The Importance of Information Management for Companies

Information management is a broad and comprehensive process consisting of information creation, presentation and realization. Meanwhile, intellectual capital refers to intangible assets such as information, skills, brands and patents that distinguish a business from its competitors. These assets originate from the process of information management and increase companies’ valuable information resources.

Today, a company’s success is determined by how and to what extent it uses the information at its disposal. Therefore, companies that have strong intellectual capital and develop the right information management strategies will thrive and gain a competitive edge.

In this article, we will focus on the importance of information assets, i.e. intellectual capital, for companies, and the necessary steps for the appropriate management of information.

STRATEGIC IMPORTANCE OF INFORMATION MANAGEMENT

Information management aims to leverage intellectual capital, encourage information transfer and ensure information exchange. Indeed, resources defined as intellectual capital have turned into a key competitive advantage and value driver for companies lately.

Some companies in the market boast a greater market value than their tangible assets because they have succeeded and gained competitive advantage by exchanging and taking advantage of their information capacity. As a result, businesses have started to prioritize information management, whose importance becomes more evident each day, in an effort to distinguish themselves in the market.

While addressing information management strategically, the three basic categories of intellectual capital create a value chain and contribute to the information management process. These categories are human capital, structural capital, and customer capital.

Human Capital refers to the total knowledge, skills and attitudes possessed by employees.

Structural Capital is the outcome of employees’ intellectual efforts, including the structures, procedures, information systems, patents, concepts, models, etc. at the company.

Customer Capital denotes invisible assets measured in terms of customer satisfaction, loyalty, company name, brand value, etc. to determine a company’s market value.

People constitute the essence of information management since they develop, process and use new ideas and products. As such, the available human capital is critical in turning information into intellectual capital. However, a company’s real achievement is to transform human capital into structural capital. Businesses use information via information transfer and try to improve, control, apply, increase and sell information as part of their information management efforts. Information management ensures customer satisfaction and loyalty while increasing a company’s potential of value creation.

Therefore, intellectual capital management is a comprehensive and crucial activity that provides maximum advantage to a company through constant application of information in its business as usual.

INFORMATION MANAGEMENT PROCESS AND PRACTICE

Information management should be addressed from administrative and technical aspects by people with different skills to understand the relevant practices better and improve their effectiveness. If a company creates a personal and organizational learning and development environment, it will promote the effectiveness of information management and, thus, increase its intellectual capital values.

As part of information management, employees will initially obtain new information through practical learning and experience. They will enhance this information from personal and organizational aspects and keep it inside the company as much as possible for the company’s prosperity. Information storage will ensure its safety and accessibility.  Finally, information will be transferred internally or shared with customers to complete the process in an effort to profit from it.

This process aims to increase profits from information creation and capitalize on the capabilities and advantages of such information. Companies prefer different methods to benefit from these advantages. For instance, they often use centers of excellence, knowledge centers and competence centers within the framework of information management. While a lot of companies consider this whole process as additional costs, lack of intellectual capital will result in greater profit loss in the long term.

For effective information management, companies need to pay attention to the following:

• Information management strategies should be associated based on the purposes of the business.
• An information management team should be formed, and a suitable environment should be created for effective information exchange.
• The shared values, vision and goals of information management should be identified.
• A new information management structure should be established in respect of the relevant processes, the roles of technology, and the pertinent rewards.
• The necessary organizational culture should be practiced for information management, and the relevant strategies should be developed for its sustainability.

OPINION

Our current age necessitates accessing information, sustaining information internally and establishing organizational structures that will facilitate obtaining new information from available information. As a result, information is today’s most crucial driver of competition.

Although intellectual capital assets are not included in companies’ financial statements, they directly influence their performance and help them gain sustainable competitive advantage by providing them added value. Hence, companies need to use human capital effectively to survive in a competitive business landscape and surpass their competitors. In fact, businesses should include each employee in this process, regardless of their position, and make the best use of their employees’ knowledge, experience and skills. They should adapt their data to their organization and culture while protecting and storing information based on their business purposes.

Moreover, companies should closely follow the laws, regulations, and the Court of Appeal decisions concerning information management and the protection of intellectual assets. Therefore, they are recommended to get legal advice and representation from experienced attorneys.