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Mária Raffai dr.:
The Business Strategy towards the Global Information Society, The Results and Conclusions of a Survey in Hungary
Published in the Proceeding of the IFIP
WCC'98
World Computer Congress
By the end of the 20th Century the information has become more and more the main resource and motivating power of the society and the business life. In this situation the firms are not able to im-prove a dynamic development and to execute the continuous economic activity unless they take into consideration the national and the international business conditions and the trends of evolution. As in the last few years the society of the central and eastern European countries have changed to a new political form it would be particularly important for them to take part in the world-wide devel-opment of the new technology process. That means for businesses (small and medium-sized enter-prises) that they have to invest into the building information technology infrastructure in order to en-sure economic convergence between the eastern and western Europe. In this new situation the society and the business life needs experts with new knowledge: economists, engineers, specialists in computer science and information technologies who are prepared for the computer aided decision making, controlling and the effective communication and co-operative work through the computer network. In the year 1997 I performed a survey among the managers of 865 different kinds of enterprises in order to learn
1. The Challenge of the Information Society Nowadays there are two kinds of revolution in progress with very strong contact to each other. On one side there is the digital revolution with the always renewing technologies, and on the other side there is the process of the globalization concerning the production and market. This situation makes not only the information universal but the knowledge as well. The current, exponential growth of the information requirements, the information explosion, the growing importance of the up-to-date information, the globalization process of the knowledge results a never experimented development-spiral. A new social-economic structure is getting to be formed, and it is definitely different from all kinds of other earlier society systems. In this new era based on the results of the Information Technology (IT) and the Telecommunication (TC) we can see great changes: (1) the border between countries is disappearing, (2) the real-time communication becomes realty all over the world, (3) our conven-tions, habits and behaviour changes our life. We can be sure, that these attributes are going to be the strongest factor of the societies in the next century. In the Information Society the achievements of the IT and the telecommunication play a special and definite role. By the computer networks it is possible for more and more people (1) to get in contact with the other human being all over the world without any kind of time or geographic limitation and (2) to reach the necessary up-to-date information in advance for the business and the private life [11]. The information in this new type of society is a very important resource, strategic and competitive factor. It has a key-role in the business life, in the production and administration work, it is the key component of the scientific research. We can say that by its influence on the society and the economy the information is the engine of the economic growth [10]. The economy and the society is getting to be changed from the roots. The managing of the informa-tion system plays the most significant role not only in the procedures of planning, execution and realising the production or service procedures but it will be very useful also in our private life. We can arrange our tasks much more effective and on higher level. What are the benefits of this new type of society? Let's see them briefly:
The realisation of the information society is a great challenge for the governments, the business life and especially for the management, because they are in the key position in this evolution process and they are responsible for providing the circumstances and the conditions. They have to intervene in the development process by encouraging the competition in the market, and by stimulating the application of the new technologies. The efforts for a reorganised and reconstructed information infrastructure can result new workplaces, and so it can cause the prosperity of the societies and the humanity. Europe and of course our country, Hungary have also their own tasks [6], [7]:
2. The Information Resource as Strategic Factor For today the information has become the key factor in executing the tasks of the business life, such as making decisions, controlling and fulfilling the production procedures. Gathering, converting, storing, processing and taking care of the information systematically these are the competitive components which influence the business success. It is important though, that the information has to gain its importance similarly to the other production factors, and it needs to be the organic part of the economic activity. The information management systems have of course special characteristics, but they are functioning by the same rules as the other social-economic systems. Let us see some specialities:
The strategic management of the enterprises focuses to get competitive advantages. For the compute based decision making activity the managers use efficient methods, tools and technologies, by which they can provide an optimal process for the organisation. But for operating an effective information system and relevant information the leaders and especially the top management has to understand the importance of the value chain of their own business activity [8] with the components:
The information management gets a new meaning with altered characteristics, as follows 1. The concept of the distributed information The information distribution, the team consulting has great stimulating power: groups formed on the network with equal rights (1) discuss different kinds of problems, (2) send expert knowledge and solutions to each other and (3) the employees knowing the requirements of the product take more responsibility for the high quality. 2. Competitive advantages The competitive advantages derived from network services appear indirectly. In the competitive advantage model Porter emphasises the importance and the definite role of the top management (1) using the information for getting competitive advantages, (2) in decision-making connection with the IT development, (3) for modernising, installing and applying the information infrastruc-ture [9]. So we can definitely say, that the information science and technology has strategic importance, and by the end of the Century it becomes the main peremptory condition for the surviv-ing of the businesses. 3. Connections, cooperation From the leader's point of view the most effective resource is the possibility for their experts to get in contact with others (experts, business partners, potential customers and suppliers) all over the world. As we can see there are a lot of questions waiting for reply and to analyse them, for example: How does the digital revolution contribute to the planning and realisation of the management strategy? How does the globalisation of the society and economy influence the enterprises, their operation and effectivity? What do the managers think about their new tasks, the always renewing expectations? How do they react to the challenges? How do they see the strength, problems and threats at their business? What opinion do they have about their own competitive situation and the future of the venture? What are the most important tasks at the beginning of the new thousandth? Last year we made a survey among the top managers in Hungary in order to get the answer for these questions. 3. Information Management at the Enterprises in Hungary In the year 1997 we interviewed with the students of Széchenyi István College 856 leaders of differ-ent kind of enterprises in Hungary, so there are hundreds of talks with managers behind the result of the analysis and conclusions. First of all we had to choose the right groups which show the real Hungarian situation. To sign the enterprises we used the statistical empirical sampling method based on the data concerning to the Reports of Hungarian Central Statistical Office. With this selec-tion we could garantee, that our results show the Hungarian realty, and do not contain any distortion factor. During the interviews with the managers we could get a lot of very useful and important information about the ideas, goals, operation processes, activity of the firms as follows:
