CHAPTER TWO Review of Literature
2.4 Information Strategy
Information on the internal and external environment of an organisation is a significant factor in the process of strategy development and decision-making by management in almost any industry (Citroen, 2011). Citroen (2011) showed in detail how the strategic use of information led to strategic decision making by executives in a German setting across 13 companies. The research highlighted that information played a crucial role in reducing uncertainty at any given time for the executives. Information about market developments, economic developments, customers, competitors and even technology information was considered to be indispensable for strategic decision-making by the executives. Furthermore, it was shown that management viewed the ‘quality’ of information as an important aspect of information based strategy. Quality of information meant integrity, transparency, robustness, timeliness and also completeness or a fair degree of completeness. Technology also played a vital role in this process. The results further showed that some of the 13 companies surveyed had their very own information departments, driven by technology, and which was made up of a variety of specialised staff including information specialists, business intelligence
14 specialists, analysts and legal professionals. This gave the companies a very strategic standing in industry.
The advances in ICT can effectively and feasibly facilitate information sharing and integrity across any organisation which can lead to more information based decision making and strategy development. This is supported by Yang and Maxwell (2011) who highlighted the role of information sharing as a strategy in the public sector based on interpersonal, intra- organisational and inter-organisational success factors. They concurred that information sharing is an important aspect of increasing organisational efficiency, performance and strategy. This view was convergent with those expressed by other researchers including Marshall and Bly (2004), Zhang, Dawes and Sarkis (2005), Cress and Kimmerle (2006), Razavi and Iverson (2006), and Willem and Buelens (2007).
Yang and Maxwell (2011) found that the establishment of IS that facilitated information flow and processes are pivotal to organisational success. Strong leadership support for information sharing and the harnessing of that information puts an organisation in a strong position in terms of decision-making and strategy development. Furthermore, information sharing provides a platform for building trusted relationships within the internal environment of the organisation, which leads to more internal cohesion. Lastly, by supporting the development of effective IS to support information creation, accuracy, timeliness and exchange of information, organisations could proceed with their daily activities with greater confidence and better outcomes.
Global challenges place pressure on organisations to act strategically as a method to saving money, harnessing resources and remaining sustainable. This is supported by Naranjo-Gil and Hartmann (2007) who highlighted the role of strategic information in the form of Management Information (MI) in a hospital setting. The authors argued that organisations, including hospitals, needed to revisit their strategies in terms of operational and cost efficiency to cope with both local and global challenges (e.g. Recession). Data was gathered from 218 Chief Executive Officers (CEOs) of public hospitals in Spain. The results showed that CEO’s stressed the value of accurate information as a basis for strong strategy (Operational and Cost Reduction strategies) and conveyed that further investments in the area of Management Information would be done to make it a key source of strategy development.
Furthermore, alignment of the hospital strategy with the information strategy was going to be
15 looked at in the future by the CEO’s (Naranjo-Gil and Hartmann, 2007). The strategic use of Management Information is therefore seen as a strategic approach to improving internal operations as well as making more informed decisions based on accurate information.
Similarly in a business context and in the changing economic climate, businesses need to cope with rapid changes. This can be possible through the strategic use of information. This is supported by Alexopoulos and Theodoulidis (2003) when they argued that often information overload complemented by the lack of strategic information structures as are the main reasons for an organisation not being able to acquire, harness and provide accurate information. This could have a negating effect on the business. Alexopoulos and Theodoulidis (ibid) looked at information strategy from a business point of view and developed an information model, known as the generic information business model that could provide a structured representation of the way information was used within the organisation.
Information from entities such as customers, suppliers, markets, competitors and the economic environment could be analysed to establish relationships and correlations. This provided an organisation with the relevant structure to harness information and provide direction for organisational information use as well as simplify the identification of problems and promote the development of solutions (Alexopoulos and Theodoulidis, 2003). Similarly Zahay and Peltier (2007) examined information strategy derived from customer information from an interactive marketing perspective. Interactive marketing requires an organisation to learn more about its customers and customise product and services to those customers (Zahay and Peltier, 2007). It was shown that strategies that were created based on the knowledge gained from the customer information and those organisations that managed customer information as a strategic resource seemed to have derived significant benefits such as increased customer satisfaction, increased sales and retention of customers.
The above literature depicts that information becomes a key resource in almost any organisation when used strategically. This links to the next section of ‘knowledge’.
16 2.5Knowledge
The above studies reflect how information can be used strategically to enhance an organisation in respect to efficiency, productivity, quality and competitiveness whilst also promoting strategic decision-making and informing organisational strategy. Strategic information results in or can be referred to as knowledge. This is supported by Kidwell, van der Linde and Johnson (2000) who asserted that the terms, knowledge and strategic information are sometimes used interchangeably, however KM has become more of a key term relating to how organisations utilise their informational and intellectual resources strategically. Furthermore, according to Laal (2010), information that is derived from data and then used strategically by any entity can be referred to as knowledge. However, knowledge should be distinguished from data and information in the sense that data is a representation of raw facts out of context, and hence not directly meaningful (William and Amin, 2006). Information arises when raw data is placed within some meaningful context and transformed into something that is readable and understandable. Knowledge is derived from that information and given value based on the organised accumulation of the information through experiences, communication or extrapolation (William and Amin, 2006).
A visual articulation of the view of knowledge by William and Amin, (2006) is shown in Figure 1.
Figure 1: Example of Knowledge articulated from (William and Amin, 2006) Information
Organisational Improvement
Knowledge
Data Raw information/Facts Decipher data and attach meaning
to it
Use knowledge for better decision making, strategy identification and achievement of organisational
goals
Obtain ‘relevant/strategic’
information by analysing, correlating and drawing out useful
attributes
2250959 2012 R2,250,959
Sales
R2, 250, 959 = Competitors annual sales for 2012 for electronic home
security systems Devise immediate strategy to increase sales on electronic home
security systems and attract competitor’s customers
17 The articulation of knowledge shown in Figure 1 also related well to Nilsen (2008) who argues that data is merely symbols (e.g. numbers, letters) that represents something in reality and cannot deliver any meaning unless put into some sort of context. Once it is put into some kind of context, it then becomes information. This information then becomes knowledge when it is used or leveraged strategically to execute or accomplish a specific task. This concurred with Davenport and Prusak (2000) who asserted that knowledge was derived from information which in turn was derived from data. The next part of the review takes an in- depth look at KM and its attributes with the main focus on Higher Education.