Technology & Innovation

Managing information effectively: a cross industry perspective

October 25, 2010

Global

October 25, 2010

Global
Our Editors

The Economist Intelligence Unit

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Managing information effectively is a series of reports by HP, written in cooperation with the Economist Intelligence Unit

Managing information effectively is a series of four reports focused on strategies for managing information flow and security across and within sectors. Each report focuses on one of four sectors: healthcare, government and public sector; retail banking and discrete manufacturing.

Government and public sector overview

Public sector strives to improve information strategies
Public sector organizations, and especially governments, have historically been slow to share information between and even within organizations. They have also been guarded about making information available to the public. Recent policy, regulatory, and legal measures—as well as calls for greater transparency, accountability, citizen participation, and efficiency in government—are changing this posture.

Public sector organizations increasingly recognize the need to share information effectively to ensure public safety and, in some cases, national security. Sharing information also can help improve a country’s competitiveness and spur economic growth.

The survey confirms these trends. The public sector—which for the purposes of this study excludes healthcare and education—is working to improve its information strategies, while recognizing there is still much to be done. It lags the other sectors, but in one respect—recognizing the importance of unstructured information—it is a leader.

Discrete manufacturing sector overview

Managing information effectively: the discrete manufacturers’ perspective

Effective information management is an essential element in the strategies of discrete manufacturers, which in this report include aerospace, automotive, consumer packaged goods, and high-tech manufacturing companies. Historically, these organizations have gained competitive advantage through careful control of their supply chains, from raw materials to finished goods. As a result, they have been early and major adopters of strategies, processes, and technologies to maintain the efficient flow of information within their organizations and with their suppliers and customers.

The modern supply chain is becoming increasingly global and complex. Manufacturing now routinely takes place in multiple dispersed locations, including in developing countries. This creates both new opportunities and greater risk. As their economies grow, developing countries become attractive markets. Risk arises from the possibility of supply-chain disruptions and from instability due to supply-chain complexity, as well as from the varied regulatory environments, geopolitical uncertainty, and weak disaster-response systems in some of the countries where companies operate.

The survey shows that the sector is trying to keep pace with the challenges that accompany globalization and increased complexity. It also shows the growing economic power and influence of the Asia Pacific region in this sector.

Retail banking sector overview

Retail banks confident in information flow and security management
In the wake of the recent financial crisis, banks have been in the spotlight. Stress tests in both the U.S. and Europe have measured banks’ preparedness to deal with adverse conditions. New regulations are being implemented to protect consumers and the global financial system from further disruption. In this environment, we would expect retail banks to re-evaluate their strategies for improving the flow of information across their organizations and ensuring its security. As survey results show, however, that is not the case.

A focus on information management and security is nothing new for retail banks. Historically, regulatory, security, and privacy concerns have caused banks to operate under greater scrutiny than other types of organizations. And because they are transaction-oriented as well as paper-intensive, retail banks have been early adopters of technology to automate their business processes.

In recent years, the challenges of sluggish growth and new sources of competition have spurred banks to develop new strategies for attracting and retaining customers. This strategic shift included a move beyond differentiation based on products and services alone to differentiation on the basis of customer insights and customer service. One result of this shift was multiple new channels and customer interaction points, including online and mobile banking. These required a redesign of processes and workflows—for both core banking and customer interactions—that leverages advanced technologies as well as information strategies to make information more freely available to customer-facing employees.

This focus on new strategies was especially pronounced in developed markets before the recent economic crisis. Although competitive pressures have weakened somewhat during the recession and many retail banks are still focused more on survival than on growth, the challenges remain. These concerns will no doubt return to the top of banks’ agendas as the sector stabilizes and as economies pick up. Retail banks’ information strategies should reflect this new environment. Survey results suggest, though, that the sector may not be fully prepared for the challenge.

Cross-sector perspective

Managing information effectively: a cross-industry perspective
Information, an essential asset for organizations, is always difficult to manage effectively—and it is even more so in periods of economic turmoil and transition, when complexity increases and the stakes are higher. For the past decade or more, organizations have been striving to build more open and collaborative relationships with their customers, partners, suppliers, and other stakeholders. When the recession took hold, many such initiatives took a backseat as cost-cutting became first priority.

Now, with the effects of the recession waning, many organizations in developed markets are moving from a focus on costs towards new growth strategies, while some firms in emerging markets are experiencing rapid expansion at home and abroad. Companies in heavily regulated industries such as financial services and healthcare are adapting to constantly changing regulations that affect how their businesses operate. In contrast, the public sector is still feeling the impact of the recession, with governments facing shrunken receipts and greater demands for social services. And nearly every organization, regardless of sector or geography, is adapting to new technologies—such as advanced collaboration tools, mobile communications, and social media—that are changing how people interact and how business is done.

Whether they are renewing growth plans or still dealing with the aftermath of the crisis, organizations can benefit from more efficient and secure use of information, which can help them identify and deal with both opportunities and risks. Our survey results show that executives in retail banking, healthcare, discrete manufacturing, and the public sector are addressing a host of challenges—from organizational to technological, and from regulatory to budgetary—as they assess the long-term impact of the recession on their markets and businesses. At the same time, they are striving to bridge an apparent gap between the goals of their information strategies and their ability to act on those goals. The survey also shows that while most decision-makers are uncertain about the effectiveness of their information strategies today, they expect to improve how they manage and secure information in the next three years.

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