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Useful Information Equals Profits

This is the second article in our new series of reports on Information Technology and its relevance to trucking. In the first article (see FleetWatch June 2000) we discussed automation which we described as the foundation or heart of any IT system. This month Tony Davis, our IT columnist, takes a look at information.

When it comes to computers, the adage 'garbage in garbage out' remains true to this day. Unless raw data is correctly entered into the system the information generated will be incorrect and insufficient. In this respect, it is important the data capturing (automation) system is capable and appropriate from the beginning.

Generating reports is the most basic and easiest function of a software package. However, properly written reports are critical to the health of your business. A properly structured information system enables you effectively manage your business. It should address the information requirements of all staff levels, from senior management, through middle management to supervisor level. Each needs different types of information.

Because you are making decisions on the information in your hands, badly structured information can be worse than having no information at all. For example, you could be led to believe you are making a profit in a particular area of your business when in fact it is costing you money.

Typical items you should be able to reel off at the drop of a hat, (or rather the press of a button) include information on profitability, productivity, utilisation and track and trace (if pertinent to your business), with the ability to drill up and down through this information as well as horizontally over time periods.

Thus, you should be able to compare the different structures within your organisation, i.e. the company/group as a whole, through branch level, right down to individual employee, vehicle and even transaction level. This should be available on a daily, weekly, monthly and annual basis.

A good information system will enable you to manage the business and make the right decisions. It must assist in reducing costs and increasing profits while at the same time indicate where you can generate more revenue.

Intelligence tools

The software system in itself should have all the reports and enquiries the customer requires. By using business intelligence tools, the manager should be able to 'slice and dice' this information and through the creation of charts and graphics produce 'what if' scenarios easily and simply. This is the real power of computerisation.

These tools are extremely powerful and should be looked at as the second tier of information. They show exactly what must be done to maximise profits. Those organisations that are using them properly are doing well and can claim to have a definitive competitive edge.

Information overload

A word of caution is appropriate here. We live in the so called 'information age' and it is easy to suffer from 'information overload.' The Internet has exploded the amount of available information and computer systems, rather than create a 'paperless' society, have given us more paper than ever before. Sifting through this information to find relevance is a 'time thief' that clutters our minds and retards decision making.

A good information system can provide management with accurate and succinct information on critical performance indicators. The manager should have at his disposal a 'dashboard' of information that instantly reveals where the business is standing and where it is going.

A fully-blown IT system is employed to provide profound and accurate information upon which important decisions are made. This information should be able to be customised and formatted to operate in line with your organisation's and your customer's needs and requirements. If it cannot do this correctly, you are going to lose a valuable and important competitive edge. Ultimately your business may simply be sidelined.