Principles of Business and Finance Review (unit 2)

Helps businesses Comply with laws and regulations

Companies must follow certain rules regarding information management. Not only must they follow their own internal policies, they must adhere to laws and regulations set by the government as well. A major compliance law in the United States is the Sarbanes-Oxley Act of 2002. To comply with Sarbanes-Oxley and other laws, companies must take certain steps to manage information correctly.

Being unprepared for a disaster

Companies must have a plan in place to keep business running smoothly in case of a disaster. Employees must be able to access the information they need. Not being prepared puts the business and its clients at risk.

Maintains organizational consistency and credibility

What would happen if a company's sales representative sent a client a quote on a product one week, and the next week, a different sales rep from the same company sent the same client a different quote? The client would probably not think much of this company's professionalism. Had the company managed its information better, however, this mistake would not have occurred. Information management helps companies maintain consistency, and consistency is a main ingredient of a good reputation.

Facing technology issues

While an information management program is more than just technology, most aren't complete without technology. Any time a business deals with technology, there are certain risks involved, such as viruses and system failures. Companies must be prepared to deal with these issues promptly and effectively to ensure that their information is protected and available to those who need it.

Supports decision making

It is impossible to make the right decisions unless you have all the information you need. When a business manages information appropriately, it takes the guesswork out of many decisions. Informed decisions are better decisions, and better decisions reduce a business's risk. Informed decisions also help a business to keep ahead of the competition.

Differing departmental needs and expectations

It may be challenging for the information management department to meet individual needs and integrate a consistent program throughout the organization at the same time.

Secondary Information

Second hand accounts (Biographies and Books, etc.)

No single "right" approach

—There is no "cookie cutter" approach to information management. What works for one company will not necessarily work for another. Each company must design a program that best fits its needs.

Primary Information

First hand accounts (Interviews and Autobiographies of experts and scholars, Historical Documents- The Declaration of Independence, etc.)

Dealing with privacy and security issues

A lot of the information a company manages is sensitive. It may contain proprietary knowledge, such as trade secrets, or it may contain personal information for a company's clients. Companies have a responsibility to protect their clients from identity theft as well as to protect them from getting unwanted spam and junk mail. An information management program that is not running effectively may put this information at risk.

Going over on time and budget

Designing and implementing an information management program can take a lot of time and can cost a lot of money. A company must be careful to balance its needs with its budget. It must figure out how to work within its means to run a program that is appropriate for its size, its industry, and its information management needs.

Preserves organizational identity and integrity

Every company wants to succeed and to stay in business for a long time. Think of businesses and products that have been going strong for 50 or more years—if these companies didn't manage information appropriately, they would lose track of many important documents and files pertaining to their long corporate histories. Companies must protect their identities as well. This means that information regarding copyrights, patents, trademarks, etc., must be managed properly.

Saves time and money

For a business to run efficiently, information must be managed and organized so it can be found quickly whenever it is needed. And, in business, where time is money, this is cost effective as well. Information management saves businesses time and money by controlling information overload, cutting down on enormous "paper trails" and maintaining a higher level of productivity.

Helps businesses serve customers more effectively and efficiently

Managing information appropriately helps businesses focus on the important task of serving customers, which in turn helps lead to higher profits.

Misunderstandings

Many people don't understand what information management is or what roles they should play in their companies' programs. They may believe the myth that information management is simply a form of technology and that it doesn't involve them.

Maintains continuity in case of disaster

Sometimes, things happen that a company's executives and managers cannot control. These disasters might be manmade, such as a building fire, or they might be acts of nature, such as a tornado or a flood. No matter what, though, companies must ensure that business can still run smoothly and that employees can still access the information they need. This part of information management might include backing up files and storing certain vital information off site. It might also include maintaining updated contact information for all employees and running "drills" to practice procedures in the event of an emergency.

Changes business and technology

The business world is constantly evolving, and both business needs and technology are changing all the time. Companies can't sit back and assume their current programs will continue to fit the bill. They must stay alert to information management needs and trends and be willing to adjust accordingly.

Information overload

The modern business world is completely "wired"—connections are made instantly, and information flows freely and abundantly. While these advances bring many benefits, there are drawbacks as well. It is often hard for workers to distinguish between what information is important and what information is not. This can waste of a lot of time and resources.

Being unprepared to face audits or lawsuits

Those in charge of information management carry an important responsibility for ensuring that the company has its records "in order" in case of a financial audit or legal action. In an audit, the company may have to provide certain accounting records to prove that its books are "legit." In a lawsuit, a company may need to provide all kinds of information relevant to the case—anything from personnel files to e-mails to memos. Not having this information available can get a business and its executives in big trouble.

Data processing

is just one small part of information management. Data are the necessary facts and figures, but information is what you get when data are in a useful form.