by Judy Khoo

Created on: October 26, 2008

The keyword to decision making is INFORMATION. Not just any information, but accurate and timely information. In certain cases, information that is even a day old is disastrous.

An example would be machine performance. While regular maintenance is always scheduled to prevent any breakdowns, there could be exceptions at times. A machine could be underperforming or mis-used at any time. If information is gathered at all times on the performance of the machine, a breakdown or even major disaster could be avoided by early maintenance.

In the last 20 years, as the business arena becomes tougher, management has turned to IT in the hope of it providing the accurate and timely information that is required for decision making. Almost all decisions from the simple task of hiring to budgetting and expansion is now based on data collected through different software solutions.

For example, an accounting package gives you instant profit and loss statements, past trends, projected future trends, cash flow requirements and many more. Before IT was widely used, management depended on accountants to write up the books as fast as they can. Most companies rely on having one profit and loss statement and balance sheet once a year as the chore of preparing for it is enormous. Even then, it is never available on the day the year ends or what is known as financial closing date. The information is normally a few weeks to a few months old. But today, with IT, management can request for a up-todate profit and loss statement or balance sheet at any point in time. The information may still be a few days or weeks behind (due to the slow data entry of information to the package) but at least it is still very current.

One of the most important information that is obtained is the inventory status. Many organizations lose a lot of money due to stocking of obsolete stocks, ordering wrong goods, missing stocks, not having the right stocks at the right time and many more. Most organizations depended heavily on their Warehouse Manager to give accurate information about the stock levels in the warehouse. However, with a manual system, the warehouse manager would only be gauging as to the level of stocks and performance of the goods. With an IT system, he now knows what goods are best sellers, down to colour and size if needed. He also knows where his stocks are and this prevents double or triple ordering.

This two examples above are just the cream of how IT can help management make sound decision. Knowing

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