New Demands on Information Management ProcessesMarch 2003 - 2 of 6 - S. Shemwellwill enable rapid response regardless of whether an outage is the result of a naturaldisaster such as a hurricane or otherwise.Finally, the petroleum industry faces increased pressure from stakeholders to increaseasset performance. Not only investors, but local communities, government agencies, andenvironmental groups expect specific organizational behavior and appropriatedocumentation of conduct.Recessions are cathartic events. While the mettle of the strong is tested, the weak oftendemise. As part of this renewal process, mergers and acquisitions change thecompetitive landscape. Smart acquisitions may lead to enhanced shareholder value,however, most mergers are dilutive
.Good and timely information clearly enables the modern organization. However, there isan
. Management is expecting Information Technology (IT)organizations to reduce costs, while at the same time expecting greater informationsecurity. Conversely, for many of the reasons articulated in this paper, managementmust have more information quicker.
The Information Paradox
As the demand for information increases as articulated in this article
, IT budgets are heldin abeyance.
Organizations expect more from work processes, individual contributors,technology resources, and supply chain partners. With recessionary pressures andglobal uncertainty, companies must do more with less.Can management expect IT to provide more timely, even
information toexecutive dashboards, substantially reduce the budget, and insure corporate informationsystems are secure? Seemingly a paradox, the answer is yes!Critical information systems are robust and secure when architected properly andappropriate data management, applications software, and communications protocols areused. Modern software is built for the Internet economy and enables firms to generateInternet Economies ahead of their competitors. Attributed to John Malone, CEO of TCI,well end up with a much lower marginal cost structure and that will allow us to underprice our competitors.
Economic Transaction Costs
Economically, organizations exist because their internal transaction costs are lessexpensive than if they acquired goods and services externally. The networked economyallows organizations to extend their business model beyond the physical limits of theorganizational boundaries and capitalize on a global supply chain. Network economiesreduce transaction costs and value is realized when the marginal cost of new informationexceeds the costs of acquiring and processing that information.
In other words if the economic value of secure, accurate, and timely information is greaterthan the costs of that information, then it adds value to organizational processes. Thus,the Information Paradox can be solved using todays technology intelligently employed tocapitalize on intuitional processes. Cutting this Gordian knot using technology andchange management instead of continuous improvement from the status quo canleapfrog a firm wielding the knife into a higher competitive orbit.