Companies have been pursuing four strategies to deal with information overload. No one strategy is a silver bullet, but a combination of the four strategies is perhaps what is needed.
The first strategy is to try to build more sophisticated information systems which can filter, automate, and simplify the data that is being delivered. As a result not as much raw data needs to be handled by humans, so many transactions can be executed by rule-based systems, by robots – automated routines of various types.
The second strategy is to distribute the information more broadly throughout the organization. This brings more human brains to bear, instead of funneling all of the decisions to the top of the organization where the bottleneck gets narrower and narrower. Instead companies are pushing out decision-making into the field. So the sales representatives are allowed to make on-the-spot decisions to help their customers, giving them more decision-making authority – some people use the word ‘empowerment’. They are also shifting decision-making authority down on to the factory floor, allowing workers to make on-the-spot decisions about quality, personnel management, and process control. These techniques also reduce the overload or the bottleneck at the top of the organization.
Computers make human information processing more valuable
The third strategy is to try to increase the capacity of the individuals who are working on things. One of the ways to do that is to hire more skilled people initially and to invest more time in finding the best people and the people who are a good for specific jobs. Furthermore once these individuals are hired, companies tend to invest more in education and training, building the human capital, giving employees confidence, and ensuring they are successful once they are given that information and authority.
Finally, the fourth technique is to focus on the types of tasks that employees are responsible for in their organization, and in effect to ignore a lot of the information that is irrelevant to corporate goals. As information overload becomes worse and worse it becomes essential not only to know which information to pay attention to, but equally important which information to ignore. It is interesting that the successful firms often have aggressive programs to narrow down their strategic focus, to prune away the product lines that are less essential or less important than they used to be, and actively to maintain a corporate culture that is focused and coordinated on a few key goals, a few key product lines, and a few key paths, rather than trying to pay attention to everything simultaneously.
These four methods are becoming more and more important as data becomes ever cheaper. The cheaper information becomes, the scarcer human information processing becomes, and the more important it is to have techniques that use human information processing efficiently. Computers are not substitutes for people’s skills, they are complementary, and they make human information processing more valuable, rather than less valuable.
Simultaneously centralize and decentralize information
The successful firms simultaneously centralize and decentralize information. That seems like a contradiction. But there are certain types of information which have become more centralized. Those are the types of data that are easy to aggregate, like financial information, anything numerical or easily measured and anything that is machine processable. In this case it is easy to apply a decision-making rule and write a software routine to handle it. Those kinds of decisions are increasingly stored as central databases and aggregated.
At the same time, other kinds of information and data tend to get pushed out in a decentralized way. Decision-making is decentralized especially for some of the softer kinds of information. This includes, for example, information about human relationships and the way that sales people interact with their customers. Or it could be on-the-spot information about the specifics of what is happening on the factory floor, which may be very idiosyncratic, very particular to a certain situation and not based on data that can be aggregated easily.
Bringing the focus back to the human information processing aspect
This goes hand in hand with the empowerment and the pushing out of decision-making to individuals with on-the-spot information. A service oriented architecture often combines the best of both of these characteristics, allowing the centralization of data that may be useful across the whole enterprise but providing access to that data by people all over the organization, and ensuring the shifting of the decision rights to local decision-makers, as far as possible.
Here is a technical architecture reason for the shifting of centralization and decentralization which has to do with economies of scale and the efficiencies of centralizing versus the lower cost of communicating which allow you to decentralize. People may tend to focus on the technical reasons. But it is important to bring the focus back to the human information processing aspect as well, the idea of decentralizing decision-making in order to make more efficient use of the human information processing capacity, not just the computer information processing capacity. The central aim is to free up hands for more human and intelligent work.