[Final Draft]

Transnational Research Associates

The Crucial Role of

Information Management Strategies

in Small Business Operations

Art Madsen, M.Ed.

Question One: Analyze, with respect to your organization, the role of information in the running of the business and evaluate the degree to which existing information systems (manual or computerized) support it.


1. This paper examines the structure of information-flow within a small import-export consultancy grossing 400,000 USD per annum. It analyzes the role of each employee in relation to the firm’s information needs. 2. Attention is devoted to business operations and the efficient use of information and data generated by on-going research and networking. A critical evaluation of current information management practices, in contrast to proposed improvements, is also presented. 3. The paper concludes that (a) restructuring of the role of the research analyst is necessary and that (b) reprioritization of certain tasks and functions in the information infrastructure is desirable.


Table of Contents

I. Introductory Description of My Information-Dependent Consultancy

II. Information Models and Systems Currently in Use at My Firm

III. Employee Roles in Information Management

IV. Performance Assessment: Structural Efficiency and Execution of Strategy

V. Concluding Observations and Recommendations

VI. References

VII. Appendix

I. Introductory Description of My Information-Dependent Consultancy

In addition to my primary profession as an industrial operations coordinator for ARAMCO Corporation, a position that requires a crystal-clear understanding of the fundamental principles of MIT, I also own and operate a small computer-based import-export consultancy. This business, generating approximately 25,000 USD per annum in net profit, predicated on a gross annual turn-over of 400,000 USD, occupies my spare time during the week and virtually all of my time during the week-end. I am fortunate that the Kingdom of Saudi Arabia, an Islamic Nation, recognizes Thursday and Friday as our week-end, since this enables me not only to worship with my compatriots, but also to conduct commercial transactions with Western Nations, in real-time, during their business week.

The main service that my three-employee firm provides involves the linking of reliable product suppliers with financially qualified customers who generally purchase specific types of electronic equipment on a large scale. I employ one full-time administrative assistant and one part-time research analyst, in addition to my own part-time commitment, as Principal Executive. Approximately 80 man/hours per week, therefore, are at the disposal of my firm. Our facilities include a state-of-the-art, fully computerized office, FAX, telephone, plus more than ten subscriptions to technical and managerial journals, newsletters and periodic confidential reports from a correspondent in London.

Analysis of the Information Architecture of my firm, its accompanying Design Strategy and a discussion of key Informational Management Process Tasks, as they pertain to my small business, will constitute the main thrust of this paper. Reference will be made to the function of information within my firm and clarification of information management systems currently in place will shed light on how efficient my operation is, and what steps can be taken to improve it. Those steps will be set forth succinctly in the conclusion of this paper.

II. Information Models and Systems Currently in Use at My Firm

An import-export consultancy thrives on accurate information, properly managed and competently utilized. Information is the crucial lever in my firm for maintaining competitive advantage and enhancing client satisfaction. My firm’s strategic plan impacts our cash-flow dynamics directly and our dependency on external information is linked intimately to success or failure of potentially lucrative accounts. My firm’s needs are prioritized, of course, and high on the list of necessities are accurate information and professional interpretation of all data and input.

There have been at least five prominent information models developed by theorists, notably by Davenport, Eccles and Prusak in the respected Sloan Management Review (Fall 1992). Many of Davenport’s conceptual models are also recognized by major information-oriented agencies such as NASIS (1998). After reviewing Sloan’s options and thinking about the information model in effect within my firm, I’ve concluded that the approach I’ve been using best fits the Monarchy Model, in contrast particularly to the Anarchy or Feudalism structures in place within many small firms. When potential clients approach my firm in search of suppliers, I invariably share this general type of vital open-source information with my associates; however, when they or I generate confidential raw data or intelligence, I take possession of it, analyze it myself and sift it carefully. I often do so without consulting my subordinates. This top-down information managerial style is typically monarchical since I tend to "play my cards close to my own chest."

