How does knowledge-based management enhance the decision-making process?
The purpose of knowledge-based management is to support the company’s development so that business management is not based on assumptions, luck, opinions or guesses, but on the data in use. The data used by the company does not in itself provide much added value to the management, but the value is brought by the analyzes based on the data, which support the decision-making ability of the management.
In this post, we explain what knowledge-based management is and how it can be utilized in business management.
Data creates competitive advantage to companies
In today’s global economy, the competitiveness of companies is constantly measured in emerging markets. Companies operating in Finland do not only compete against other companies operating in Finland, but the competition is global, i.e., it extends beyond national borders. Companies need up-to-date information for their management and its utilization to succeed. The information obtained from the company’s business is intended to deepen the understanding of changes in the company’s business and to gain support for management’s decision-making processes.
What is knowledge-based management?
In its simplicity, knowledge-based management is a practice in which the decisions made by management are based on the analysis of the right information. The company must therefore first identify the information that is relevant to its business. Decisions made based on relevant information support the development of operations.
Knowledge-based management is often thought of as looking at different reports, in which case the gaze may often turn back, to historical data. Historical data gives management information about how something happened and what factors contributed to it. As management looks to the future, knowledge-based management takes on a completely different perspective. Then, from the data available about the company and the business environment, analyzes are made of a possible future direction. The future is completely unpredictable, as the corona pandemic that began in the spring showed, but it is good for the company to consider certain cause-and-effect scenarios in advance.
However, knowledge-based management is not just about producing and analyzing information. It more broadly encompasses the management of all business business intelligence, which also includes the storage, modification and utilization of information. Business knowledge-based management can be said to include both strategic and operational functions. In each company, important business information is stored, for example, in the form of accounting. Accounting should not be drawn up solely for the purpose of the statutory taxpayer, as they can be used to recover valuable data about the company, which can be analyzed to develop the company’s business.
Combining data makes data analysis easier
Companies may have access to several different systems or services in which information is stored. If data can be found from several different data sources in different formats, it is challenging to combine the data. However, it is a prerequisite for building the reports to be analyzed.
Combining data from different information systems with the form to be analyzed is one of the cornerstones of data management. Integrating data into a format that can be processed under a single platform is now very simple, as often the company’s internal and external data are in their own cloud service and the integration takes place within the network. Once the data is integrated, the user has numerous different opportunities to create reports and analyzes that are relevant to their own business.
Knowledge-based management as a business aid
What is essential in knowledge management is that the information is relevant and available at the right time for the right purpose. Well-planned and implemented business management can affect how well information management can be utilized. The accuracy of the information produces better decisions in business development.
As the company seeks business growth, it is essential to be aware of the factors that affect growth. Regarding knowledge-based management, growth is affected by available data, which can be both internal and external. The available data is integrated into a data warehouse, where it is transformed into a format that can be analyzed and used. The data is used to generate management reports, which can be analyzed to support management’s decision-making ability. The goal is that by developing management reporting, it will benefit both the company and their customers.
Effective knowledge-based management makes running a business easier
We offer companies the opportunity for increasingly sophisticated knowledge-based management. Gallant’s product family of CFO services has grown with the BI reporting tool. This service enables our customers to view company financial data in real time as graphs, charts and tables. The service aims to develop the company’s management reporting and planning and to support the management’s decision-making ability.
The reporting tool provides several benefits, such as:
Focus on business
The reporting tool enhances the preparation of calculations and analyzes performed in the company, which means that the management has more time to develop the business based on the calculations and analyzes prepared. We also want to support the customer in utilizing these analyzes and reports.
The data monitored from the reporting system and the analyzes prepared from it are based on high-quality information, which the company can use to anticipate, among other things, the development of cash flows.
The analyzes and reports prepared can be used to identify the company’s profitable and unprofitable businesses, which contributes to the development of the business in a profitable direction.
Decision making capacity
We want to enable our customers to make faster and more accurate business decisions based on available data and analysis.
Development of operations
Overall, good and comprehensive reporting can support knowledge management, which allows for the development of a number of different functions.
We can help you with knowledge-based management
We at Gallant have experience in financial data and developing management reporting. If you are interested and would like to hear more, please leave a contact request. We will be happy to help!