October 16, 2006

"USING INFORMATION STRATEGICALLY"

In Japan there is a movement underfoot for corporations to learn how to use information for strategic purposes, not just tactical. The Japanese want to go beyond their core systems and use information for competitive advantage. To do so, they are reevaluating the fundamental characteristics of information, which is a good place to start.

Even after 50 years of computing, there is still mass confusion over the sheer nature of information. Before we can use information for any purpose, be it strategic or otherwise, it would make sense to standardize our terms and establish a conceptual foundation. Fortunately, this has been well established in "PRIDE" since its inception.

There are those in both the corporate and academic world who have difficulties differentiating between data and information. Although they are closely related, they are certainly not the same.

INFORMATION = DATA + PROCESSING

Data is the raw material needed to produce information. By itself, it is meaningless. Information, on the other hand, is the intelligence or knowledge needed to support the actions and decisions of an enterprise. This is an important characteristic; if it cannot support any actions and/or decisions, it is not information but, instead, raw data.

Data is used to identify, describe, and quantify the objects of a business (e.g., products, orders, billings, shipments, employees, etc). Only when it is assembled into a specific context, at a given moment in time to support a specific business purpose does it become information.

Specifying information requirements does not begin with the data or the layout of an output, but rather with an understanding of the consumer and what he/she wants to use the information for (actions/decisions) and when (timing). Following this, data and processing requirements are relatively easy to deduce.

There are fundamentally three types of information: policy, control and operational. Policy information is used to establish corporate direction; Control information is used by middle management to implement policy decisions and control corporate operations, and; Operational information is used by employees in the daily affairs of the business, such as processing orders, payroll, and shipping products.

Policy, control and operational information also fits conveniently into a three tiered model of the enterprise which specifies the actions and decisions of the business. Such a model represents the business functions implemented by the enterprise.

Up until now, our discussion has been limited to the use of information internally within an enterprise, not externally. This is where the Japanese interests are piqued. Feeling comfortable with the stability of their internal systems, they now want to take the next logical step and outperform their competitors and seize larger market-share. To do so requires new types of information systems to analyze consumers, markets, competitors, etc., and this is where strategic systems come into play.

TACTICAL VERSUS STRATEGIC

The difference between "tactical" and "strategic" is subtle, but significant; it would be erroneous to consider the two as synonymous. Tactical information deals with our day-to-day activities within the enterprise. Strategic information, on the other hand, is concerned with competitively broadening market-share in order to dominate. Perhaps the best way to differentiate between the two is to think of tactical information as addressing "internal" needs, and strategic information addressing the "external" world.

Whereas tactical systems are ultimately based on the model of our own enterprise, now it becomes necessary to devise new enterprise models representing our customers and competitors so we can best understand their information requirements and where their strengths and weaknesses reside.

Let me give you an example of how this works. I know of an automotive parts manufacturer in the U.S. Midwest who was interested in increasing their market share. To do so, they studied the operations of their customers, specifically independent auto parts outlets. Their study found one of the biggest headaches for outlets was in managing inventory. The parts manufacturer thereby devised a plan whereby they provided a free turnkey inventory system for their customers, complete with computer hardware. This greatly streamlined inventory for the outlets as well as simplifying purchase transactions. More importantly, the parts manufacturer was able to monitor inventory levels of the outlets which automatically triggered reorders as inventory levels got low (as opposed to waiting for the outlet to reorder parts). Further, the parts manufacturer was able to monitor sales trends and forecast production schedules. When sales volume slowed, sales promotions and advertising would be triggered to encourage business. All of this created a "win-win" situation for both the parts manufacturer and their customers. The customer got an easy-to-use and reliable inventory system for free, and the parts manufacturer, in turn, gained wider market share as more and more outlets bought into the program. Smart. Very smart.

Developing strategic systems such as the one mentioned here requires a new breed of systems analyst who understands as much about the outside world as they do about their internal operations, someone who can "think outside of the box." In addition to enterprise modeling and comparative analysis techniques, this next generation of systems personnel must be intimate in trend analysis and forecasting, so they can monitor trends in socioeconomic factors, technology, and the market overall. Such people are a rare commodity and will doubtless be well compensated.

CONCLUSION

The more we understand about the external entities affecting our business, as well as our own internal operating limitations, the better we can compete. The Japanese are cognizant of the lessons being taught by Kazuya Matsudaira who uses analogies from the second world war to convey his message about strategic information with remarkable clarity. It is his contention that leveraged information resources used by allied forces played a strategic and decisive role in winning the war. Such an analogy is well understood by the Japanese. They know in today's global economy, the corporate winners will undoubtedly be those who know how to use information for competitive advantage.

OUR BRYCE'S LAW OF THE WEEK therefore is...
"The more we understand about the external entities affecting our business, as well as our own internal operating limitations, the better we can compete."

"BRYCE MANAGEMENT ANALYSIS" SERVICE INTRODUCED

We've just introduced a new free service for managers to perform a self-analysis of their style of management, including leadership and corporate culture. Check it out at:

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MBA DAILY PRODUCTIVITY ANALYZER INTRODUCED

Also be sure to check out our new "MBA Daily Productivity Analyzer" which is a free calculator to evaluate a person's personal productivity during the day. It is also available at our corporate web site.

http://www.phmainstreet.com/mba/mbaprod.htm

IN OUR "DOWN THE ROAD" SECTION

The Association of Records Managers and Administrators (ARMA) will be holding their 2006 International Conference and Expo in San Antonio, Texas, at the Henry B. Gonzalez Convention Center on October 22nd-25th. For information, contact ARMA's headquarters at 913/341-3808 or 800/422-2762 or visit their web page at https://www.arma.org/

The International Institute of Business Analysis will be holding their World Congress for Business Analysts (in conjunction with ProjectWorld 2006) on November 6th-9th at the Caribe Royale Hotel in Orlando, FL. For information, call 212/661-3500 x 3702 or visit their web site at: www.iirusa.com/baw

The Association of Management Consulting Firms will be holding their 60th Annual Meeting on December 6th-8th at the Harvard Club in New York City. For information, contact AMCF headquarters in New York at 212/551-7887 or visit their web page at: http://www.amcf.org/

If you have got an upcoming IRM related event you want mentioned, please e-mail the date, time and location of the event to timb001@phmainstreet.com

NEW eBOOK: THE BRYCE IS RIGHT!

