Strategic Business Decisions for better business performance on market are based on set of quality information. It is top priority to set systems that will provide data but with complex systems like corporations it’s not a simple task and throughout the years it’s getting harder and harder due to exponent growth of new and interrelated data. Decisions based on best corporative intelligence are always welcomed and are challenge for management and employees. To support decision tensions IT solution industry created Corporate Performance Management as platform to support stated initiatives.
Continue reading DECISION PROBLEMS – Recognizing Main Drivers [...]
Knowledge integration means to connect information that are not possible to connect through information systems, at least not without huge efforts. Knowledge integration means to connect information sets with new relations, something that is not connectable with information intelligence but is possible with combination of experience, market knowledge, internal information flow and etc. When you simply just know that information are connectable…
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I like decision manipulation. Before decision is made I do like to play with possible scenarios, to manipulate with decision, and to fine tune best revenue share. In other words, it is easy to find profitability peak, because costs are more or less fixed for considered decision but revenues are changeable. It is not an empty phrase to say that for certain decisions costs are fixed and revenues are changeable. If changes are made in small steps and if they are directly related with fixed cost categories, they are indeed fixed. On the other hand, revenues can be changeable, depending on price & discount policy, bundled products and services, guarantees, delivery timing, product and services portfolio, and etc. All named factors can be modified without direct influence on cost side. Catch is, these are fine and sensitive steps.
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For every decision quality on time information is essential. Making decisions without analyze of information is a wild guess. Several groupings of decisions information can be defined according to nature, intended purpose and source. There are two basic types of information needed for decisions, let’s name them decision information, with different structure – nature: financial and non-financial (business) information. Shown on figure with two parts of information pyramids (black part for financial information and other business information). Another major decision information separation can be considered as source of information, is the information source inside company or from outside: internal and external information. Internal information can be additionally distinguished by Business Units specifics: sales, customer care, marketing, production, logistic, materials, and etc.
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Is it possible to have information place in company where everlasting changes cannot spoil strategic information sets? Further on, what is the sense of permanent change in companies. Why so often companies have to reshuffle and totally replace decision making basis? Software, hardware, vendors, consultants, experts, business analysts… Everything has to be changed from time to time, and does periods are getting shorter and shorter. Actually when one implementation of the particular core information system is made others are already on the way… And so on and so on. How this permanent changes affect strategic decision making systems?
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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.
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The benchmarking is done once a year or even once in two years. It is a rare process, and aim of it is to compare performance of many companies. Comparison is made according to defined standard of benchmarking experts and very thoroughly. Since many companies are compared and analyzed, essence of comparisons are naturally performance indicators from their Information Reporting Systems. Each company has its own unique environment, its own unique Information Systems landscape, and mostly its own decisions and methodology of performance indicators. It is an illusion to expect prepared and standardized data from different companies.
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Knowledge Convergence and Direction to Strategic Vision
To repeat text from our old post…
Information becomes knowledge with: analysis, comparison, making relations and with cause effect connection. That’s why information need to be accurate, on time, valid and usable. It is not any more problem to gather information but it is problem to interpret them and
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