By Ignatius Gombera
IN many developing countries, small and medium enterprises (SMEs) account for a significant share of production and employment creation.
They are, therefore directly connected to poverty alleviation.
However, the issue of Islands of Information has become a major challenge for entrepreneurs, business people and managers in general.
Most organisations use specialised information technology systems called applications to run their operations.
Each application may support a particular aspect of the business (department, operation, strategic business unit or division) of the organisation. diverse applications (including manual or tradition file systems) for order taking, for billing, for distribution of goods, for management of employee data, warehousing.
The application will store the information it is processing in a persistent data repository in its private format for later reference.
Over time, this information system contains important details about the business: The organisation’s interactions, resources, customers, creditors, banks, inventories and its assets.
Even when all applications support unique functions, there is still an overlap in the data that they hold.
Over time, failure of the organisation to integrate the applications into one platform leads to the phenomenon of islands of information, which is very dangerous for the growth of the SME.
The private information stores of an organisation’s applications become islands of duplicated and inconsistent information which will result in poor decision making.
One of the major effects of islands of information is that applications only store information that is relevant to their operation — so it is hard to see the complete picture when the details are spread across a number of applications.
The different information systems may keep historical data, but not in the form that is conducive for analysis of trends and anomalies and obviously integrating the data is a nightmare.
Failure to synchronise or integrate this information effectively leads to inflexibility and inefficiencies in the organisation which, in turn, has an impact on both internally and externally processes.
Islands of information cause hassles between departments and can be a source of poor service delivery and bottle necks.
It is impossible for a manager to get visibility or deep insight across different aspects of business from fragmented data on how well the organisation is performing and how costs are spread to departments or resources.
As a result, the organisation cannot act in a coordinated manner and it is hard to get an overall picture of how well or bad the organisation is performing.
This requires a consolidated view of the operations of the business activities, showing the current position, along with a historical perspective for comparison.
This means different parts of the organisation will be operating on different facts that could lead to different decisions being made for the same situation.
This internal fragmentation is often channeled to the organisation’s stakeholders in the form of poor customer service or missed opportunities and exposes the firm to competitors, who can take advantage of the situation.
Failures in the mechanisms that move information around can corrupt the integrity of the organisation’s information.
These failures may be errors in the information itself, which means it cannot be transferred, or errors in the implementation of the mechanism, or a failure to initiate some processing in time, resulting in missing information.
These failures may not be detected for some time and can be extremely difficult to resolve.
In a nutshell, islands of information that might be present in SMEs today could be stopping SMEs from achieving the desired growth that they are capable of.
Uniting systems and employees will reap benefits for everyone. Could modern enterprise resource planning solutions be the answer for best results?
Ignatius Gombera is a consultant with Gutridge Business Solutions and is contactable on telephone +263-4-741344; cell & WhatsApp: +263-773 277 897; or Skype ID. Itamanikwa