Folks, we've just released a new book on management entitled, "The Bryce is Right! Empowering Managers in today's Corporate Culture." This is a frank and candid description of the state of the art in management and includes essays on the problems in management today, along with some pragmatic advice on how to deal with them. Basically, this is a condensed course in management. As such, it is suited for managers, either those aspiring to become a manager or for those who need a refresher course. It will also be of interest to young people entering the work force, and is excellent for college curriculums.

Charles Cole of Lyndhurst, OH, said it is a "Very interesting book. Good work! It reminds me of some of the early works I read by W. Edwards Deming. Too bad the American corporate gurus of his day didn't pay him heed."

And Wolf Hager of Fort Myers, FL, says it is "A very impressive publication which requires careful reading and reminds me somewhat of Peter Drucker."

The price is just $20 plus tax. For more information on our book or to order on-line, see:

http://www.phmainstreet.com/mba/bryce1.htm

We have also just produced a new one-day training program of the same name. For more information on both the eBook and course, please visit our web site at:

http://www.phmainstreet.com/mba/bryce1.htm

While there, look for our new MS PowerPoint presentation describing both the book and the training program.

MY "PET PEEVE OF THE WEEK" IS "THE DECLINE OF CRAFTSMANSHIP"

I happened to visit my brother-in-law in Cincinnati not long ago. He is a master machinist in a machine-tool company up there. He gave me a tour of his company and it was interesting to see how he can take a block of aluminum and transform it into a high-precision instrument. He patiently explained the whole process to me and described the details for making such an instrument. His knowledge of the overall process along with the tools he used was very impressive. More importantly, he expressed his pride in his company and the products they produced. This was all very refreshing to me as you don't hear too many people anymore who take pride in their work and know it thoroughly.

I think you can trace the decline of craftsmanship back to the 1980's when the bean counters started slashing costs and programs aimed at the production of quality products. Fortunately, this didn't happen at my brother-in-law's company which is privately owned by a German immigrant who is also a craftsman and invests heavily in his people and research and development. The consciousness of the people in the plant is such that if the product isn't just right, it is done over again. Interestingly, the company doesn't have any problems in terms of morale, tardiness, or absenteeism. The older workers mentor the younger workers, and the employees in general relate to their work. In other words, management has created an environment of cooperation as opposed to competition, thereby allowing workers to focus on their work and take personal initiative to solve problems themselves. By doing so, the workers have been able to marry their personal and professional lives.

I found this all somewhat eerie and I felt I had been transported back in time to another era where workers were dedicated craftsman and genuinely cared about their work. We don't see a lot of craftsmanship any more, particularly in I.T. departments who prefer "quick and dirty" solutions these days. But I shouldn't single our I.T. departments as they are not alone in this regards. Just about everywhere you go, you don't find too many people who understand the total process of building something and sweat over the details. Most people simply don't care and disassociate their personal lives from their professional lives, ...which I find rather sad.

Such is my Pet Peeve of the Week.

AND FINALLY...

I received an e-mail from a Mike Jones in New York who wrote me regarding last week's essay entitled, "Understanding Corporate Culture."

Mike writes:

"I know exactly what you mean about the alien vs. member phenomenon. I have a new boss who is a strictly 9 to 5 type of guy. Whereas everyone else sweats over project deadlines, he simply punches in and out. I've noticed this is starting to affect the attitudes of the staff. What can be done about it?"

Thanks Mike for your note,

Sounds like the manager hasn't adapted to the corporate culture yet. Either that or he is determined to undermine it. Further, I have found clock watchers tend to be disconnected from their work. In other words, they do not see their personal and professional lives as one. This is not conducive for craftsmanship and leads to bad work habits.

What can be done about it? Well, that depends on management. If they start to notice a decline in productivity of the department and do nothing about it, then you will become a 9 to 5 operation. But I'm betting management will make some changes if they see the manager is not adapting to the corporate culture.

Again, Thanks for your e-mail. Keep those cards and letters coming.

MBA is an international management consulting firm specializing in Information Resource Management. We offer training, consulting, and writing services in the areas of Enterprise Engineering, Systems Engineering, Data Base Engineering, Project Management, Methodologies and Repositories. For information, call us at 727/786-4567. For a complete listing of my essays, see the "PRIDE" Special Subject Bulletins section of our corporate web site.

Our corporate web page is at:

http://phmainstreet.com/mba/

Management Visions is a presentation of M. Bryce & Associates, a division of M&JB Investment Company of Palm Harbor, Florida, USA. The program is produced on a weekly basis and updated on Sundays. It is available in versions for RealPlayer, Microsoft Media Player, and MP3 suitable for Podcasting. See our web site for details. You'll find our broadcast listed in several Podcast and Internet Search engines, as well as Apples' iTunes.

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Copyright © 2006 by M&JB Investment Company of Palm Harbor, Florida, USA. All rights reserved. "PRIDE" is the registered trademark of M&JB Investment Company.

This is Tim Bryce reporting.

Since 1971: "Software for the finest computer - the Mind."

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