Connections, getting information, communication The Hungarian enterprises taken part in this survey are different in the number of employees (range from one to some thousand), in owner and in activity. Analysing the connection between the society formation and the direction of the personal contact we could see, that a great number of enterprises in Hungary have international partners. Analysing the results from another point of view we do not see significant difference between the domestic and foreign owned businesses by the way of communication, and the exchange of infor-mation. But we have to point to the relatively high ratio of the way of personal contact which is 33% at the domestic owned firms and 28% at the firms working in international contact. The tele-phone calls play a great role (46% and 41%) , and the employees usually write traditional, so called "snail mail" letters (14% and 21%). It is growing the use of faxes, but it is now on a quite low level yet (6% and 9%). It is regrettable, that the use of electronic mail is not yet wide spread, only the 1-2% of the enterprises communicate by this way. As a comparison the geographically isolated partners in the American type of economic cultures the services of the computer networks are the most important tools in communicating between the part-ners appearing on the market. These enterprises are connected with each other not only by EDI systems, but most of them are linked to the Internet network, and they use their services, as E-Mail, real time communication, Web advertising and other on-line possibilities and transactions, as the tele-working, tele-teaching, tele-scoping and civil administration. Financial transactions The situation is similar to those in analysing the communication tools, the interviewed managers informed us about the use of traditional remittance ways. The main problem is not always the lack of intention but the lack of the up to date and secure infrastructure and the high investment costs. But if we compare our situation to the services of the well developed west American banks our position is not too bad. By a survey on the west coast in the USA in the Year 1997 hardly more than 50% of the banks offer electronic on line services, where 59% of the clients use these possibilities for getting information, and only 27% of them (27% of 50%!) make the on line remittance. In the year 1991 the GIRO Co. developed in Hungary a network linked the Hungarian banks to each other in order to make the possibility for the clearing account. But the client expect a much higher level to arrange their private and business financial cases, as it is available by the up to date technological possibilities (ATM, POS, home banking, client terminals). Let us examine the today's situation in Hungary! There is only 3% of the firms who use the on line bank services, but 87% of the managers expressed their intention to use the network bank possibilities in the near future. By the survey the 52% of the enterprises pay mainly by cash, 45% make their remittance on the traditional way. These ratios do not show significant differences even we examine the businesses in different classification for example in groups by the sale value in million of Ft. Improvement of IT, connections to the computer networks The main focus of the management decision making strategy is to ensure the expected measure of efficiency. But in the most cases it is not so easy to define this degree, because the effective-ness of the investment into new technologies can not be proved directly. The activity of different business systems is very complex, and the reorganisation of management hierarchy and the use of modern IT are only two of those components. We could see significant differences in the degree of the risk taken: 26% of the interviewed persons declared, that it is not worth to pay any money for IT development. In this group there are 92% ratio of those, who have not any IT responsible organisation beyond the enterprise, and where the decision preparing work (computing and analysing) is made by the managers themselves. But I find positive that only 12% think that the IT investments will not be recovered and 42,5% are convinced that the investment into the IT is the main success factor. We are not yet a fully networked country as we can see from the results of the survey. The 84% did not join to any computer networks, mostly because they think that the recovering of the investment and the running costs are much higher than the efficiency received from the applications, but there were only 8% who does not know anything about the computer network possibilities. The Figure 6. shows the distribution ratios of the used Internet services. Computing based decision preparing process In order to establish the management decisions the 80% of the leaders apply the methods of statistic, operation research and economic analysis consciously. 17% of them try to find the optimal solution of different problems by the operation research methodology, 34% work with economic analysis, and 32% think, that the controlling methods are important tools for planning, control-ling the procedures, co-ordinating the work and managing successfully. It is good to see, that 17% of the enterprises use simulation methods for reducing the unexpected conclusions of the business risk. The managers recognise the benefits of this possibility by which they can simulate with computers the real processes, make prognosis and they can see the ex-pectable conclusions without any risk and any unnecessary losses. The results of the survey show that more and more manager recognise, that the business processes have to fit flexible to the continuously changing circumstances and environment, that the problems has to be solved on a creative and innovative way in order to reach the strategic goals. 4. Conclusion, Future Trends As we can see from the analysis, the society and the economy have been changing from the roots, and the high quality of the work, the use of the innovative possibilities, the application of the new technologies, the comparison analysis between the plans and the performance have become the basic condition of survive. The enterprises applying the up-to-date methods, tools and technologies, the services of the computer networks undergo a serious change as well, the traditional organisation hierarchy has to take a flexible form, in which the team-work, the close co-operation and the real time connection between the business partners all over the world and the divided decision making activity get the main importance. This common work provides international presence even for the small enterprises and the real time communication and data exchange between the fairest points of the world. The businesses aiming at realisation of long term strategic goals can satisfy the competitive conditions only if they fight against the technological challenges and connect themselves with the application of the high-tech products to the progressively developing international social-economic circulation.
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