In 2003 the market research company IDC found that the volume of information available globally had increased to five exabytes. To clarify: an exabyte is around 10<sup>18</sup> bytes, that is, over a sextillion (10<sup>21</sup>) characters, an almost unimaginable magnitude. The main contributors to this information explosion are new technologies and new forms of communication (via e-mail) and data exchange (e-business). This also means that even smaller companies have to handle an extremely high volume of electronic information from a wide range of sources, such as accounts, sales and marketing, production, and product development. Academic literature variously classifies this exponential growth of information as “information flood”, “information explosion”, or “information avalanche”.
Channeling the information flood
An example: the Steinbeis-Transferzentrum Wissensmanagement & Kommunikation (Steinbeis Transfer Center for Knowledge Management and Communication) reports that each employee in German companies receives 177 messages daily. 61 percent of employees have their work interrupted every ten minutes by incoming messages. “Such statistics can be extrapolated ad infinitum,” says Dr. Wolfgang Deiters, head of the Dortmund site of the Fraunhofer Institut für Software- und Systemtechnik (Institute for Software and Systems Engineering, ISST). “The large amount of external information arriving for instance as e-mails, as well as the numerous internal sources, such as memos, makes it difficult for employees to retain an overview and to identify and filter out the information they need,” Deiters continues. All companies today face the challenge of processing, filtering, and distributing information in a targeted manner.
Several years ago, Gartner Group analysts were already forecasting that in future 75 percent of productivity increases in companies would be based on handling information and the knowledge derived from it more efficiently. “After companies have gathered and collated knowledge in various ways, they then need to ensure that this knowledge gets to where it needs to be,” was also the conclusion of KPMG partners Jon Abele and Manfred Pfaff in a 2001 study on knowledge management in SMBs.
“Efficient handling of the commodity of information thus becomes a central factor in a company’s competitiveness,” explains Marc Tenbieg, analyst and managing partner at BRAICONN Deutschland business consultants. “The available information must be of a high quality and consistently accessible in order to ensure successful business process management and data exchange,” he continues. “The core task of information logistics is to ensure that the right information reaches the right employee at the right time. It thus entails integrated planning, control, coordination, allocation, and monitoring of all a company’s internal and external information flows.”
Creating a seamless information flow
The main point is to guarantee a seamless information flow with suppliers and clients and to ensure information is distributed effectively within the company. While this sounds straightforward, it is in fact a complex process. Even simple customer inquiries, such as when a product will be delivered, can place considerable demands on companies in terms of information logistics. When such a piece of information arrives in a company, the system needs to evaluate it, filter it, and distribute it to the correct location (service or complaints department), and it should then be processed or answered quickly. However, this is not the end of the information logistics process, since this information needs to be stored systematically (for instance as a customer contact history in a CRM system) and coordinated with existing sources of information on the customer or the customer relationship. This may consist of master data from an ERP system and transaction data, such as orders, invoices, payment transactions, and purchasing frequency, from a CRM system.
Similar information distribution processes exist in product planning and development or in production planning. For instance, even smaller SMB suppliers in the automotive industry are becoming ever more integrated into the manufacturers’ development processes. The individual project staff in this sort of virtual development team need to be continuously updated about the current status of the project. This requires consistent information flows to distribute reports or memos to the correct (project) staff in a timely fashion, which can be done via a powerful project management software solution, such as SAP cProject Suite based on mySAP PLM.
Defining and integrating business processes
Integrated systems, such as ERP, CRM, and PLM systems, that homogenize and improve the exchange of data and information both within a company and also with customers and suppliers are crucial for efficient information logistics in companies. Companies that already have an integrated system landscape, possibly based on the SAP NetWeaver open technology and integration platform, have clear advantages in this context. Further, SMBs are also increasingly using integration technologies to integrate important business partners more effectively, process information more quickly, and reduce operating costs. Additionally, SAP NetWeaver provides SMBs who use mySAP All-in-One solutions with interesting ways of setting up comprehensive processes and flexible information value-added chains at an affordable price.
However, Marc Tenbieg identifies clear room for improvement, particularly in classical SMBs, “because information sources there generally exist as stand-alone solutions. These isolated solutions are decoupled from the business processes, meaning that consistent information networks are often pie in the sky.” This is a further reason why Tenbieg maintains that there is a gulf between the widespread increase in interest in the topic and the projects that have actually been implemented. The BRAICONN analyst particularly bemoans lacking or badly defined processes in many SMBs. Without these, Tenbieg, holds, it is not possible to define which information is relevant to a business process or to develop and implement concepts and ultimately make them available to the “right” employee as effectively as possible.
Integrating information, improving processes
Well maintained, up-to-date master and transaction data and the resulting quality of data this ensures are further important prerequisite for effective information logistics. This pays particular dividends in customer loyalty management, as campaigns or mailings are only as good as the data they are based on. “Tight integration of customer-relevant information plays an important part in customer management,” Tenbieg explains. The economic benefits are self-evident. In critical situations within such a business process, where complaints or queries arise for example, the requisite information is readily available thanks to optimized data logistics, and enables customer-focused and effective action to the ultimate benefit of the customer.
However, Tenbieg warns against equating information logistics with a software solution that simply needs to be installed to transfer information from A to B. Instead, information logistics requires process-oriented knowledge, thinking, and action. “In this context, SMBs in particular need to take charge of their decision-critical information and its concrete use in business processes,” Tenbieg concludes. “This provides the necessary transparency and ultimately gives them a competitive edge.”