The Importance of Information Flow for Business Development

The flow of information helps entities integrate operations and services that lead to a more efficient system. It doesn’t matter if we are discussing a single company, a group of companies, or an entire hub of economic activity. The process of encouraging proper information transfer and collaborative problem solving is important for moving an organism to its highest state of existence. 

Imagine for a moment how well your body works if your feet didn’t communicate with your brain and your brain had no way of talking to the hands. You would have a difficult time walking, grabbing items, and otherwise functioning. You would eventually starve and pass away. The same occurs in companies and economic hubs when elements can’t communicate together. 

Glazer in his book Smart vs. Dumb Service Strategies: A Framework for Ebusiness Intensity discusses the importance of information flow in developing an entity for higher levels of performance (2001). He makes three distinctions where information integration can be beneficial: 

Downward flow: The flow of information between companies and customers (i.e. the in and outflow of information). 

Upward Flow: The flow of information between suppliers and the company (i.e. efficient operations by integration of networked operations). 

Internal Flow: The flow of information held internally by a company (i.e. collaboration of internal elements). 

Within any entity there is a need to ensure information to and from stakeholders is being used to improve the overall system.  That information needs to flow includes customer to company, company to supplier, and department to department.  Without that ability the system becomes dysfunctional and non-competitive. Improving the flow of information can make a difference in an organism’s ability to effectively adjust to its environment and succeed. 

How that improvement in information flow occurs depends on the type of organism but generally relates to meetings, positive relationships, egalitarian structure, information postings, open cultures, surveys, collaboration, and promotion. The organization must fully and functionally accept the inherent nature that new information should be encouraged, accepted, and capitalized on. 

Glazer, R. (2001). Smart vs. Dumb Service Strategies: A framework for EBusiness Intensity. New York, Armonk E-Service.

Improving Customer Care Quality Through Efficiency

Service efficiency and service quality have often been considered two different dimensions that don’t work well together. As service quality improves the efficiency of service moves downward. Likewise, as service quality moves down efficiency can move upwards. Conventional wisdom may not be accurate. A study by Talluri, Kim and Schoeherr (2013) used both transactional and survey data to show how service quality and efficiency can work together.

What they did find was that service efficiency should be improved through the development of higher levels of technology before moving into service demand quality. Without efficiency in place quality becomes more expensive. Focusing on efficiency and then on quality appears to push growth higher.  

Efficiency allows for the use of less resources to service customer’s needs. As core service functions are defined the processes and procedures streamline to cut out any waste. There may not be a lot of options in the types of services offered to customers but there is also less waste in the overall process.

Customers like a level of customization when handling and solving their problems. If they have an issue then general flexibility in dealing with that issue is beneficial. However, this customization reduces the overall efficiency of the organization. Customers may be happy but they are soaking too many resources to maintain profitability.

Developing customer service should be streamlined to meet certain organizational objectives. Once the efficient aspect of customer service has been covered it is possible to expand the range of service to raise overall satisfaction. Like a cycle the process of streamlining and then offering enough flexibility to meet customer needs is important.

The report helps administrators put in perspective the tradeoffs of efficiency and quality. It also helps them understand that these concepts are not necessarily mutually exclusive. It is possible to improve on efficiency and then work on offering enough flexibility within defined limits to serve customers adequately. When done together it can save the company money and improve upon customer satisfaction.

Talluri, S., Myung, K. & Schoenherr, T. (2013). The relationship between operating efficiency and service quality: are they compatible? International Journal of Production Research, 51 (8).