rather than the age-old reactive approach. Efficiency will ultimately decide who wins and who loses. The need therefore is for faster access to the right kind of information and insight to improve the quality of management decision-making. This is the reason why large corporate houses are investing millions of dollars to ensure a proper information technology infrastructure for better information management. Investments in Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Data Mining and Data Warehousing (DM and DW) systems have now become the norm rather than the exception in corporate houses.

                The business environmental changes have necessitated a new view on organization and the role played by information management in it. The challenge is to integrate and enable organizational structure, culture and form with information management so that management decision-making is faster, accurate, timely and reliable. Before we proceed any further on the need for information management in this new era, let us clearly understand some of the concepts related to the use of information within an organization.

Increasing Focus on Knowledge in Business

Business organizations are focusing more and more on knowledge as a key ingredient for success along with capital and labor. Focus is more on using knowledge to increase output and get greater value for the resources applied. More and more companies are investing therefore, in research and development to come up with new and better products and services. This knowledge focus has led to very fast obsolescence of products and services and hence, has indirectly led to increased competition.

Increasing Awareness of the Value from Managing Information

Businesses have become increasingly aware of the value of information and invest heavily to acquire the valuable information. Awareness has sunk in that ultimately the greatest differentiators are information based differentiators. Google, Big Flicks, and other such firms have made information their competitive advantage. This trend of information driven competition has created a new breed of companies and managers who focus on analyzing data to derive predictive kind of information so that decisions can be based on what the future has in store. This type of proactive decision-making is very effective and much better than the reactive type of decision-making that is done in traditional companies. This makes the analytics based competitors more agile to changes in the marketplace and hence, their reaction time is much less.

Increasing Investment on Information Technology

Companies are investing heavily in information technology as they are getting greater value from this kind of investments. This trend has resulted in the commoditization of information technology. Today due to the competitive pressures, most successful companies have MIS or even better versions of MIS in the form of ERP or CRM or even KM systems, but that is not able to give them the edge in competition as all its competitors also have similar systems. Thus, a competition has started in the installation of IT solutions for management problems. However, a very few companies make use of the information for decision-making, which is the original objective of these systems. Those that do, dig deeper into their own data to find insights for decision-making. These companies succeed as their decisions are proactive.