Simply reviewing Davenport et al.’s thinking, I can already see flaws in my firm’s basic model. Perhaps by jointly analyzing even confidential information with my subordinates, I may generate outcomes, decisions or results conceivably culminating in enhanced profit or efficiency.

Desirable features of the monarchic model include centralization of authority and control by one person of information flow. I would like to think that my approach is that of a benign monarch, sharing as necessary on a "need to know" basis, with my own associates. There is no attempt at reaching a consensus based on my overall assessment of information generated. This has invariably led to success of my firm thus far; although if information were shared more liberally (under other models, such as the federalist approach described by the referenced Sloan Management Review article) my firm’s bottom-line results may progress to even more profitable levels.

Within the context of my firm’s operations, one concept that is important to grasp involves the reality of our pre-existing information systems, developed over the last four years largely by trial and error. A decision has to be made to upgrade these systems either by building on the existing base, or by more radically revamping and transforming the system in its entirety. The integrity and accessibility of data already on file has to be maintained in either case and personnel must be retrained, to some degree, in order to cope with technological developments. Most businesses tend to build on previous information structures, modernizing slowly. Their administrators feel that this is both humanly convenient and cost-effective.

In the case of my small firm, I’ve installed several standard software packages, and have delegated appropriate tasks to my associates, so to perform and maintain the following six vital information-sensitive functions:

1. Client Data Base, Client Payment Records, and Potential Client Needs

2. Supplier Data Base, Supplier Products, Prices, Reliability and Quality Data

3. Internal Payroll, KSA Taxes, Fees, Bank Account Data

4. Import/Export Data, Logistical Connections, Applicable Customs Legislation

5. Confidential Data Base, including projections of industrial trends likely to affect existing and potential client base.

6. Graphic Representation of Income History, Manpower Utilization, Internal Expense Record, and Commercial Sector Analysis.

There is an attempt underway among my two associates and myself to coordinate new computer process innovations with both management processes and business processes so that optimal overall performance is achieved. I have been increasingly moving toward dismantling of the centralization of these processes, and have begun to share more information and data with my research analyst in accordance with the priorities and patterns portrayed simply on Appendix A. Psychologically, this is a difficult transition for me since I have personally built my business over the past four years and feel that I must be "in control" of key data; nonetheless, I am beginning to understand the need to capitalize on the thinking of my colleagues as well.

Although it is possible to shift (1) managerial styles without affecting either (2) MIT systems already in operation or (3) actual business processes, I have opted for a three-pronged approach incorporating gradual improvement of all these organizational components. Apparently, formal studies have not been conducted in the academic literature concerning the intrinsic value of upgrading one or more of these three critical elements; so, the value of my combined approach has not been documented in terms of ultimate potential benefit to my firm (McGee et al., 1993, 198). In my case, I have simply recognized the surface value in improving MIT systems in tandem with other processes.

III. Employee Roles in Information Management

There seems to be a fairly well balanced division of duties within my consultancy. Even though only three employees are shouldering the entire workload with 80 man/hours per week of time, we are adequately performing the four basic tasks focused, respectively, on information content, format, process, and enabling. To perform these various functions, two fully equipped Dell-Dimension IBM-Compatible PCs, featuring Excel, Quattro-Pro, Office 97, Lotus Software and Enhanced Data Storage Capabilities serve the purpose of our "corporate librarian", whereas I, as the benign monarch mentioned in McGee and Sloan, perform information systems functions. Increasingly, I am relying on my research analyst to process raw input and feed a more refined evaluation of this information directly to me; he serves the purpose, therefore, of the ‘function-specific knowledge worker’ in my organization. The one full time employee performs all peripheral assistance tasks, such as correspondence, phone, FAX, and meeting minutes. His non-decision-making role may be broadened in the near future to include browsing of the Internet’s commercial databases for potential business leads and pricing information.

A superficial glance at this structure would seem to reveal some inherent weaknesses. I have the full-time employee performing simple tasks, while the research analyst is conducting higher-level functions. Consideration is being given to reducing the administrative assistant to part-time status and granting full-time hours to the research analyst. The analyst would then be responsible for creating his own network of information providers, whether they consisted of electronic or conventional print media. This modification could enhance the amount of quality-time available to my firm, while my own hours would remain constant due to other professional obligations at ARAMCO.

