What Is Information Management? Definition and Benefits
Updated March 10, 2023
Information management is a vital aspect of data-driven businesses that allows them to make better decisions and achieve goals. Understanding the purpose of information management can help your business enhance the use, protection and storage of information to operate more effectively.
In this article, we explain what information management is, how it differs from data management, its importance in the workplace and how you can create an information management system for your company.
What is information management?
Information management is the collection, storage, management and maintenance of data and other types of information. It involves the gathering, dissemination, archiving and destruction of information in all its forms. Information management covers the procedures and guidelines organizations adopt to manage and communicate information among different individuals, departments and stakeholders.
Information management focuses on the level of control an organization has over the information it produces. It requires building dedicated information management systems designed to help the company use its resources to support business processes.
Information management also deals with how the organization shares and delivers information to diverse recipients. This includes the format, such as digital and physical information, and the medium, including computers, servers, websites, social media, mobile devices and applications.
Information management versus data management
Information management begins with the creation and collection of data that is processed and analyzed into information. The next step is storage, sharing and archiving when more current data becomes available. This process ends with the destruction of information for different reasons, including security, confidentiality, cost and storage constraints.
Data management is a subset of information management and relates to the policies, plans and programs that protect and control data and information assets through their life cycles. Data management gives organizations control over their business data, which can minimize security breaches and other risks when done properly.
Related: What Is Data Management?
Information management and its role in the workplace
Information management allows an organization to achieve various goals. It improves compliance, reduces risk and controls access to vital business information. Here’s why information management is important in the workplace:
1. Controls creation of records
An effective information management system can help an organization control the creation and growth of records. Without a defined strategy for creating and recording information, the workplace can produce excessive paper and paperless records.
This can increase time for retrieving records and increase costs of managing information resources. To prevent this, information management protocols set limits to creating and destruction of information to improve productivity and efficiency.
2. Ensures regulatory compliance
Many organizations have to work within regulations regarding how they handle client and business data. An effective information management system provides guidelines that enforce compliance with laws and regulations, allowing the company to avoid legal and financial penalties that could result from accidental breaches.
3. Reduces operating costs
Workplaces need an efficient information management system to reduce the cost of record keeping. Data collection, analysis, information storage, sharing and destruction are capital-intensive activities, especially for large organizations. Information management prioritizes the most important records, reducing expenses throughout the information life cycle.
4. Adopts new technologies
Information management provides the capability to adopt newer and more efficient technologies for managing information. It can be automation, enterprise solutions, artificial intelligence or any technological product or service that will help the company derive more benefits from its information.
5. Improves productivity and efficiency
A great information management system can improve how employees store and retrieve information required during their daily activities. It can also make it easier to disseminate information to diverse recipients via multiple channels, allowing teams to collaborate and communicate easily across time zones and locations. An effective information management system can help the organization extract actionable insights from its records to guide decision-making.
6. Reduces risks
An important function of information management is to reduce the risk of legal and financial punishments against the organization. It achieves this with a well-defined protocol for recording, storing, disseminating and destroying data. This reduces the chance of breaches and improves compliance with regulations.
7. Protects proprietary information and preserves corporate memory
Organizations need a process to safeguard their vital information from competitors and unauthorized access. Information management provides a system for protecting proprietary information from intruders, system failures and natural disasters. It helps protect the confidentiality and integrity of vital information assets, allowing the owner to derive maximum benefits from their trade secrets.
Information management also helps an organization create a reliable institutional memory it can use for planning and making important strategic decisions.
How to create an information management system
Use these eight steps to create an information management system:
1. Identify information requirements
The first step when creating an information management system is to identify information requirements. This can be in the form of an internal study or company-wide survey to determine the scope of the system in relation to the business, its operations, stakeholders and regulatory requirements. A simple way to achieve this step is to ask employees and management the amount and type of information they need to perform their duties.
2. Outline objectives
For the system to be successful, the organization needs to define its objectives in the form of guidelines or protocols that will guide implementation. Consider the overall management principles that will serve as a user manual when the system becomes operational.
3. Determine information sources
Organizations can collect information from diverse sources, including employees, internal departments, competitor research, market intelligence and regulatory agencies. The objectives of the system often determine the sources of information.
Related: How To Conduct Competitor Research
4. Determine collection and classification methods
Once you have determined the sources of information, the next step is to identify methods of collecting and classifying the information. This involves outlining the amount of information collection and the frequency, location and time. For classification, determine which information is quantitative, qualitative, technical, demographic, financial, legal and other categories. This step also involves the storage of current information and archiving when it becomes obsolete.
5. Determine dissemination method
Next, you’ll identify the information recipients, the format and the channels of distribution. You’ll also decide when to provide data access and other control measures to prevent breaches.
6. Perform a cost-benefit analysis
The cost of an information management system will include expenses for setting up the infrastructure, training staff, daily operations and maintenance. An effective information management system will deliver benefits that outweigh the costs.
7. Implement and evaluate
If the cost-benefit analysis is positive, you’ll begin setting up the system and providing training and operational guidelines. You want employees who use the system to improve their productivity and efficiency at work.
You should assess the performance of the system after some months to determine how it’s met objectives, including ensuring that the benefits continue to outweigh costs. Shorter periods for recording and retrieving information and increased use of data for decision-making are also signs the system is working.
If there are lapses in the company's information management strategy, an evaluation can help identify ways to improve the system for more effectiveness.
8. Maintain and improve
An evaluation will show how to improve the system’s effectiveness and also provides an opportunity to upgrade infrastructure and retrain staff. Continuous improvements can contribute positively to the company's ability to achieve short- and long-term goals.
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