Information Overload and Management Decisions

Information overload means to confront huge quantities of barely correlated data. What is also disturbing, all information seam to contain certain benefit for user. It is everyday battle with flood of data.

Let’s analyze a little bit information overloads in corporate environment where information complexity and quantity is extremely high.

Management faces serious problems in the decision-making processes due to information overload. With financial and economic crises corporations generate internal information like never before. Information generation is forwarded toward decision makers, strategic decision makers. Management has to deal with hundreds of pages of key performance indicators presented in graphs, tables, projections and similar. It is overwhelming for persons to handle all information. It is almost impossible to correlate all information and to create knowledge of it, because everyday information overload includes thousands of Key Performance Indicators and Financial Ratios. Not to mention that it is highly questionable what kind of wisdom (where and when to use information) will be generated on knowledge (what information means).

• It is the fact that top management mostly uses hard copies, huge reports.
• It is the fact that top management barely uses Decision Support Systems or Management Information Systems. Their analysts use it, not them.
• It is the fact that top management have only several scenarios to decide upon

Beside huge internal information hyper production, management has to deal with other sources of information production like: market, micro and macro economy, other industries, innovations, experience, knowledge management, and etc. This is also data included into Decision Support Systems, additionally complicating and enlarging information overload. As a matter of fact it seems that every employee and corresponding organizational entity tries the best to generate quality information for top decision maker.

When all information are summed up (financial statement, derivatives of financial statements, operative business reports, official non-financial reporting, analysis, projections, and many other information carriers) it is information overload that significantly grew last years. Information overload does not contribute to value of decisions if they are properly not exploited.

Information Overload can not be stopped. Can be stopped temporarily, can be reduced, but sooner or later information overload will come back.

Information overload does not represent problem if it properly used. Usage means to include all small beneficial particles that each information contains and to sum up all positive business contributions. Solution is to find out how to handle information overload for own benefit, for company benefit.

Solution that can handle information overload for corporate decision makers needs to have following features: fast – inclusion of all new information and knowledge and fast simulation of projections, integrative – integration of all information in one DSS platform like a huge net that correlates everything, and simulating – change of any item in huge DSS net needs to be measured (quantified as money) on all other net components.

Model that has all required features is Total Controlling Concept!