The match between my current system of information analysis and the actual on-going needs of my fledgling firm is quite adequate at present. However, as mentioned, I anticipate upgrading the functions of the Research Analyst and will strive internally, in other ways, to improve my firm's capabilities to sift and evaluate the quality of input and data received.

IV. Performance Assessment: Structural Efficiency and Execution of Strategy

As the needs of my firm evolve, it will become important to establish a viable means to assess the effectiveness of changes made in the information architecture. Methods have been developed by statisticians to do so. For example, using multiple regression and correlation-based techniques, predictive validity readings and income projections can be produced with a fair degree of accuracy. What may have worked best under the old methods can be compared with early results under the new arrangement and extrapolations can be calculated to determine the likelihood and degree of enhanced future income and/or the best ways of adjusting man/hour utilization. Additionally, studies, not necessarily too complex, can be developed to evaluate the effectiveness of reassigning certain information-sensitive tasks (see Appendix A) to the Research Analyst, and the usefulness of the Principal Executive broadening his canvassing for new clients and account enhancement activities. The overall structural integrity of the slowly evolving system in use at my firm can be assessed using these methods, and others, with a view toward optimizing and streamlining all internal activities related to information processing.

Yet, how can new decisions to modify old practices be actually implemented and executed? It would seem advisable to confer with both the Research Analyst and the Administrative Assistant to ‘drive home’ the importance of carrying out the decisions made in earlier conferences or on the basis of recognized MIT literature whenever applicable to a firm as small as a three-employee operation. Constant monitoring of progress being made, and of the ‘willingness’ with which these decisions are being executed, can be undertaken. Notes can be made by all three employees and then shared at periodic meetings. Decisions can be adjusted as a function of ‘perceived efficiency’ of the revised information system and also in light of compliance or non-compliance, by any or all of the three employees, with decisions found useful ‘theoretically’, but perhaps not in actual practice.

V. Concluding Observations and Recommendations

In recognition of the governing principles of modern MIT systems within both large and small business firms, and given the analysis of my import-export consultancy’s performance over the past four years, some changes will be required to maintain or improve income figures in the year ahead. Evaluation of the role of the research analyst resulted in discovering that his tasks should be expanded, at the expense of working hours presently assigned to the Administrative Assistant. This will measurably enhance the quality-mix of personnel hours spent on information acquisition and assessment.

The Principal Executive will continue to generate client leads and will match suppliers to those clients with whom the firm has entered into a contractual relationship.

The administrative assistant may be assigned low-level information gathering tasks, but (for information purposes only) will report directly to the research analyst, whose reports and recommendations will be submitted, in turn, to the Principal Executive for ultimate decision. The Davenport concept of monarchical control of information will probably be maintained in the hands of the Executive for the time being. However, a distinct shift toward a ‘federal-style’ sharing of data will ultimately be forthcoming in the interest of maximizing utilization of brain-power within the firm.

Increased attention will be devoted to the role and importance of information in operation of the firm, in accordance with the observations recorded in this paper. It is anticipated that, in the new millennium, higher levels of profit will be generated through the more efficient use and processing of raw information and by applying modern MIT analytical techniques to that information base.


VI. References

Davenport, T., Eccles, R., and Prusak, L. "Information Politics," Sloan Management Review, Fall 1992.

Doll, Otto, Pres., National Association of State Information Systems, 1998, NASIS Link

McGee, J., Prusak, L., and Pyburn, P. Managing Information Strategically, John Wiley & Sons, Inc., New York, 1993.

Wolstenholme, E., Henderson, S., and Gavine, A. The Evaluation of Information Systems: A Dynamic and Holistic Approach, John Wiley and Sons , Chichester, 1993.


VII. Appendix A

Five Primary Information Acquisition Tasks, Previously Performed by Principal Executive, Assigned, effective December 1999, to Research Analyst